# 75% of Americans near retirement have less than 30,000.00 saved.



## Daniel A. (Mar 20, 2011)

I don't think the numbers are any better in Canada. 


http://www.nytimes.com/2012/07/22/opinion/sunday/our-ridiculous-approach-to-retirement.html?_r=3


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## Square Root (Jan 30, 2010)

Sounds bad but always has been thus. CPP, OAS, GIS has essentially curred old age poverty in Canada so things have improved.


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## slacker (Mar 8, 2010)

Square Root said:


> Sounds bad but always has been thus. CPP, OAS, GIS has essentially curred old age poverty in Canada so things have improved.


At the expense of poor young people.


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## Nemo2 (Mar 1, 2012)

slacker said:


> At the expense of poor young people.


...who be living in caves and wouldn't have _anything_ if it wasn't for previous generations......

FIFY. :encouragement:


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## kcowan (Jul 1, 2010)

I remember getting our first dishwasher. We had been married for 5 years before we got it. And then it was because the house we bought had a space for one under the counter. The first icemaker was at the 14 year mark. Second TV in the house at 14 years. Home computer at 17 years. First cell phone at 21 years.

I have trouble feeling sorry for the poor kids today...


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## brad (May 22, 2009)

kcowan said:


> I remember getting our first dishwasher. We had been married for 5 years before we got it. And then it was because the house we bought had a space for one under the counter. The first icemaker was at the 14 year mark. Second TV in the house at 14 years. Home computer at 17 years. First cell phone at 21 years.


Did cell phones even exist when you got married? 

Kids today grow up in an environment where everyone around them has a computer, cellphone, and TV, so they are considered as essential as knives, forks, and dishes in the cupboard. They've never known life without them, so not having them isn't an option they'd easily consider. 

It's similar to cars: back in the 80s few cars had intermittent windshield wipers or cup holders. Today most of us would balk at buying a car that didn't have either of those features.


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## Four Pillars (Apr 5, 2009)

brad said:


> It's similar to cars: back in the 80s few cars had intermittent windshield wipers or cup holders. Today most of us would balk at buying a car that didn't have either of those features.


You can add air conditioning to that list. And probably dvd players as well. 

Remember when cars had no a/c and am radio?


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## Square Root (Jan 30, 2010)

slacker said:


> At the expense of poor young people.


Poor people don't pay much if any tax. CPP is paid by the employer/employee.


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## kcowan (Jul 1, 2010)

brad said:


> Did cell phones even exist when you got married?


Yes but they were a specilty item. 



> Kids today grow up in an environment where everyone around them has a computer, cellphone, and TV, so they are considered as essential as knives, forks, and dishes in the cupboard. They've never known life without them, so not having them isn't an option they'd easily consider.


But that is the point. The previous generation has raised the standard of living so much that kids take it all for granted. Back in the day, 5 TV channels was considered to be plenty. 


> It's similar to cars: back in the 80s few cars had intermittent windshield wipers or cup holders. Today most of us would balk at buying a car that didn't have either of those features.


Exactly!



Four Pillars said:


> You can add air conditioning to that list. And probably dvd players as well.
> 
> Remember when cars had no a/c and am radio?


Yes and how many kids today would consider a residence without AC of some type? What they expect is totally different. Even people in soup lines have cell phones!


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## brad (May 22, 2009)

But I think the point is that they've never known anything else, so they take these things for granted, just as we take things for granted (like central heating or even shoes on our feet) that generations in our not-so-distant past might have considered luxuries. As technology marches on and things evolve from luxuries to necessities, the cost of living goes up. You can look at it two ways: 1) kids today are spoiled because they take these things for granted; we know better because we didn't have it so easy, or 2) you can recognize that young people just starting out in their 20s might have a harder time making ends meet because they "have" to spend money on all these new necessities of life like cellphone contracts, internet subscriptions, etc.


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## Four Pillars (Apr 5, 2009)

kcowan said:


> Yes and how many kids today would consider a residence without AC of some type?


I was referring to cars. I don't know if it's possible to a buy a car without a/c anymore.


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## peterk (May 16, 2010)

Back to the original point... it is the old people near retirement (the ones growing up without cellphones and A/C), that have no money. So if they didn't have all these so-called luxuries of today, what the heck were they spending money on all those year?

My parents certainly fall into this category...56 & 60 and still have a mortgage. I think their net worth might be negative (not including pensions).

Scary stuff...


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## brad (May 22, 2009)

peterk said:


> Back to the original point... it is the old people near retirement (the ones growing up without cellphones and A/C), that have no money. So if they didn't have all these so-called luxuries of today, what the heck were they spending money on all those year?


Intermittent windshield wipers and cupholders. ;-)


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## Four Pillars (Apr 5, 2009)

peterk said:


> My parents certainly fall into this category...56 & 60 and still have a mortgage. I think their net worth might be negative (not including pensions).
> 
> Scary stuff...


Ignoring their pension is kind of like ignoring their house or other large assets. 

A good pension is worth a lot of cash.


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## kcowan (Jul 1, 2010)

> Statistics for Year 1910:
> (Abridged list)
> 
> The average life expectancy for men was 47 years.
> ...


Always good to look back in order to understand the present and future.

And we are talking about AC!


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## Daniel A. (Mar 20, 2011)

peterk said:


> Back to the original point... it is the old people near retirement (the ones growing up without cellphones and A/C), that have no money. So if they didn't have all these so-called luxuries of today, what the heck were they spending money on all those year?
> 
> My parents certainly fall into this category...56 & 60 and still have a mortgage. I think their net worth might be negative (not including pensions).
> 
> Scary stuff...


A few thoughts your parents are in the same age range as I am I've been retired for a couple of years now.
I'm not big on assets but do have good pension income. Most of our kids really don't know just how hard it is to provide for a family and look after future needs.
Most people live pay to pay and other than a house have little as long as they keep working things look great.
I made many decisions along the way that most people would not unless they were faced with the same choice and thought the same as me.

We are all unique and make choices about much in life, we can follow our own plan or live by someone else's .
I took many risks but the one that I wouldn't take was with my future pension.
Some change jobs and have breaks, most want to provide as much for their kids as possible thinking they can save later.
Most people don't even think about retirement needs till they are close to 50 which is much to late.
Some of us learn from others mistakes and plan accordingly.
Few kids really know what there parents financial situation is going into retirement say the ten year period before.
Most parents would not feel good letting their kids know and instead counsel them to make different decisions.


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## Plugging Along (Jan 3, 2011)

brad said:


> But I think the point is that they've never known anything else, so they take these things for granted, just as we take things for granted (like central heating or even shoes on our feet) that generations in our not-so-distant past might have considered luxuries. As technology marches on and things evolve from luxuries to necessities, the cost of living goes up. You can look at it two ways: 1) kids today are spoiled because they take these things for granted; we know better because we didn't have it so easy, or 2) you can recognize that young people just starting out in their 20s might have a harder time making ends meet because they "have" to spend money on all these new necessities of life like cellphone contracts, internet subscriptions, etc.


The question is who is teaching these kids their values. It is the parents. I've read some really interesting articles about the gen X & Millenials. I would have to say that alot of it comes down to parents always wanting their kids to have better, and because of that, they are sheltered frim so many things. 

My 6 years old asked me the other day if we were poor. Her reasoning was that out of her friends that she surveyed (all kids from well to do families in private school), she was the only one that had to help pay for her own things. Which she attributed to because I didn't have the money *lol*. I explained that it was I that gave her an allowance, so essentially it was my money originally. She then continued with questioning because she is one of the only kids that does have a gaming system (it's against my parenting beliefs), and I told her she could buy her own. I explained what we wanted her to learn about making choices on what she wanted to spend on. She told me that her friends didn't have to make choices or have consequences, they just whined and their parents would get them the items. 

So at this point, I cannot blame a child for whining, because it is effective for them, but rather the parent. These lesson continue until they are young adults, and then all of a sudden the parent wakes up and realizes the 'child' needs to learn because they cannot possible afford the same standard of living as they have been provided for. Who's fault is this?



peterk said:


> Back to the original point... it is the old people near retirement (the ones growing up without cellphones and A/C), that have no money. So if they didn't have all these so-called luxuries of today, what the heck were they spending money on all those year?
> 
> My parents certainly fall into this category...56 & 60 and still have a mortgage. I think their net worth might be negative (not including pensions).
> 
> Scary stuff...


I think they are spending on their kids.


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## sags (May 15, 2010)

I think sometimes we forget what we were doing when we 20 years old........


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## sags (May 15, 2010)

Harvard did a study of their top students and all of the kids attributed their academic acumen to parents who left them alone to discover the world..........make their own decisions......and suffer the consequences..........good or bad.

Hovering parents are known to be a burden to their kids.

Expectations do come from their experience, hence their upbringing. If we expect they will adopt our honesty, hard work ethic and other values.............how can we not also expect they want to adopt the other part of their experiences.........the toys and money?


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## sags (May 15, 2010)

Back on topic.........what ever happened to the Personal Pension plan scheme announced awhile ago?


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## MoneyGal (Apr 24, 2009)

The bill authorizing it just passed in the House of Commons: http://www.fin.gc.ca/n12/12-067-eng.asp


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## OhGreatGuru (May 24, 2009)

Regarding the original article posted, I don't disagree with her general theses that "This do-it-yourself pension system (IRA) has failed" and that people in general are not saving enough for retirement. The same can be said for RRSPs and the savings rate of Canadians.

But otherwise his detailed numbers are rather meaningless, particularly in a Canadian context. For example, it ignores what people may have in other Pension Plans; national differences in retirement income support; national differences in personal indebtedness; and whether or not you "need" the same income in retirement.

PS: Percentage of workers with DB pensions in the US is admittedly declining. _(eg. The percentage of households with members in DB plans dropped to 43% in 2010 from 48% in 2006. _http://www.pionline.com/article/201...r-older-americans-without-db-plans-nirs-finds)

But if you are in the lucky 43% you don't need the millions of dollars in personal savings that Professor Ghilarducci suggests. Makes her "75%" scare tactic look a little ridiculous


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## Cal (Jun 17, 2009)

The opposite of the IRA would be very socialist for the Americans. They are proud to embrace capitalism.

They just haven't realized that they have already enjoyed their retirement money, or they are finally and sadly realizing it now.

It is easier to have a great economy when everyone is spending all of their money.


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## Square Root (Jan 30, 2010)

Cal said:


> The opposite of the IRA would be very socialist for the Americans. They are proud to embrace capitalism.
> 
> They just haven't realized that they have already enjoyed their retirement money, or they are finally and sadly realizing it now.
> 
> It is easier to have a great economy when everyone is spending all of their money.


I get the point of your post, but you are painting with too wide a brush. Canadians are in just as much personal debt as Americans. There are many people in both Countries who are very well prepared for retirement.


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## marina628 (Dec 14, 2010)

I remember my brother in law buying his first cell phone , nobody else we knew had one and we all went to see his cell phone like it was a new car or something.I think it cost him $3000 to install in the car and at night part of it would be removed as it was considered so valuable back then lol
My poor student daughter moved out to her new apartment today ,She has brand new furniture that she saved and paid for.She made $17,000 last year from working plus got a $9300 student loan ,fico score 780 and $8100 in her bank account.This year she is not getting a student loan as we are paying 100% schooling expenses but she has to work to pay her rent.
I could easily pay her rent for her but we have taught her well to budget ,people here thought it was ridiculous that we gave her a $40 a week allowance when she had a job but that exercise taught her to save all her pay cheques and live off that $40 a week allowance.She still gets that $40 a week from us and she has been trying to stick to a $80 a week budget and succeeding since last summer when she moved out.I had to take her out to shop for clothes as her shoes and her pants were ragged lol.How many parents have to fight with their kids to buy TWO pairs of Jeans and convince them one pair is not enough. I spent $370 on her new clothes and shoes and she thanked me and said that will do her until next year now and I will have to drag her out again next year or she will wear them til they fall apart lol
Poor students living on OSAP ,working minimum wage jobs and renting a room are far better off than some of our parents were raising large families.And I can guarantee my parents when they were younger never thought for a second the elderly were a burden and stealing from their future.The younger generation are slowing developing a what can you do for me mentality and feel entitled to so much more than when 'we' 45+ were growing up.


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## Sherlock (Apr 18, 2010)

Here's an article that compares how the 45+ crowd had it back in their day compared to today's young adults:

http://www.theglobeandmail.com/glob...eally-do-have-it-harder-today/article4105604/


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## Eclectic12 (Oct 20, 2010)

brad said:


> ... Kids today grow up in an environment where everyone around them has a computer, cellphone, and TV, ... They've never known life without them, so not having them isn't an option they'd easily consider.
> 
> It's similar to cars: back in the 80s few cars had intermittent windshield wipers or cup holders. Today most of us would balk at buying a car that didn't have either of those features.


Which is why traveling around the world or learning about the world is so important. Otherwise it's easy to sweat the small stuff. 

I still shake my head at my classmate who thought his parents did not love him as they gave him the second best stereo for his birthday. Or the separatist who expressed his belief that Canada was not living up to it's potential by writing "Canada is a third world country". Contrast that with trying to live on less than $2 per day and scrounging for food in garbage heaps ....


As for the intermittent windshield wipers - I think your timing is a little off. I can remember them in the early 70's. Then too, this wiki link claims the big three automakers were installing them in 1969.
http://en.wikipedia.org/wiki/Robert_Kearns


Cheers


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## Cal (Jun 17, 2009)

Square Root - 'I get the point of your post, but you are painting with too wide a brush. Canadians are in just as much personal debt as Americans. There are many people in both Countries who are very well prepared for retirement.'


True, and True. Many have saved enough or retirement, if others, for whatever reason chose not to, I don't have alot of sympathy. Having said that, some b/c of illness, disability or whatever, someone cannot save adequately for their retirement, I do feel they should be helped in some way or form.


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## sags (May 15, 2010)

It is often quoted that the demise of DB pension plans transfers the burden for retirement income planning from companies to the employees. 

This may turn out not to be true.

The responsibility will actually transfer from companies to the government, with voting low income retirees demanding support from the government.

Governments are starting to realize the problems they are going to face in the future.

Finance Minister Flaherty's refusal to extend contribution timelnes is an example of government push back.


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## Daniel A. (Mar 20, 2011)

Government is working to side step the issue as most can see, making adjustments with the CPP would have been a sound way to address the issue.

Most people would say I don't have the extra % to contribute but would adjust without a choice being given.

Sympathy or not we still pay.


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## HaroldCrump (Jun 10, 2009)

There is no government - there are only tax payers.
As the Finance Minister said, the split of the contributions is a private matter between the company and the employees, and what they negotiate for themselves.
Keep the tax payers out of it.

The govt. may be appearing to push back, but it is not doing half enough to ensure a fair tax burden for current and future tax payers.


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## Daniel A. (Mar 20, 2011)

It's to late our social system is what dictates the future.


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## Rusty O'Toole (Feb 1, 2012)

I had a 1968 Austin A60 with intermittent windshield wipers. Also intermittent headlights, intermittent horn and intermittent ignition.

Maybe all the broke old people spent their money on their kids. If they had taken all the money they blew on everything from diapers to summer vacations, and invested it, they would have plenty of money to retire on.

I only point this out because of the number of posts I have seen lately by young people who want to set Granny adrift on an ice floe.


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## peterk (May 16, 2010)

Yeah...those devious 6month olds demanding the best huggies and 100 dollar outfits to look cute.... 5 year olds that would prefer hardwood and leather in the living room to impress their friends.... the 12 year old that just HAS to go out to fancy restaurants because of his fine palette, and thinks that expensive world travel will help him gain perspective on his geography essay.... and the 17 year old that just NEEDS a 25k new car to drive to school, and a new iPhone, or she'll "JUST DIE"

Yup. Damned kids and their stupid financial decisions. What were they thinking?

Now that you're old and broke though you say: "Listen, kids. I GAVE you all sorts of expensive stupid things that you didn't need when growing up, and now I'm broke. What I need now from you is 20k+ in medical expenses that will hardly improve my life at all , plus 12k to live on throughout my extended-beyond-natural life span. Please give this to me, and my 8.2 million other friends every year, while you struggle to find work because I didn't bother to innovate new productive ways for our country to prosper."


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## sags (May 15, 2010)

Peterk..........you pretty well nailed it.


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## new dog (Jun 21, 2016)

Millennials don't need to save they should enjoy life according to expert.

http://finance.yahoo.com/video/memo-millennials-spend-now-save-184300165.html

I am glad I didn't think of this when I was younger, although I suppose I would have seen more of the world.


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## sags (May 15, 2010)

Good for them..........part of their new "life experiences" will be living in poverty.


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## My Own Advisor (Sep 24, 2012)

new dog said:


> Millennials don't need to save they should enjoy life according to expert.
> 
> http://finance.yahoo.com/video/memo-millennials-spend-now-save-184300165.html
> 
> I am glad I didn't think of this when I was younger, although I suppose I would have seen more of the world.


Horrific advice.

Nothing wrong with experiences. But how? Don't you need to make money to enjoy experiences? 

"Happy travels!"


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## bgc_fan (Apr 5, 2009)

My Own Advisor said:


> Horrific advice.
> 
> Nothing wrong with experiences. But how? Don't you need to make money to enjoy experiences?
> 
> "Happy travels!"


Is it really that new? Or do you just like critizing millenials? It doesn't sound much different than the Die Broke book that some people here are fans of. Not to mention he points out emphasizing experiences over physical goods. So instead of spending money on buying a car, use public transport and use the money for travel or whatever floats your boat.


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## james4beach (Nov 15, 2012)

I'm a millennial (graduated from high school in 2000) but I want to point out that not all millennials are silly and frivolous.

I started running my own business at age 16, and earned income through high school and university. Paid my way through college while running a sole proprietorship and ended up with $100,000 in savings by age 24.

I come from that silly generation, but I work hard ... I worry about retirement ... I know it's an uphill battle and there are no pensions, no guarantees in my future. I feel like I understand everything that you older CMF'ers write about in the Retirement thread. I'm already trying to strategize and make my life as good as possible.

Personally I feel like I live during a Depression of sorts. Me & my friends keep getting laid off. There is no job stability. No pensions any more. Two market crashes since I graduated from high school. Real wages have been stagnant for decades, housing is completely unaffordable (even as a guy earning > 100k). I'm not planning on ever owning a home, and frankly I think that's the least of my problems. I will consider it a success if I am comfortable and can meet my basic requirements in retirement.

Perhaps a bit on the pessimistic side? Just realize, there are people like me out there. I pay a lot of taxes... I am HAPPY to pay my taxes (both to US & Canada by the way), happy to do my part to fund CPP, OAS, EI and health care.


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## Daniel A. (Mar 20, 2011)

His thinking is no different than those of the sixties, most of us grew up and so will he when challenged to change. Family life will set things in motion.
I find it interesting when I read how one generation is trying to define itself as leaders of this issue or that one don't realize that issues such as the environment, social awareness, are old issues that have be held by other generations.


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## janus10 (Nov 7, 2013)

For the original subject in this thread, I would expect that 20 years from now the percentage could be smaller, i.e. fewer Americans will have less than $30k (inflation adjusted) saved. This would be because proportionally more and more people at that time will not have had the benefit of a DB pension and will need to be self-reliant.

As for the video, I thought the gentleman sounded very reasonable. I'm about 20 or so years from being regarded as a millennial, but I interpreted it to mean that seek a balance - don't eschew experiences for the sake of materialism or unwavering obsession about saving for the future. How many times have we seen in this thread (maybe our lives) where someone works hard, saves up, then retires and is either too unhealthy (or even dead) to finally enjoy the fruits of their labour?

He didn't advocate spend everything you make, and he didn't suggest that it wasn't important to put away for the future. He did suggest that there is a change in social consciousness that sounds to me like a return to the '60s after the Gordon Gecko '80s and the stagnation of wage growth flying in the face of worshiping hyperconsumption in the last decade or so.

Personally, I can't think of too much that I could buy that would really make me happy. But, travel, experiencing those new discoveries, with family? That would be where I would be looking to spend my money and time and energy. Fortunately, I've been lucky enough to do that every year for the last 20 years.


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## bass player (Jan 27, 2016)

marina628 said:


> My poor student daughter moved out to her new apartment today ,She has brand new furniture that she saved and paid for.She made $17,000 last year from working plus got a $9300 student loan ,fico score 780 and $8100 in her bank account.This year she is not getting a student loan as we are paying 100% schooling expenses but she has to work to pay her rent.


Buying brand new furniture as a student with debt seems to be a poor financial decision. Perfectly good furniture is worth pennies on the dollar used, and there is an endless supply of people giving furniture away for free when they get bored with it.


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## OnlyMyOpinion (Sep 1, 2013)

bass player said:


> Buying brand new furniture as a student with debt seems to be a poor financial decision. Perfectly good furniture is worth pennies on the dollar used, and there is an endless supply of people giving furniture away for free when they get bored with it.


Jeez, Marina posted that 4 years ago. Her daughter has probably sold and moved onto another new set of furniture by now


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## canew90 (Jul 13, 2016)

Not possible, but I wonder how many or what % are in that situation because of their own short comings Even a person on minimum wages could save a certain amount and over time those savings would grow and generate at least a small amount of income to offset expenses. I've heard many people say "Why bother saving, I just don't make enough money", but they manage to spend $75/ mo on cigs, $100/ mo on booze or more and who know how much on lotto\casinos.


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