Metaphorically, yes. But you absolutely should open them periodically. If there has been theft or an error, you want to report it immediately, not 50 years later.
I have three pensions plus my SIPP (self invested) running at the moment.
We don't have IRA's we do have ISA's which are awesome in comparison (basically remove £20k pa into a tax efficient account)
I think my main DC pension is about .5 and I will be moving my small NEST (government scheme) over to my self run pension shortly.
Sometimes it's worth it to spend the extra money. The example that's burned into my brain is hiring movers.
Or a nice coat. A nice coat doesn’t come cheap but it’ll last years.
(Actually I think this applies to clothing generally. I don’t buy many clothes because I rarely buy cheap clothes.)
"This shirt's dry clean only, which means it's dirty" -Mitch
Assume it is the same advice government takes when procuring public projects...
* Use money to make money.
* Never get sick.
* Never get divorced.
* Never get caught.
How many people are going to be able to live on one spouse's income alone? Of those who can, how many will want that second income vs time with the kids?
About not getting into debt, how many people are can go to college ("invest in yourself") without?
IMO the only good piece of advice is "be smart about probabilities", which if you follow it to its logical conclusion basically just means be informed about the facts, a general piece of life advice that makes a lot of sense.
As far as never going into debt, I think you should interpret that a bit more loosely. Obviously, going to college has huge payoffs in a few short years. That is more of an investment as long as one chose and affordable college. Taking out a loan on a new BMW or Tesla is debt.
Come on now. It's about what is generally achievable. Imagine living in London on £25K, which is roughly the median. If you find another median salary, are you gonna save it all? Unlikely.
I'm moving out because it's an inheritance society. You need an income of more than 150-200K to buy a family home that isn't crap by the standards of anyone outside of the bubble.
It really is that simple. London is closed to newcomers. Go and have your fun as a youngster - but setting up there is daft unless you're an entrepreneur and will actually make big money.
Salaries in the rest of the country are lower, so you'd be making a similar comparison with let's say $20K in eg Sheffield.
Obviously there's people living on that budget, but the point of the advice was to not break that budget, even if twice the amount were available.
Which even if you're very frugal you are unlikely to do. You're gonna think of something to spend that extra 20K on, and it's not dumb to spend at least some of it.
To me the advice sounds like "if you and your wife are partners in law firms, save half the money".
A few years ago I did the same with a Prius and surprisingly, if you drive a lot, a Prius was the cheapest car you could buy.
Like 95% of the rest of the developed world ;)
Are there any others?
However it is more like a graduate tax than loan, if you don't earn much you don't pay it back and it gets written off after 25 years.
Source: I grew up in one of those places, plenty of people will borrow from the government on top of what they are given.
FWIW I wasn't suggesting that students in other countries don't take any loans, I was pointing out that they don't necessarily have to.
In Germany, for example, there is a government loan system for studying, where you get enough per month, and only have to pay back ~20 months of it (which is a fraction of the time in college), and can pay it back under quite good conditions. In Spain, it is common for students to live with their families, work, or for their families to help them a bit.
Many students don't take a loan, and ether work ~15h/week, or get money from parents, or both. Even poor families are able to push 2 children through college without accumulating debt.
If tuition here were to cost, e.g, 3000 EUR/year, many families and students wouldn't be able to do that. If tuition were to cost 20k EUR or more / year, most families would need to indebt themselves.
Yeah you still have to have the money for food and place to live, but you'd need that anyway, and it's not that expansive. Most people get these money from their parents without loaning any money from banks.
>In Italy there is (was, as it is not much used anymore) proverb: "Fare i conti spesso, moderar le voglie, spender men di quel che si raccoglie".
>It cannot be translated easily, but more or less it amounts to:
>Do the (financial) math often, limit your cravings, spend less than you can gather.
Two working couples:
- Two incomes
- Shared health plan (more expensive but less than 2x single?)
- Shared apartment (more expensive to support two occupants but less than 2x single?)
- Opportunities to reduce duplicated expenses when possible: e.g. single set of furniture, single car, joint loans (e.g. mortgage + closing costs), repairs, etc.
If one of the partners is not working I believe there are still advantages but they might be harder to quantify. Even if it means cutting out one of the incomes, having a time-available partner can be advantageous in other ways. Time to cook vs. eat out (more cost effective), organize bills, find discounts and deals (e.g. credit card churning for saving ~1k-2k a year on flights), organizing activities to maintain health, arrange doctor visits for preventative care, etc.
Obviously, this equation changes when one is a dependent but if both are independent and work together I feel that the math would favor couples.
- double income
- motivation and accountability
- delegation of responsibilities. You don't have to do everything yourself.
The current divorce rate for first marriages where both partners have a bachelors is around 10%.
The thing I don’t think these statistics always reflect is the societal changes over the decades. Why people marry, when they marry, ease of divorce, the effects of widespread divorce on upcoming generations, it’s all changed enormously over time.
financial health is not a goal, but a means to an end.
Getting good financial health is a means to having kids (ie, you will give your kids the best advantage they could if you're more financially capable).
Every case is different, but I don’t think you have to be under one roof to significantly help some people keep their independence and avoid spending money on caregivers that are very expensive especially
On the other hand this advice is 50% right if you ever do get a divorce. Those things are so expensive and leave a huge hole behind. If you were the primary money earner you are likely to pay for years.
Earn more spend less.