Author Topic: Serious SS question  (Read 4429 times)

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sirs

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Serious SS question
« on: January 22, 2008, 01:16:16 PM »
We all keep getting the same bandwagon of distorted condemnations aimed at anything SS & Stockmarket.  This question goes out to those with a business sense of understanding

At anytime in modern day U.S. history has the stock market, over a 30year period of time (a conservative number for a retiree, since it's much more likely to be pushing 50+yrs), provided a return less than what one put in??  Or more pertinent, has there been such a period that demonstrated a return LESS than that of SS??

The floor is opn to any answers
"The worst form of inequality is to try to make unequal things equal." -- Aristotle

Xavier_Onassis

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Re: Serious SS question
« Reply #1 on: January 22, 2008, 03:17:44 PM »
The main difference is that SS will pay you for as long as you live. Your stock market investment will only pay out until they are gone.

The intent and advantage of SS is that it pervodes everyone, even the improvedent, of which this country surely has hundreds of thousands, with enough so that they will not starve, which is what many did before SS.

SS is a RETIREMENT arrangement. The stock market is an INVESTMENT arrangement. Most small investors buy high, sell low and end up with less than they put in. You are comparing apples and celery here.

Some of the largest mutual funds in the country are LOAD funds, and underperform. This is evidence that many Americans are just not much good at investing. One gets nothing for the load on a mutual fund.
"Time flies like an arrow; fruit flies like a banana."

sirs

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Re: Serious SS question
« Reply #2 on: January 22, 2008, 03:31:20 PM »
So, seriously, is anyone gonna actually address the question(s), vs trying to deflect from the "obvious"?
"The worst form of inequality is to try to make unequal things equal." -- Aristotle

Michael Tee

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Re: Serious SS question
« Reply #3 on: January 22, 2008, 03:32:26 PM »
I don't see how anyone could answer the question without first assembling a traditional "basket" of stocks to be held over the 30-year period.  And then there'd be a wide variation because of the choice of "basket" components.  Also, realistically, nobody stays married to every stock in his or her "basket" for 30 years.

At the end of the day, some folks did well in the market over the long haul, and some not so well.  The ones who I know did well are very shrewd professionals, most of them accountants.  I can't think of any working class people I know who did well in the stock market.  OTOH, I know a lot of working class people who did very well in residential real estate investments, several of whom are multi-millionaires.  My own take is that with the exception of some exceptionally savvy investors, most folks would have done a lot better in real estate than in the market.

sirs

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Re: Serious SS question
« Reply #4 on: January 22, 2008, 03:43:01 PM »
I don't see how anyone could answer the question...realistically, nobody stays married to every stock in his or her "basket" for 30 years.  At the end of the day, some folks did well in the market over the long haul, and some not so well.

WHO didn't do well over the long haul??  Examples please.  Someone show us how precarious and potentially detrimental it would be to leave SOME (read NOT ALL) of one's SS in selected mutual options within the stock market, over an extended period of time

That is the whole point of SS, supposedly.  It's not meant to be a retirement, but it's being used as one, by far too many.  It IS going to go bankrupt at its current pace, sooner vs later.  And if one were to leave an equivalent amount of $$ in the stock market, over the same period they do in SS,.....well, as I inquired, show us how terribly disastrous that would be.  I used 30+years, but the question should be more like 50+

So, show us
« Last Edit: January 22, 2008, 03:50:14 PM by sirs »
"The worst form of inequality is to try to make unequal things equal." -- Aristotle

Michael Tee

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Re: Serious SS question
« Reply #5 on: January 22, 2008, 04:02:22 PM »
Sorry, I can't name names.  I know a lot of people who are willing to talk openly and frankly about their successes in real estate.  These include people who landed here as immigrants with Grade 3 educations, worked as labourers and wound up rich.

I know a few people - - very few - -  who are willing to talk about their stock market investments.  All of them are very successful investors.   All are highly educated professionals - - usually accountants; one a lawyer who started his professional life as an accountant.  One is a banker, one a mining engineer.

Most people don't like to talk about their losses, either in real estate or in the market.  I concluded on the basis of people I know, that there are a lot more successful real estate investors than there are successful stock market investors.  As to how many of my friends and acquaintances are stock market losers and how many are real estate market losers, I have no idea. 

Sorry I can't make it more scientific, but that is about all the information that I have.  It tells ME something that I think is relevant to the question you were asking, but I think it's a message you don't want to hear.  Well, I am just offering up my two cents' worth - - take it or leave it  for what it's worth.
« Last Edit: January 22, 2008, 04:03:58 PM by Michael Tee »

sirs

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Re: Serious SS question
« Reply #6 on: January 22, 2008, 04:14:58 PM »
Sorry, I can't name names.  

Didn't think so.  So again, all the left has then is to demonize the stock market, distort Bush's actual plans for trying to save SS, and misrepresent the idea of leaving $$ in the market for an extended period of time, equivalent to what SS mandates, using the occasional stock market drops as some smoking gun of how terrible an idea it is for following up on some form of SS reform that includes the stock market. 

"The worst form of inequality is to try to make unequal things equal." -- Aristotle

Michael Tee

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Re: Serious SS question
« Reply #7 on: January 22, 2008, 04:34:25 PM »
You're nuts.  All I did was answer your question.  I don't know a lot of people who did well in the stock market and those who did were highly educated professionals.  I know lots of people who made money in real estate, and these include uneducated immigrants with nothing more than a Grade Three education.  Draw your own conclusions, sirs.

<<So again, all the left has then is to demonize the stock market, distort Bush's actual plans for trying to save SS, and misrepresent the idea of leaving $$ in the market for an extended period of time, equivalent to what SS mandates, using the occasional stock market drops as some smoking gun of how terrible an idea it is for following up on some form of SS reform that includes the stock market. >>

I didn't do any of that.  You're really crazy.  It's actually quite amazing how you can take a simple and rather bare-bones answer to a simple question, read whatever you want into it and then when you finish re-crafting it, denounce it as a Commie plot against Bush. 

Anyway, I stand by my answer.  It's the plain truth.  It's what I know from MY life (and maybe someone else knows the exact opposite from his or her own life, and if so, I'd like to hear)  and I drew some conclusions from it, mainly that most ordinary folks are not wise investors in the market.    Sorry 'bout that, but don't shoot the messenger.

Xavier_Onassis

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Re: Serious SS question
« Reply #8 on: January 22, 2008, 05:12:37 PM »
All you want is someone to confirm that you actually know what your talking about, and admit that a retirement fund and an investment are the same thing, which they aren't, and that everyone would be better off investing in Wall Street than investing the same amount in SS.

But your first premise is wrong, and so is the second.

Juniorbush agrees with you, but he doesn't really worry about retirement. His momma's brother was president of Payne, Webber, and his poppa is making a killing with Carlisle's investment in weapons for his war, and last but not least, he's getting a HUGE juicy government pension.

I consider SS and my investments BOTH to be imp[ortant and irreplaceable parts of my retirement plan.

You already know YOUR answers to this question, but apparently have not managed to convince yourself  of the correctness of your reply, so here you are bugging us. What did we ever do to deserve you and your snideness?
« Last Edit: January 22, 2008, 05:14:57 PM by Xavier_Onassis »
"Time flies like an arrow; fruit flies like a banana."

Michael Tee

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Re: Serious SS question
« Reply #9 on: January 22, 2008, 05:38:10 PM »
<< . . . and that everyone would be better off investing in Wall Street than investing the same amount in SS.>>

I think what sirs was actually saying was that some would invest wisely for their retirement and some would not, so that when retirement finally arrived, the wise would be rewarded for their skill or luck or whatever it was and the unwise would not, which is more or less the way things should be.

What would really happen if Wall Street were allowed to hold part of the funds that would otherwise be destined for SS?

From what I've seen of the average Joe's skill or luck in playing the market, I think it's a fairly safe bet that:
   1.  a fairly small number of retirees will have done spectacularly better than SS could have done for them and will have a very nice retirement as a result;
   2.  another fairly small number of retirees will have managed somehow to have done about as well as SS would have done in managing their retirement contributions;
   3.  all the rest, a large and clear majority, will have done worse than SS would have done for them, on a spectrum ranging all the way from marginally worse to "lost it all" worse, and
   4.  Wall Street and anyone connected to it will have made an unprecedented killing on all  of them, the wise investors, the dumb schmucks, the lucky stiffs and the unlucky schlimazels.  Most of that generation's wealth parked on Wall Street will be gone, into the pockets of smarter traders and the Street itself.  Considerable portions of the "lost" funds will find their way into the pockets of the Bush and Cheney families and their friends.  It'll be a real bonanza for them.

Xavier_Onassis

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Re: Serious SS question
« Reply #10 on: January 22, 2008, 06:42:34 PM »
Sirs would seem to appreciate a world in which some unwise people were left with absof*ckinglutely nada, because he could look down upon them and fee spectacularly superior. But there is also the possibility that Sirs might be one of the unclever who is left with very little himself. He, of course, would not allow that this could be possible, but that does not mean that it is impossible. Smart people do dumb things, even though stupid people do them more often.

If you put your money away for 30 years and in the 25th year you feel drawn to put in ventures like Enron, (or better yet: gold mining shares) then in the 26th year, you will have doodly, and the 25 years you were counting on for your money to grow cannot be relived, so you're screwed. If you had SS, you would at least not starve, and not have to endure clowns like sirs staring down at you and clucking their tongues at your unwisdom as you do so.
« Last Edit: January 22, 2008, 06:58:26 PM by Xavier_Onassis »
"Time flies like an arrow; fruit flies like a banana."

_JS

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Re: Serious SS question
« Reply #11 on: January 22, 2008, 06:56:03 PM »
The question is unanswerable Sirs, because "stock market" is such an ambiguous term.

If you want to know who has failed in the market, look no further than those who put their retirement accounts into profit sharing programs in World Com or Enron for recent examples. If you want names, there are plenty out there who got royally screwed by Arthur Andersen, which is why we now have SOX accounting standards (or more specifically, controls).

So you better believe you can lose money.

The purpose of social security is not to invest in private markets, but to have security for older folks whether or not the market fails. Privatization would be a huge for Wall Street brokers, hedge fund managers, and other administrators who would make fortunes in fees and commissions, but that isn't the purpose of the Social Security System either.

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Xavier_Onassis

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Re: Serious SS question
« Reply #12 on: January 22, 2008, 11:56:22 PM »
I'm thinking that this is pretty much all that has to be said regarding this topic.
"Time flies like an arrow; fruit flies like a banana."

sirs

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Re: Serious SS question
« Reply #13 on: January 23, 2008, 12:04:24 AM »
I'm thinking that this is pretty much all that has to be said regarding this topic.

Agreed.  You & Tee's (& Js's) inability to deal with the crux of the query, helped make the point as clear as could be.  Again, I thank you
"The worst form of inequality is to try to make unequal things equal." -- Aristotle

Plane

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Re: Serious SS question
« Reply #14 on: January 23, 2008, 12:24:32 AM »
I have a Retirement account in the TSP. It is simular to a 401-k .

http://www.tsp.gov/

If I die my heirs get it.
When I divorced my ex got a share.
When I need a loan I can tap this fund to finance myself , paying back with intrest to myself.

If I choose to ignore it 1% of my pay is given to it whther I like it or not.

If I like , as much as 15% can be given.

The employer matches the first 3% dollar for dollar the next two percent at 50 cents on the dollar , If I give 5% I get 10.

I cannot avoid that the 1% mandated part will be invested in the G fund , a boring T-bond based fund that never looses money nor ever makes more than 6%. The rest I can direct to be invested in the C fund  the I fund the S fund or the F fund. I can swap from one fund to another as often as I please but it doesn't realy help to churn it often , I am glad that I have a bit of it in the I fund which was the winner last year and the two years before , the I fund is the index of foreign investments.

http://www.tsp.gov/rates/index.html




Each of these is an indexed fund , a largely diversifed basket from the first dollar. It is really hard to go totally wrong.


All federal employees can participate , should a system like this be avilible to anyone elese ?