Defined Contribution Plans

[lakedaemonian]

Re: Defined Contribution Plans

I would suggest a book http://www.amazon.com/Millionaire-Ne.../dp/0671015206

I know many who live below their means. My son lives far below his means as does my daughter and I know of others. I do not live as much below my means as I once did. I am getting older and decided that we love to travel so we do since one day we may not be able to.

I also highly recommend Thomas Stanley's books as well.

I picked it up just as the dot com craziness took off and folks thought the basic rules of financial gravity and physics no longer applied.

I credit Stanley with opening my eyes almost as much as EJ.

To me his book(now including several others) is like a consumer cult deprogramming guide.

[DSpencer]

Re: Defined Contribution Plans

The problem with this anecdote is that you're ascribing the behavior of some number of friends you have - who evidently don't work hard but have parents of some degree of wealth - to the behavior of all those who have parents of some degree of wealth.

If this were true, then the demographic statistics for wealth as a factor of parental wealth would be different than they are. And I would further note: having a wealthy parent is not a guarantee of personal wealth, nor even a majority factor.

My point was that I witnessed all 4 combinations: people with loans that: worked hard/made good choices and those who didn't and people with free rides that worked hard/made good choices and those that didn't. I see the hard work/good choices as playing a much bigger role in their wealth than the wealth of their parents.

Yes I realize it's anecdotal, that's why I mentioned specifically why I was sharing it. Because...

the simple fact of parental wealth is a greater predictor than anything else.

Statistics are not perfect. Personally, I don't believe that the role of motivation and responsible choices can be accurately modeled through statistics. So maybe parental wealth is a greater predictor than other more easily measurable things such as education level, but I don't see how the same comparisons can be made with more intangible aspects.

Just because someone creates a chart or a study that purports to prove statistically that something is true...doesn't mean it is. This is especially true when the entity creating the study has a specific agenda. It's also especially true when trying to measure things that are inherently difficult or impossible to measure.

[c1ue]

Re: Defined Contribution Plans

So maybe parental wealth is a greater predictor than other more easily measurable things such as education level, but I don't see how the same comparisons can be made with more intangible aspects.

The implicit assumption being made in this statement is that the intangible aspects are somehow distributed unevenly. That the 'hard working' types are a subset of the population and thus gain more because of their unusual work ethic.

How do you know this is true? And why does this matter?

From my own perspective, I've seen many people who work smart but not necessarily 'hard' in the typical sense.

Who am I to judge a person's work ethic - each person's job and the market do it just fine.

And that is perfectly measurable.

So while I am in complete agreement that statistics are not perfect, at the same time it is necessary to attack specific failures of statistics with data - not anecdote or belief.