Of course, Earnings are poised to drop dramatically in the coming year(s?). That will skew the ratio but at least it's a yardstick.
I expect the P/E for the S&P 500 to wilt all the way down to 6, possibly 8. It's a generational event. Most of the public won't invest -- after the real bottom is reached -- ever again in the stock market.
Not as young as I would have liked. I must have been 10-12 when I remember starting to save. I have my kids saving starting at an earlier age. They started at 7 and 11 and put 25% of any allowance they earn into their savings accounts. My son is great and saving but my daughter has want-itis and saving is really hard for her.
I disagree with the idea that it is okay for some investors to fail to time the market. My view is that long-term timing is mandatory for non-gamblers.
To time the market is to change your allocation in response to price changes. If you fail to time the market, you are staying with the same stock allocation at all possible price levels. That's Passive Investing. That's failing to take price considerations into account when setting your stock allocation.
The historical data shows that this has never worked in the real world. The price you pay for stocks affects the long-term value proposition you obtain from them. If you fail even to look at price, you are gambling with your money, not investing it.
I've always been a person that never spends too much. But when I moved into my own condo at 26, I really had to start saving for the mortgage. I started buying generic brands, clipping coupons, and just do more deal searching in general.
I started saving when I was 18. I was babysitting over the summer and split my checks 50-50 checking/savings. Now that I have a job, I have them direct deposit about 40% of my paycheck into my savings account and I do not touch it. I have found this to be more or less effective, but the temptation to transfer money from my savings is huge, especially with online banking.
I recieved a check in the mail last week, in the amount of $3,840 from a company named Service Performance Group, Inc.. My assignment was to deposit the check and withdrawl $3540. I was to go to any western union or money gram and transfer $3250.00 to someone name Garry Fuller. $190 was for the cost of transfer fees, I could keep the remaining as my salary or for shopping. Plus $100 for shopping at any Sears, Wal Mart, Kmart, Victoria's Secret, Home Depot, JcPenny and so on... and i could keep whatever i bought. I was to call my "assigned coordinator" Mellissa Cole after every assignment. She instructed me to fax all the required forms to the phony fax number. I must have tried to fax these papers 5 times, and everytimei did, i'd get a busy signal or it told me that the number was not a working one. The holiday was coming up, so i was going to wait till monday to call my "coordinator". By this time i checked my checking account activity and it was negative $3400 because that check i cashed was a fake! This morning I searched that internet for the company and it came up legit. So, I called the customer service number on the website. the man that picked up the phone immediately told me that i was scammed and that the people who were scamming me are using his good company name. I knew that it was too good to be true! Now i'm out almost over $3500 dollars. Money we could've saved for the arrival of our new baby and payments on our new car. I was scammed! If i report this to the police, will i be in trouble for sending large amounts of money to someone i didn't know?
As a kid, I was really good about savings. Back then my financial goals included saving for Barbie dolls and new bicycle. I had an allowance and would put money away in my piggy bank until I could buy what I wanted.
Then my teen years hit. Suddenly it was all about instant gratification. I always worked through high school but I didn't think about the future. I lived paycheck to paycheck. When I got a credit card in college...yeah, suddenly I was working to pay my next credit card bill. My dad bailed me out but it wasn't without strings...I had to create a budget and savings plan.
Since then, I've been better about savings. Better, not perfect. ;)
Started saving at 5 yrs old with a plastic piggy bank from the Dollar General Store. Was one of the cheapest ($2.00) and best gift anyone ever game me. I miss him now but he's long gone (got him in 1980).
I will admit I wasn't much of a saver until about 2 years ago. Not sure what changed. Started saving in a regular bank and then got a jar and saved change. I've turned in lots of change in the last few years. It does add up. Plus, it supports me using cash instead of credit. I like to get coins back for my savings jar.
I have worked, and I have stayed home. The staying at home was not prompted by myself, I was laid off. I had a high stress executive position that paid very well, much more than my husbands salary. While I have been home for the last 6 months I have learned some things. Originally I felt that staying home was a weak choice, unwise and why would you waste your life like that after all that women's liberation has done. Now, I feel much differently. While I was working full-time "having it all", I was extremely stressed, could not take care of my home consistently well, had very little to no energy left to support my husband physically or emotionally, and suffered physical chest pains and anxiety attacks. After the layoff, it took me months to get my house organized from all the papers and stuff that just never got done, important papers that were lost, projects that were never completed. Now that I am home, I can take care of my three year old son, I make meals every day, I shop the sales and use coupons and have been able to support my husband so much that he has showed a significant change in his career and is now poised to start a job that doubles his salary. I don't believe that is a coincidence, he never got the support with his career before from me because I was too busy and stressed with keeping my career going. Our marriage has improved immeasurably. He now has a greater pride in his work. I now have more respect for him because of how he stepped into the role of breadwinner and how hard he is working. Yes, it is a risk to stay home and put your career on hold and be subject to being supported financially by your husband, but I believe it is possibly also VERY risky to your marriage to NOT be there for your husband and perhaps this subtle nuance might need to be emphasized to young women that the LACK OF emotional, and physical presence, and support of your husband can also lead to financial disaster if your marriage fails-and that is also very risky. No one in my family has been a stay at home mom permanently, I never even thought of being one-ever. While I was growing up I constantly heard, develop your career, get an education, work hard, never depend on a man......well, sometimes I think you can take it to far where women begin to let on that they no longer feel a man is necessary or needed. I learned that I do enjoy staying home, I am looking for work because we need to catch up on bills, and save for retirement. But, we this has been a defining moment for my life, we will live on one income-HIS, and save and invest and pay off bills with my income and hopefully I can go back to part-time work only eventually because I have learned that I really enjoy staying home and taking care of my family. It makes me happy to make a home for my husband and son, and make special moments for them.
I was 38 and my husband was 35. Horrid I know. It is for retirement only, as we need to pay off debt before we can beef up personal savings beyond the $1,000. emergency fund. My kids have been saving every month though. I'm hoping they will learn these things at their young ages and it'll be a lifetime habit.
I honestly can't remember when I started saving. I remember putting pennies in a piggy bank even before I had an allowance. Once I started baby-sitting and got a paper route, a certain amount of my earnings went into savings bonds for college.
But I think I'd still peg my real savings efforts as starting at 22. That's when my money (and savings) stopped going towards college and started going towards retirement and an emergency fund.
I'd have to say that I was 23 when I first started saving seriously (after completing my Masters), and my savings method is simple; I put the first 30 - 40% of my paycheck in the bank on payday and invest across a diversified portfolio.
Granted I'm only recently married (now 27), have $0 student loans, have a good paying job as a consultant, rent, and have no kids so this may be easier said than done. But one of the best pieces of advice I ever received was not to buy a new car after graduatation (I drive a 10 year old Toyota). Point being, always live below your means. It's definitely made the current economic crisis easier to stomach.
I only began saving in a serious way last year, at the age of 25. I didn't have any good financial role models, so it took awhile for me to learn the value of saving money. But I'm saving diligently, and paying off debt at the same time, and I'm proud of my progress. I only wish I'd started 5 years ago.
I started saving involuntarily when I was 9 and my mom put most of my paper route money into a savings account. When I was about 18 my goal was to move out of my parent's house, so I began seriously saving, mostly by not spending on wants (only needs such as food, gas). As an adult I looked for ways to make meals out of basic ingredients, bought second hand, shopped sales, and used direct deposit to set aside a certain amount of income to savings. Now, I also use simple budgeting software so that I see more clearly what I am working with, where my money is going and what I have allocated for each month.
I started saving for retirement (401k) when I got my first real job after college at 22. I started seriously saving for anything besides retirement this year (for my wedding). Hopefully after I get married in September, I can divert savings to other goals...
Had my first job when I was six years old. Okay, it wasn't working in the diamond mine or anything ... my grandmother paid me to roll coins for her. She had this big jar of change and she told me should would give me half of the money if I would put all the coins into rolls.
I worked my little fingers raw rolling up the pennies, imagining all the amazing things I was going to buy. When we took the rolls to the bank to cash them in, Grandma promptly took me over and opened up a savings passbook account and deposited all my hard earned money into it. (I should mention that she was a teller at the bank.) Then she added all of her money from the coins as well and told me she would match any money I saved dollar for dollar.
I learned a great lesson that day. I guess my greed for those matching dollars overcame my desire for the candy and toys I was planning on buying, and a saver was born.
Grandma kept her end of the bargain and eventually that passbook savings account paid for my first year of college.
My parents never gave me nor my younger brother allowance while we were growing up. However, my dad would once in a while give me his pocket change and I'd keep all of it in my desk somewhere.
One day, I saw in my school math textbook a tutorial on how to create a pyramid "piggy bank" from cardboard, so I decided to make one. From then on, I started saving all the loose change in there. My mom later bought me a "real" piggy bank after my cardboard one filled up.
When I was old enough to have my own part-time jobs (camp counselling, paper route), I started a savings account at our local bank with the help of my parents.
I think the fact that our parents never gave us an allowance actually helped my brother and I be more conscious of our money. The only "debt" I've had was student loans, and right now, four years after university, I'm debt-free. My husband and I are trying to save for our first house, and it's not easy even though we're pretty careful with our money (I'm more careful than he is, but there's got to be a balance, right?)!
When I was 16 I got a job at a grocery store making $5.75 an hour. After that I could never look at money the same way again. I attached time to every item that I saw that I wanted to buy, asking myself: Is buying this worth being in the grocery store for X hours? Usually the answer was no, so I basically saved my entire paycheck every week.
The rule when I was growing up was that half of everything I received had to go into the piggy bank/bank. I changed the percentage when I got my first job but continued to save though high school and college.
With my first 'real' job my salary didn't match cost of living, so occasionally I hit the savings but kept adding to them. Grad school + my fiancee being unemployed for long periods killed all of the savings we had, though over the past year we've been working on saving and paying down debt.
I started seriously saving at 16, when I got my first job. I was raised that saving was important, although money mattered more than it probably should have in our household. But when i got my first paycheck I put most of it into a savings account and only kept a little in cash for myself.
I had the BoA promotion for about a few months, and for the first couple of months things were fine. However, soon after I started noticing the $3 monthly maintenance fee. Typical BoA scam. I was basically being charged for moving my money around. Lesson learned.
Started at a very young age, five or six years old. Back in the fifties banks would encourage you to save and offer really neat banks for your savings. Every month or two I would empty my banks and take the coins and my passbook to the bank. They would offer some new type of little bank to put my coins in and this went on for years.
I went into the military in 1962 and had drafts from my paycheck sent to my hometown passbook savings account. After four plus years in the military I withdrew from my passbook account and ordered a new car and was able to pay cash for it.
During my forty plus years of employment I would contribute to my retirement account, buy savings bonds and later saved into my 401 account.
Guess my savings habits carried over into my retirement years where at sixty five I still put a little each month into a savings account or mutual fund.
The negative is I still have credit card debt but nothing too serious and use my credit cards for a major purchase, foolish perhaps but hate to use savings.
I was having this conversation with my fiance last night. The question was: did having massive student loan debt put us in a position to follow our dreams?
My answer is yes. Combined we have over 100k of student loan debt but it's low-interest debt. More importantly, it is a huge looming responsibility that has made us change our behaviors - we spend less, invest wisely, wear things out, spend less than we earn. Because we're changing our habits for long-term planning, we're actually able to save far more than we need to meet the minimums on our loans. We could pay off the loans more quickly or... save for a down payment, take a 6-month sabbatical in Europe, or pay for a fancy wedding. The point being that we are in control of our lives and know where our money is going.
Until I started writing down where every single penny of my money went (that was 6 months ago), I wasn't seriously saving for anything. Now I'm considering the vast possibilities available to me in life. It's a nice feeling.
Don't watch price. Instead watch historical P/E Price/Earnings ratio.
Of course, Earnings are poised to drop dramatically in the coming year(s?). That will skew the ratio but at least it's a yardstick.
I expect the P/E for the S&P 500 to wilt all the way down to 6, possibly 8. It's a generational event. Most of the public won't invest -- after the real bottom is reached -- ever again in the stock market.
Not as young as I would have liked. I must have been 10-12 when I remember starting to save. I have my kids saving starting at an earlier age. They started at 7 and 11 and put 25% of any allowance they earn into their savings accounts. My son is great and saving but my daughter has want-itis and saving is really hard for her.
I disagree with the idea that it is okay for some investors to fail to time the market. My view is that long-term timing is mandatory for non-gamblers.
To time the market is to change your allocation in response to price changes. If you fail to time the market, you are staying with the same stock allocation at all possible price levels. That's Passive Investing. That's failing to take price considerations into account when setting your stock allocation.
The historical data shows that this has never worked in the real world. The price you pay for stocks affects the long-term value proposition you obtain from them. If you fail even to look at price, you are gambling with your money, not investing it.
Rob
I've always been a person that never spends too much. But when I moved into my own condo at 26, I really had to start saving for the mortgage. I started buying generic brands, clipping coupons, and just do more deal searching in general.
I started saving when I was 18. I was babysitting over the summer and split my checks 50-50 checking/savings. Now that I have a job, I have them direct deposit about 40% of my paycheck into my savings account and I do not touch it. I have found this to be more or less effective, but the temptation to transfer money from my savings is huge, especially with online banking.
I recieved a check in the mail last week, in the amount of $3,840 from a company named Service Performance Group, Inc.. My assignment was to deposit the check and withdrawl $3540. I was to go to any western union or money gram and transfer $3250.00 to someone name Garry Fuller. $190 was for the cost of transfer fees, I could keep the remaining as my salary or for shopping. Plus $100 for shopping at any Sears, Wal Mart, Kmart, Victoria's Secret, Home Depot, JcPenny and so on... and i could keep whatever i bought. I was to call my "assigned coordinator" Mellissa Cole after every assignment. She instructed me to fax all the required forms to the phony fax number. I must have tried to fax these papers 5 times, and everytimei did, i'd get a busy signal or it told me that the number was not a working one. The holiday was coming up, so i was going to wait till monday to call my "coordinator". By this time i checked my checking account activity and it was negative $3400 because that check i cashed was a fake! This morning I searched that internet for the company and it came up legit. So, I called the customer service number on the website. the man that picked up the phone immediately told me that i was scammed and that the people who were scamming me are using his good company name. I knew that it was too good to be true! Now i'm out almost over $3500 dollars. Money we could've saved for the arrival of our new baby and payments on our new car. I was scammed! If i report this to the police, will i be in trouble for sending large amounts of money to someone i didn't know?
As a kid, I was really good about savings. Back then my financial goals included saving for Barbie dolls and new bicycle. I had an allowance and would put money away in my piggy bank until I could buy what I wanted.
Then my teen years hit. Suddenly it was all about instant gratification. I always worked through high school but I didn't think about the future. I lived paycheck to paycheck. When I got a credit card in college...yeah, suddenly I was working to pay my next credit card bill. My dad bailed me out but it wasn't without strings...I had to create a budget and savings plan.
Since then, I've been better about savings. Better, not perfect. ;)
Started saving at 5 yrs old with a plastic piggy bank from the Dollar General Store. Was one of the cheapest ($2.00) and best gift anyone ever game me. I miss him now but he's long gone (got him in 1980).
I will admit I wasn't much of a saver until about 2 years ago. Not sure what changed. Started saving in a regular bank and then got a jar and saved change. I've turned in lots of change in the last few years. It does add up. Plus, it supports me using cash instead of credit. I like to get coins back for my savings jar.
:)
I started saving with my first paycheck. In my household, money was meant to be saved, not spent. It is a mentality I still have today.
I have worked, and I have stayed home. The staying at home was not prompted by myself, I was laid off. I had a high stress executive position that paid very well, much more than my husbands salary. While I have been home for the last 6 months I have learned some things. Originally I felt that staying home was a weak choice, unwise and why would you waste your life like that after all that women's liberation has done. Now, I feel much differently. While I was working full-time "having it all", I was extremely stressed, could not take care of my home consistently well, had very little to no energy left to support my husband physically or emotionally, and suffered physical chest pains and anxiety attacks. After the layoff, it took me months to get my house organized from all the papers and stuff that just never got done, important papers that were lost, projects that were never completed. Now that I am home, I can take care of my three year old son, I make meals every day, I shop the sales and use coupons and have been able to support my husband so much that he has showed a significant change in his career and is now poised to start a job that doubles his salary. I don't believe that is a coincidence, he never got the support with his career before from me because I was too busy and stressed with keeping my career going. Our marriage has improved immeasurably. He now has a greater pride in his work. I now have more respect for him because of how he stepped into the role of breadwinner and how hard he is working. Yes, it is a risk to stay home and put your career on hold and be subject to being supported financially by your husband, but I believe it is possibly also VERY risky to your marriage to NOT be there for your husband and perhaps this subtle nuance might need to be emphasized to young women that the LACK OF emotional, and physical presence, and support of your husband can also lead to financial disaster if your marriage fails-and that is also very risky. No one in my family has been a stay at home mom permanently, I never even thought of being one-ever. While I was growing up I constantly heard, develop your career, get an education, work hard, never depend on a man......well, sometimes I think you can take it to far where women begin to let on that they no longer feel a man is necessary or needed. I learned that I do enjoy staying home, I am looking for work because we need to catch up on bills, and save for retirement. But, we this has been a defining moment for my life, we will live on one income-HIS, and save and invest and pay off bills with my income and hopefully I can go back to part-time work only eventually because I have learned that I really enjoy staying home and taking care of my family. It makes me happy to make a home for my husband and son, and make special moments for them.
I was 38 and my husband was 35. Horrid I know. It is for retirement only, as we need to pay off debt before we can beef up personal savings beyond the $1,000. emergency fund. My kids have been saving every month though. I'm hoping they will learn these things at their young ages and it'll be a lifetime habit.
I honestly can't remember when I started saving. I remember putting pennies in a piggy bank even before I had an allowance. Once I started baby-sitting and got a paper route, a certain amount of my earnings went into savings bonds for college.
But I think I'd still peg my real savings efforts as starting at 22. That's when my money (and savings) stopped going towards college and started going towards retirement and an emergency fund.
I'd have to say that I was 23 when I first started saving seriously (after completing my Masters), and my savings method is simple; I put the first 30 - 40% of my paycheck in the bank on payday and invest across a diversified portfolio.
Granted I'm only recently married (now 27), have $0 student loans, have a good paying job as a consultant, rent, and have no kids so this may be easier said than done. But one of the best pieces of advice I ever received was not to buy a new car after graduatation (I drive a 10 year old Toyota). Point being, always live below your means. It's definitely made the current economic crisis easier to stomach.
I only began saving in a serious way last year, at the age of 25. I didn't have any good financial role models, so it took awhile for me to learn the value of saving money. But I'm saving diligently, and paying off debt at the same time, and I'm proud of my progress. I only wish I'd started 5 years ago.
I started saving involuntarily when I was 9 and my mom put most of my paper route money into a savings account. When I was about 18 my goal was to move out of my parent's house, so I began seriously saving, mostly by not spending on wants (only needs such as food, gas). As an adult I looked for ways to make meals out of basic ingredients, bought second hand, shopped sales, and used direct deposit to set aside a certain amount of income to savings. Now, I also use simple budgeting software so that I see more clearly what I am working with, where my money is going and what I have allocated for each month.
I started saving for retirement (401k) when I got my first real job after college at 22. I started seriously saving for anything besides retirement this year (for my wedding). Hopefully after I get married in September, I can divert savings to other goals...
Had my first job when I was six years old. Okay, it wasn't working in the diamond mine or anything ... my grandmother paid me to roll coins for her. She had this big jar of change and she told me should would give me half of the money if I would put all the coins into rolls.
I worked my little fingers raw rolling up the pennies, imagining all the amazing things I was going to buy. When we took the rolls to the bank to cash them in, Grandma promptly took me over and opened up a savings passbook account and deposited all my hard earned money into it. (I should mention that she was a teller at the bank.) Then she added all of her money from the coins as well and told me she would match any money I saved dollar for dollar.
I learned a great lesson that day. I guess my greed for those matching dollars overcame my desire for the candy and toys I was planning on buying, and a saver was born.
Grandma kept her end of the bargain and eventually that passbook savings account paid for my first year of college.
My parents never gave me nor my younger brother allowance while we were growing up. However, my dad would once in a while give me his pocket change and I'd keep all of it in my desk somewhere.
One day, I saw in my school math textbook a tutorial on how to create a pyramid "piggy bank" from cardboard, so I decided to make one. From then on, I started saving all the loose change in there. My mom later bought me a "real" piggy bank after my cardboard one filled up.
When I was old enough to have my own part-time jobs (camp counselling, paper route), I started a savings account at our local bank with the help of my parents.
I think the fact that our parents never gave us an allowance actually helped my brother and I be more conscious of our money. The only "debt" I've had was student loans, and right now, four years after university, I'm debt-free. My husband and I are trying to save for our first house, and it's not easy even though we're pretty careful with our money (I'm more careful than he is, but there's got to be a balance, right?)!
When I was 16 I got a job at a grocery store making $5.75 an hour. After that I could never look at money the same way again. I attached time to every item that I saw that I wanted to buy, asking myself: Is buying this worth being in the grocery store for X hours? Usually the answer was no, so I basically saved my entire paycheck every week.
I started late in life (35years old), but I am making strides...
The rule when I was growing up was that half of everything I received had to go into the piggy bank/bank. I changed the percentage when I got my first job but continued to save though high school and college.
With my first 'real' job my salary didn't match cost of living, so occasionally I hit the savings but kept adding to them. Grad school + my fiancee being unemployed for long periods killed all of the savings we had, though over the past year we've been working on saving and paying down debt.
I started seriously saving at 16, when I got my first job. I was raised that saving was important, although money mattered more than it probably should have in our household. But when i got my first paycheck I put most of it into a savings account and only kept a little in cash for myself.
I had the BoA promotion for about a few months, and for the first couple of months things were fine. However, soon after I started noticing the $3 monthly maintenance fee. Typical BoA scam. I was basically being charged for moving my money around. Lesson learned.
Started at a very young age, five or six years old. Back in the fifties banks would encourage you to save and offer really neat banks for your savings. Every month or two I would empty my banks and take the coins and my passbook to the bank. They would offer some new type of little bank to put my coins in and this went on for years.
I went into the military in 1962 and had drafts from my paycheck sent to my hometown passbook savings account. After four plus years in the military I withdrew from my passbook account and ordered a new car and was able to pay cash for it.
During my forty plus years of employment I would contribute to my retirement account, buy savings bonds and later saved into my 401 account.
Guess my savings habits carried over into my retirement years where at sixty five I still put a little each month into a savings account or mutual fund.
The negative is I still have credit card debt but nothing too serious and use my credit cards for a major purchase, foolish perhaps but hate to use savings.
I was having this conversation with my fiance last night. The question was: did having massive student loan debt put us in a position to follow our dreams?
My answer is yes. Combined we have over 100k of student loan debt but it's low-interest debt. More importantly, it is a huge looming responsibility that has made us change our behaviors - we spend less, invest wisely, wear things out, spend less than we earn. Because we're changing our habits for long-term planning, we're actually able to save far more than we need to meet the minimums on our loans. We could pay off the loans more quickly or... save for a down payment, take a 6-month sabbatical in Europe, or pay for a fancy wedding. The point being that we are in control of our lives and know where our money is going.
Until I started writing down where every single penny of my money went (that was 6 months ago), I wasn't seriously saving for anything. Now I'm considering the vast possibilities available to me in life. It's a nice feeling.