Retiring Early

Saturday, April 21, 2007

Mixed bag: More young savers and shaking moochers

Well, I'm finally back from vacation and very refreshed. I'll probably write a quick post about vacation tomorrow, but today, I came across an article with a few interesting takeaways:

Although the article is titled "Young strivers see slacker friends as costly", the article has a few interesting takeaways other than how to lose your loser friends when you are raking in the dough. First, from a Scottrade survey, it seems as if younger folks may be thinking more about saving earlier:
Scottrade’s recent 2007 American Retirement Study found an astonishing level of financial maturity for its youngest adult respondents."While 59 percent of 18-24 year-olds said they saved for retirement in 2006, that number jumped to 89 percent for those who said they planned to save in 2007. Of 25-to-34-year olds, 70 percent saved in 2006 while 85 percent indicated they will save in 2007," says Chris Moloney, chief marketing officer for the St. Louis-based broker. "Previously, people waited for assets to accumulate before they began thinking about their financial futures and retirement. With the Internet and the wealth of information available to them, many are starting younger," he adds.
Pretty good to see this data. Whether they actually follow through on actually saving is another matter, but it's a start. The other quote of interest is the following one that touches on being social with friends who have a lot more or a lot less money than you do. It's usually a tricky situation to navigate, and I tend to "go humble" when faced with these situations (i.e., if you're having dinner with a friend who makes $40,000/yr, pick a low-priced restaurant, not the latest restaurant where you'll easily spend $80/person):
"When a teacher and a stockbroker are old college friends, for instance, you find their dramatically different financial resources often create tension," says Draut. "The stockbroker may resent the teacher expecting her to treat her to dinner, but the teacher may be equally resentful her friend chose such an expensive restaurant."

Such inequities create social awkwardness, yet little conversation, observes Draut. "It is hard to be the friend who says, 'I can’t come along because the restaurant is too expensive for me.' But we need to make it OK to start having these conversations; to start saying, ‘I cannot afford it.’ "

And conversely: "I cannot keep floating you."

You have to love that last quote. I've certainly been guilty of treating less fortunate friends in the past, but I've learned that lesson. Interesting discussion -- just imagine what happens between a handful of retired 80 year olds after indulging in the surf-and-turf early-bird special. :)


  • At 4/21/2007 9:32 PM, Blogger StealthBucks said…

    Interesting read. The same issues can apply with family. When we get together with extended family, it is important to pick restaurants that are affordable for all, hotels on trips that also have camp sites near by. (Reunions bring out all economic levels in relatives) and be aware of flaunitng anything. We are the wealthiest in both of our extended families and we also had to stop paying for every dinner for every family member in town (We have big families).

    I think 20 somethings just haven't figured out how to not spend yet and have a need to impress others. Heck, we drive older cars, I hate buying new clothes, and only go to nice restaurants when an employer pays. The thrill of dropping $400 on dinner for friends in a loud restaurant in Belltown is dead, dead, dead. Give me a well grilled Costco New York, a couple bottles of decent wine and friends who bring the side dish and salad and it's a non pretentious party.

  • At 4/25/2007 12:45 PM, Blogger moneymonk said…

    Good Post!
    It's good to see 20somethings are finally getting their prioties together.

  • At 5/05/2007 2:02 AM, Anonymous Anonymous said…

    I’m being called stingy by my friends just because I don’t like to spend. They just don’t know that I’m already started planning for my future. Here check out this software It is interesting.


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