Homeless Lose a Longtime Last Resort: Living in a Car(online.wsj.com)
online.wsj.com
Homeless Lose a Longtime Last Resort: Living in a Car
http://online.wsj.com/news/articles/SB10001424052702303847804579479930243974564?mg=reno64-wsj
16 comments
Selective enforcement can be a big problem in lots of areas, especially anywhere where race or class come into play.
The flipside is that if people gradually move into parking overnight in industrial areas, and nobody there cares, then homeowners are happy and people saying in their vehicles still have a (perhaps less convenient) place to go. Yet trying to get a rule passed explicitly allowing that in areas zoned industrial would be a lot harder than a rule that sort of evolves on its own.
The flipside is that if people gradually move into parking overnight in industrial areas, and nobody there cares, then homeowners are happy and people saying in their vehicles still have a (perhaps less convenient) place to go. Yet trying to get a rule passed explicitly allowing that in areas zoned industrial would be a lot harder than a rule that sort of evolves on its own.
There are a lot of restrictions on what you can do that only make sense to enforce when you are actually harming someone else. This is just one example of that principle.
While I agree with you, I think it is also a matter of what the police force spends its resources on. There are so many stupid laws that could be enforced, but probably shouldn't. I'd rather the officers ignore the homeless for the most part and spend their efforts responding to 'real crime'. But yes... this definitely could be abused by any one corrupt officer.
If they are stupid but shouldn't be enforced, the place to fix is to have the law removed IMHO. Police judgement shouldn't be the solution to bad laws. It's a band-aid that can cause serious long term damage I think.
It's only an invitation for police harassment if you're breaking the law. And in your version, you would instead have been arrested / fined immediately regardless of anyone reporting you.
The bottom line for selective enforcement is that the police recognize that there is a priority structure in laws. They have limited resources and cannot enforce every law, everywhere, every time. While I would rather see this law unmade, the second best thing that can happen is exactly what is, which is the police only getting involved if an actual legitimate issue is raised.
EDIT: A second pertinent example is noise ordinance, which this is similar to as a "public nuisance" law. The law is not worded that it's OK as long as all your neighbors are OK with it. In your world, police would be walking around neighborhoods with a decibel meter and fining every non-compliant house, regardless of whether you cleared everything with your neighbors, or even if your neighbors are the ones making all the noise at your party!
The bottom line for selective enforcement is that the police recognize that there is a priority structure in laws. They have limited resources and cannot enforce every law, everywhere, every time. While I would rather see this law unmade, the second best thing that can happen is exactly what is, which is the police only getting involved if an actual legitimate issue is raised.
EDIT: A second pertinent example is noise ordinance, which this is similar to as a "public nuisance" law. The law is not worded that it's OK as long as all your neighbors are OK with it. In your world, police would be walking around neighborhoods with a decibel meter and fining every non-compliant house, regardless of whether you cleared everything with your neighbors, or even if your neighbors are the ones making all the noise at your party!
I see this a closer to something like prostitution laws that are selectively enforced in many countries and lead to large scale police corruption/harassment.
Random rant: my limited experience of police treatment of homeless people in San Francisco leaves quite a lot to be desired. I've spent about one month in total there and I saw police hassling homeless people quite frequently. Anything that makes that easier is bad in my mind. Sure - poor people are an "irritation" by some definitions but they remain people even if their existence is inconvenient to some.
Random rant: my limited experience of police treatment of homeless people in San Francisco leaves quite a lot to be desired. I've spent about one month in total there and I saw police hassling homeless people quite frequently. Anything that makes that easier is bad in my mind. Sure - poor people are an "irritation" by some definitions but they remain people even if their existence is inconvenient to some.
I agree with your principle whole-heartedly; I was just pointing out that I feel that police harassment is an orthogonal concern, and that selective enforcement is a Good Thing in the vast majority of cases -- ie, all the ones you never hear nor think about.
> It's only an invitation for police harassment if you're breaking the law.
Edit: it is often more of an invitation, however, if you are a minority or poor.
Edit: it is often more of an invitation, however, if you are a minority or poor.
If they are going to harass you when you're not breaking the law, then the law itself has nothing to do with it. They could equally harass you for any number of things which no one would argue should be criminal. Making a statement about police harassment and abuse of power is fine, but the topic at hand has little to do with that.
I suppose my point is that, when a law is selectively enforced, minorities and the poor are the ones who tend to get "selected," which I do think is relevant to selectively enforced laws - they are often enforced in a discriminatory manner.
Edit: I clearly did not explain this with the post above, which upon re-reading makes little to no sense in context here.
Edit: I clearly did not explain this with the post above, which upon re-reading makes little to no sense in context here.
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I hate to be that guy, and I'm going to sound like an ass, but this is 100% his doing. Software worker in Palo Alto for 30 years making as much as 150k has no excuse. Save some money stupid. Also, when you get fired and can't find another job, perhaps you should move out of your $2150 a month rental. That's enough for 4-5 months or more in other places. $1700 a month SS isn't much, but it's enough to not be homeless in other places in America. It's not enough to live in Palo Alto. MOVE.
All that being said, I'm not sure what the point of making criminals out of homeless people is. No reason to kick people when they are down.
All that being said, I'm not sure what the point of making criminals out of homeless people is. No reason to kick people when they are down.
Perhaps you're right in his particular instance.
But the issue is the same even for those who end up homeless through no fault of their own.
Moving for the homeless has many hidden costs, including the time and effort required to rebuild the local network of support one has built over many years.
But the issue is the same even for those who end up homeless through no fault of their own.
Moving for the homeless has many hidden costs, including the time and effort required to rebuild the local network of support one has built over many years.
Also, in my experience, moving is expensive. At least if you want to take more stuff than fits into a suitcase.
Another thing that bugs me about the moving advice is this: It is good advice for an individual or a family, but it becomes extremely problematic if too many people do it. Many of the places where living expenses are low are also places were the public finances at the local level are in a catastrophic state. "Unemployment tourism" can be the deathblow for the municipal level if, as is the case in many places here in Europe, the municipal level has to finance much of the social infrastructure.
Another thing that bugs me about the moving advice is this: It is good advice for an individual or a family, but it becomes extremely problematic if too many people do it. Many of the places where living expenses are low are also places were the public finances at the local level are in a catastrophic state. "Unemployment tourism" can be the deathblow for the municipal level if, as is the case in many places here in Europe, the municipal level has to finance much of the social infrastructure.
> It's not enough to live in Palo Alto. MOVE.
"He was laid off [...] The next year, his wife died at age 55. [...] He turned down an offer from his brother to move to Illinois. He wants to stay in Palo Alto, he says, because it has been his home for so long and because he feels safe here. [...] He said he stayed in Palo Alto in large part because of the memories of his late wife."
I agree with you. But... humans don't act rationally. I can imagine how heartbreaking it would be to have to move away from where I spent an entire life with my wife while coping with the loss, even if it would absolutely be the right thing to do financially.
"He was laid off [...] The next year, his wife died at age 55. [...] He turned down an offer from his brother to move to Illinois. He wants to stay in Palo Alto, he says, because it has been his home for so long and because he feels safe here. [...] He said he stayed in Palo Alto in large part because of the memories of his late wife."
I agree with you. But... humans don't act rationally. I can imagine how heartbreaking it would be to have to move away from where I spent an entire life with my wife while coping with the loss, even if it would absolutely be the right thing to do financially.
I can understand the sentiment, but I think it would be more heartbreaking to be homeless...
Have you ever read stories in the newspaper of old people who keep their deceased spouse's corpse at home for weeks or even months?
Humans do weird things when grieving. If there is no one (adult children, siblings, close friends, etc.) to help them go through the grieving process, things can get weird real fast.
Humans do weird things when grieving. If there is no one (adult children, siblings, close friends, etc.) to help them go through the grieving process, things can get weird real fast.
No, go ahead and be that guy. 30 years in SV and you're still living paycheck to paycheck? And guess what? I can't afford to live in Palo Alto, either, and I'm employed with a high-paying tech job.
But what really bothers me is that he's the poster child in this story. He's easy to ignore. "Should have saved more...", "he should move...", it's all his fault. But what about the folks for whom it's _not_ all their fault?
But what really bothers me is that he's the poster child in this story. He's easy to ignore. "Should have saved more...", "he should move...", it's all his fault. But what about the folks for whom it's _not_ all their fault?
Yeah, and that's what really makes this not a great article, and it's why I added the last point to my comment. The article starts off as if we're going to talk about this great injustice and then uses an anecdote that says this guy is an idiot who made poor life decisions.
Agreed on both points. Kicking him out seems kind of harsh since it has been his home for decades, but is there a real solution? He can't afford to live there anymore.
There are tons of LTVA (Long term visitor areas) in southern CA and AZ that he can spend months in his RV for under $200.
There are tons of LTVA (Long term visitor areas) in southern CA and AZ that he can spend months in his RV for under $200.
The article specifically picked someone whose problems were clearly his own making and avoidable. I'm going to guess that the majority of people that will be affected by this new law didn't have successful careers in software development.
Of course, we all have some responsibility for our fate, some perhaps more than others, but this is a societal issue not just an individual issue. I suspect that we will be seeing more and more stories like this in the coming years, with increasing numbers of people hitting retirement age without pensions, after a severe recession, and with an increasingly mobile and dynamic workforce, which generally inhibits saving for retirement.
> "All that being said, I'm not sure what the point of making criminals out of homeless people is. No reason to kick people when they are down."
I agree with this point that you said. The rest I think is pretty unfair; we know very little about this guys' life and how he spent his money (or the reasons he spent his money the way he did - "no excuse" I think is a false statement). The fact is, there are people who aren't making anywhere near $150,000 annual and these people will inevitably run into the same problems this man is facing (outside of Palo Alto - wherever you prefer). Ultimately, he did move out of his $2,150/mo rental, anyhow.
I agree with this point that you said. The rest I think is pretty unfair; we know very little about this guys' life and how he spent his money (or the reasons he spent his money the way he did - "no excuse" I think is a false statement). The fact is, there are people who aren't making anywhere near $150,000 annual and these people will inevitably run into the same problems this man is facing (outside of Palo Alto - wherever you prefer). Ultimately, he did move out of his $2,150/mo rental, anyhow.
Perhaps it is slightly unfair, but I think they are reasonable assumptions based on the information given.
1. Worked in tech for 30 years (which implies pretty good salary) along with actual number of 150k for at least some of those years.
2. We have a first-hand account from his step-son that says he was really bad with his money.
3. Then we have irrational behavior staying in a place that he most definitely can't afford and choosing to be homeless in expensive area instead of not homeless in more reasonable area based on his SS income.
> The fact is, there are people who aren't making anywhere near $150,000 annual and these people will inevitably run into the same problems this man is facing
Yes, people who don't make a lot of money will have more problems than someone who does make a lot of money. That's why I said kicking them while they are down doesn't make sense. That doesn't mean that the guy who made a lot of money and pissed it away isn't responsible for his current situation.
1. Worked in tech for 30 years (which implies pretty good salary) along with actual number of 150k for at least some of those years.
2. We have a first-hand account from his step-son that says he was really bad with his money.
3. Then we have irrational behavior staying in a place that he most definitely can't afford and choosing to be homeless in expensive area instead of not homeless in more reasonable area based on his SS income.
> The fact is, there are people who aren't making anywhere near $150,000 annual and these people will inevitably run into the same problems this man is facing
Yes, people who don't make a lot of money will have more problems than someone who does make a lot of money. That's why I said kicking them while they are down doesn't make sense. That doesn't mean that the guy who made a lot of money and pissed it away isn't responsible for his current situation.
Kicking them when they are down definitely doesn't make sense and I still agree with you there.
All I am saying is that those 3 points you listed here really do little to paint a lifetime of 70 years. I am certain you'd have little trouble imagining legitimate scenarios where someone could lose their fortune (hence why I don't buy the "no excuse" statement). #3 isn't irrational; the article indicated that the man worked in Palo Alto for a good portion of his life, where significant life events, such as his family-making, career, and death of his wife all occurred. It is not irrational to want to stay at a place you are emotionally attached to. It would be reasonable to conjecture that he has a social network there, vs. any other random place in the US.
Also, on point #2, his stepson and he are estranged, communicating only through Facebook on occasion so I am not certain that it is as relevant as you believe it to be.
I ask you would 3 facts about your life sufficiently portray the person you believe yourself to be? Would it explain in any detail why you are the person you are today?
The reason I am focusing on this point is because I believe the bias we all (myself included) have against other people in different circumstances including (but not limited to) homelessness, comes from this perspective of assuming we know far too much about the individual in question.
All I am saying is that those 3 points you listed here really do little to paint a lifetime of 70 years. I am certain you'd have little trouble imagining legitimate scenarios where someone could lose their fortune (hence why I don't buy the "no excuse" statement). #3 isn't irrational; the article indicated that the man worked in Palo Alto for a good portion of his life, where significant life events, such as his family-making, career, and death of his wife all occurred. It is not irrational to want to stay at a place you are emotionally attached to. It would be reasonable to conjecture that he has a social network there, vs. any other random place in the US.
Also, on point #2, his stepson and he are estranged, communicating only through Facebook on occasion so I am not certain that it is as relevant as you believe it to be.
I ask you would 3 facts about your life sufficiently portray the person you believe yourself to be? Would it explain in any detail why you are the person you are today?
The reason I am focusing on this point is because I believe the bias we all (myself included) have against other people in different circumstances including (but not limited to) homelessness, comes from this perspective of assuming we know far too much about the individual in question.
It's very unfortunate, but the main character also an interesting study in skill set relevance and retirement planning (or lack thereof).
He's a software engineer in SV... By all the common stereotypes, he should be in the winner circle and living the life. Agism is definitely an issue in tech, but it's likely that he is not up to date with some of the more modern languages or techniques, resulting in lack of employment.
If he lived there since the 70's, he could have had a paid off place. (Typical mortgage is 30 years term.) If not save by paying off the mortgage, he could have also saved via 401k or something similar. It probably never really occurred to him that employment might be so hard to come by or that things would get so pricey. Coming from an eastern european background, I was conditioned that if you have a paid off place, you can withstand a lot of up and down swings in the economy and the world.
As a society, we should really be focusing on helping people properly market themselves and acquire/update skills needed AND re-enforcing the need to plan for the future. Not really sure how we'd go about implementing the latter without annoying people though...
He's a software engineer in SV... By all the common stereotypes, he should be in the winner circle and living the life. Agism is definitely an issue in tech, but it's likely that he is not up to date with some of the more modern languages or techniques, resulting in lack of employment.
If he lived there since the 70's, he could have had a paid off place. (Typical mortgage is 30 years term.) If not save by paying off the mortgage, he could have also saved via 401k or something similar. It probably never really occurred to him that employment might be so hard to come by or that things would get so pricey. Coming from an eastern european background, I was conditioned that if you have a paid off place, you can withstand a lot of up and down swings in the economy and the world.
As a society, we should really be focusing on helping people properly market themselves and acquire/update skills needed AND re-enforcing the need to plan for the future. Not really sure how we'd go about implementing the latter without annoying people though...
> Agism is definitely an issue in tech, but it's likely that he is not up to date with some of the more modern languages or techniques
Why do you suspect that he is likely not up date? The first part of your sentence mentions ageism, although the second part sounds a lot like it.
Why do you suspect that he is likely not up date? The first part of your sentence mentions ageism, although the second part sounds a lot like it.
Well if Palo Alto is willing to spend $250,000 they could pave a bit of parking lot and put in a bathroom/shower unit like exists in campgrounds. But that seems a bit extreme.
The guy profiled was tech worker for 30 years, but allegedly "not good with money." If you're in your 20's don't be that guy. Live within your means, save for those future days.
The guy profiled was tech worker for 30 years, but allegedly "not good with money." If you're in your 20's don't be that guy. Live within your means, save for those future days.
This guy is popular. http://www.mrmoneymustache.com/
Basically, spend as little money as possible until your dead. It's surprisingly good advice.
Basically, spend as little money as possible until your dead. It's surprisingly good advice.
Stated a little more neutrally: give at least some care what you spend money on in the context of what you're making and what resources you want to have left when you stop working.
> give at least some care what you spend money on in the context of what you're making
Why would the amount you spend be framed in the context of what you're making?
You're just setting yourself up to spend more as you earn more, which is the exact opposite of what MMM is all about.
Remember, The goldfish fills the bowl.
Why would the amount you spend be framed in the context of what you're making?
You're just setting yourself up to spend more as you earn more, which is the exact opposite of what MMM is all about.
Remember, The goldfish fills the bowl.
Until you're dead? Why? What sense does it make to have a lot of money saved once you're dead?
Because most people really, truly, honestly don't need the shit they think they need; they just "want" stuff more than they "need" it. Adopting this mindset helps you have cushion for catastrophic problems if/when they arise.
And typically the number one thing that negatively affects a person's financial situation is the state of the national/global economy, that is, something entirely outside their immediate control. Thus having a nice cushion for something outside your control is a pretty good idea.
Watch Robert Shiller's OpenYale courses. They're amazing. Particularly the last one* in which he mentions that, to reiterate, that most financial problems most people face are economic circumstances completely outside of their control. The causes of which are financial institutions inability to properly deal with risks which then causes massive economic inequality that we see today and which is growing larger more so today than it ever has in history.
*http://www.youtube.com/watch?v=2_pDTWgJg94&index=24&list=PL8...
And typically the number one thing that negatively affects a person's financial situation is the state of the national/global economy, that is, something entirely outside their immediate control. Thus having a nice cushion for something outside your control is a pretty good idea.
Watch Robert Shiller's OpenYale courses. They're amazing. Particularly the last one* in which he mentions that, to reiterate, that most financial problems most people face are economic circumstances completely outside of their control. The causes of which are financial institutions inability to properly deal with risks which then causes massive economic inequality that we see today and which is growing larger more so today than it ever has in history.
*http://www.youtube.com/watch?v=2_pDTWgJg94&index=24&list=PL8...
As a 20-something, does anyone have any advice me for or know of resources where I can learn about financial management?
My advice:
* Save at least 10% of your income. "At least," because you want both long-term/retirement savings, and a "rainy day" fund for unexpected expenses. * Minimize your debt. If you have lots of debt, prioritize paying it down. * If you aren't good at the first two items, create a budget, and stick to it.
Also, if you want professional advice, ask around and find a good financial adviser, particularly if you are looking for an investment strategy for long-term savings.
* Save at least 10% of your income. "At least," because you want both long-term/retirement savings, and a "rainy day" fund for unexpected expenses. * Minimize your debt. If you have lots of debt, prioritize paying it down. * If you aren't good at the first two items, create a budget, and stick to it.
Also, if you want professional advice, ask around and find a good financial adviser, particularly if you are looking for an investment strategy for long-term savings.
As someone else pointed out, http://www.mrmoneymustache.com/ is popular although arguably extreme.
This is also a good general post by someone who now writes about business for Bloomberg http://www.theatlantic.com/business/archive/2011/03/10-quick...
At the big picture level though, it's mostly about living within your income and putting some money away on a regular basis. (Someone else mentioned at least 10%.) At some level, everything else is keyhole optimization assuming some sane diversification of savings--don't put it in Bitcoin or all in your company's stock. It's useful to get other things right but they're much less important in the big picture than outflow < ~.9 * inflow (after tax).
This is also a good general post by someone who now writes about business for Bloomberg http://www.theatlantic.com/business/archive/2011/03/10-quick...
At the big picture level though, it's mostly about living within your income and putting some money away on a regular basis. (Someone else mentioned at least 10%.) At some level, everything else is keyhole optimization assuming some sane diversification of savings--don't put it in Bitcoin or all in your company's stock. It's useful to get other things right but they're much less important in the big picture than outflow < ~.9 * inflow (after tax).
To start simple, make sure you don't spend more than you earn (excluding exceptional circumstances). A simple table, GNU cash or even pen + paper are enough for that: record every transaction you make, no matter what tools you use, as long as it's reasonably low-friction.
I used a simple table with columns date, account, value, purpose. "account" helps getting a sum total for each bank account and for cash, to check how my table compares with reality (ie. bank statements and the content of my wallet).
Simply by tracking money flow you already learn a lot about your habits, while collecting data that helps you optimize it if necessary. I also found that making spending a conscious matter like that already reduced impulse buys.
After that, the other ideas are good ones - and you'll know if they're achievable for you and how.
I used a simple table with columns date, account, value, purpose. "account" helps getting a sum total for each bank account and for cash, to check how my table compares with reality (ie. bank statements and the content of my wallet).
Simply by tracking money flow you already learn a lot about your habits, while collecting data that helps you optimize it if necessary. I also found that making spending a conscious matter like that already reduced impulse buys.
After that, the other ideas are good ones - and you'll know if they're achievable for you and how.
Specific advice:
1) Housing tends to be the biggest expense. So try to share an apartment with flat mates until you're sick of it, or even stay at your parents place for a few years (if that's possible).
2) If you need a car, buy a used one in good condition and keep it that way for many years. Make sure you change the oil and filters at recommended intervals.
3) If you like to travel, learn to do it cheaply! Long and wonderful trips in south-america or asia can easily be had for 1000$-2000$ a month - sleep in hostels, eat what the locals eat, don't drive/fly around to much, travel slowly. :-)
4) Learn to cook.
5) Learn to make and fix basic things around the house: installing fixtures, plumbing, wall painting, furniture (fixing and making), etc. Doing things yourself is more satisfying and saves money.
1) Housing tends to be the biggest expense. So try to share an apartment with flat mates until you're sick of it, or even stay at your parents place for a few years (if that's possible).
2) If you need a car, buy a used one in good condition and keep it that way for many years. Make sure you change the oil and filters at recommended intervals.
3) If you like to travel, learn to do it cheaply! Long and wonderful trips in south-america or asia can easily be had for 1000$-2000$ a month - sleep in hostels, eat what the locals eat, don't drive/fly around to much, travel slowly. :-)
4) Learn to cook.
5) Learn to make and fix basic things around the house: installing fixtures, plumbing, wall painting, furniture (fixing and making), etc. Doing things yourself is more satisfying and saves money.
All good advice in the peer comments, when I was in my 20's I was putting the maximum I could in a 401k (pre-tax), and putting 10% of my salary into the employee stock purchase program. Before we had kids my wife was putting most of her salary into savings for a down payment on a house. Unlike many of my peers I was bringing my sandwich in for lunch (still do that). I tend to own cars for 5+ years, I don't take annual vacations to places I have to fly to (hiking and camping is pretty inexpensive and easy to do in California) and generally I always try to keep my monthlies (phone, power, tv, internet) under control. Every month payed off the credit card (used for book keeping more than credit) and cook food rather than buy pre-prepared food.
All designed to keep my 'burn rate' low.
All designed to keep my 'burn rate' low.
I don't know about links, but the basics are simple enough: track what you spend and save some % of what you make. Avoid debt for things that lose value (e.g. cars). Debt for things like houses that retain value can make sense, though. Always keep money in reserve. Pay off the high-interest debt (e.g. 30% APR credit cards) first. If you do buy any complex investments, keep in mind what conditions cause gain or loss. For example, I recently saw an annuity/ETF product where they let you invest in indexes and cover the first 10% of any losses, but you gain at most 10% annually (they get the rest). It took me a while to realize that this means you get a 10% upside and 90% downside.
I'm sure others can give you more common sense advice.
I'm sure others can give you more common sense advice.
> Avoid debt for things that lose value (e.g. cars).
This is actually not terribly good advice. Debt does not become especially bad depending on whether what you used it for is gaining or losing value.
This rule is really a proxy for, "Don't buy an expensive car, boat, or plane, relative to what you are making." Now that is a good rule. There's no reason to hide it behind a false rule. Financing a purchase that you could pay cash for can sometimes be wise, even if the purchased item is losing value.
This is actually not terribly good advice. Debt does not become especially bad depending on whether what you used it for is gaining or losing value.
This rule is really a proxy for, "Don't buy an expensive car, boat, or plane, relative to what you are making." Now that is a good rule. There's no reason to hide it behind a false rule. Financing a purchase that you could pay cash for can sometimes be wise, even if the purchased item is losing value.
If you fall on hard times, you can sell things. If you have to sell something like a car that lost value, it won't be as good as being able to sell something like a house that holds value.
Have a look here http://www.bogleheads.org/wiki/Getting_started
Don't spend >30% of your gross income on housing.
Debt is evil. Unless you can get a higher rate of return than the interest rate of your debt, pay off the debt as soon as possible.
Have at least 6 months of expenses in an easily accessible, liquid place like a bank account. Once you've got that rainy-day fund in place, plow the rest (at least 10% of income, 20% is probably a better target) into investments and take any tax advantages possible:
Traditional IRA + Roth IRA ($5500 combined max/year)
Traditional IRA contribution is tax deductible if you aren't covered by a work retirement plan or if you're under a certain earning threshold.
Take advantage of 401(k) if your employer offers it, contribute at least enough to get any matching they offer. These are pre-tax dollars, but some plans have shitty investment options, so YMMV. $17,500 max/year.
Put the rest in an individual brokerage account and invest regularly (monthly or quarterly) in low-cost, broad-market index funds or ETFs like VTI, VOO, or QQQ.
The rest is your fun money...you're young, so make sure you're also investing in yourself by going on trips, having fun experiences, etc, just keep the future in mind and don't go TOO crazy!
Debt is evil. Unless you can get a higher rate of return than the interest rate of your debt, pay off the debt as soon as possible.
Have at least 6 months of expenses in an easily accessible, liquid place like a bank account. Once you've got that rainy-day fund in place, plow the rest (at least 10% of income, 20% is probably a better target) into investments and take any tax advantages possible:
Traditional IRA + Roth IRA ($5500 combined max/year)
Traditional IRA contribution is tax deductible if you aren't covered by a work retirement plan or if you're under a certain earning threshold.
Take advantage of 401(k) if your employer offers it, contribute at least enough to get any matching they offer. These are pre-tax dollars, but some plans have shitty investment options, so YMMV. $17,500 max/year.
Put the rest in an individual brokerage account and invest regularly (monthly or quarterly) in low-cost, broad-market index funds or ETFs like VTI, VOO, or QQQ.
The rest is your fun money...you're young, so make sure you're also investing in yourself by going on trips, having fun experiences, etc, just keep the future in mind and don't go TOO crazy!
This seems somewhat helpful:
esplanner.com
It's, among other things, a consumption smoothing modeler (i.e. make sure that you don't oversave or overspend). It will tell you about how much you need to be saving each year, given a bunch of variables like how much you make, how much you plan to make, etc.
esplanner.com
It's, among other things, a consumption smoothing modeler (i.e. make sure that you don't oversave or overspend). It will tell you about how much you need to be saving each year, given a bunch of variables like how much you make, how much you plan to make, etc.
If you work as a programer or similar, your salary will probably increase significantly over the next 10-20 years. Your spendings will increase over time as well.
If you are not crushed by debt, just try to make your spendings increase much slower than your pay.
If you are not crushed by debt, just try to make your spendings increase much slower than your pay.
I was thinking the same thing. While exorbitant rents are definitely a huge problem, a tech worker in SV should be able to save for retirement over 30 years if they have good financial habits.
From the article, it sounds like he didn't have good financial habits.
Seems to be largely a means of pushing the problem elsewhere.
"Um, could you please be poor some place else? This is Palo Alto - we have a prosperous reputation to uphold."
"Um, could you please be poor some place else? This is Palo Alto - we have a prosperous reputation to uphold."
It is, but that's nothing new. The cops in NYC have been known to give the homeless a McDonalds meal and a bus ticket up the coast.
I'm curious what the prevalence of work-from-home software jobs will do, over time, to the ridiculous swell in cost-of-everything in the bay area though. I realize that, like Manhattan for finance, there's some status associated with being in tech in the bay area, as well as legitimate opportunities. But there are high-paying tech jobs in places where you can live much more comfortably.
I'm curious what the prevalence of work-from-home software jobs will do, over time, to the ridiculous swell in cost-of-everything in the bay area though. I realize that, like Manhattan for finance, there's some status associated with being in tech in the bay area, as well as legitimate opportunities. But there are high-paying tech jobs in places where you can live much more comfortably.
Many people want to be where other people are - the center of the action for their particular universe. They vote with their money.
You're right that status is a big part of it. Manhattanites look down on the "bridge and tunnel" crowd.
You're right that status is a big part of it. Manhattanites look down on the "bridge and tunnel" crowd.
Police in Long Beach, CA does this. When they find a homeless person sleeping on the streets or generally causing trouble, they put them in the patrol car, drive them to a neighboring city and "let them go." Now it's that other city's problem, but that doesn't matter because Long Beach has one fewer homeless person to worry about!
(This place is awful for many other reasons, but this just reflects the general mindset.)
(This place is awful for many other reasons, but this just reflects the general mindset.)
At the risk of sounding (or even outright being) cruel, Mr. Smith's real problem is that of terrible financial management skills. Keep in mind that when he moved out there in the 70's, the Valley was not nearly as expensive as it is today. And, with a software engineer's salary during its heyday, he could have very easily purchased -- and paid off -- a place for him to live. As he, himself, said, he made a choice to stay in the area even after he lost his job. He could have made a choice to move somewhere cheaper.
At the age of 70, after a long -- and I'm assuming successful, based on his highest salary -- career, having only a "meager" savings is no one's fault but his own.
At the age of 70, after a long -- and I'm assuming successful, based on his highest salary -- career, having only a "meager" savings is no one's fault but his own.
In some ways, it's even worse than that. Here's a guy who has been consuming from society at a high rate his whole life (necessarily, or else he would have money saved). When his lack of planning and laying-away comes back to bite him, it's Palo Alto's fault. I feel a lot more sympathy for people with mental issues or who have never been privileged enough to work a high-paying job.
>At the age of 70, after a long -- and I'm assuming successful, based on his highest salary -- career, having only a "meager" savings is no one's fault but his own.
I sympathize with him. I do not intend to save since there is no point when the future of the country is so uncertain.
I sympathize with him. I do not intend to save since there is no point when the future of the country is so uncertain.
"The neighbors in the community, I think, wanted to be reasonable, but they didn't feel safe having their kids go to the center"
Making laws to make the neighbors feel safer! Fantastic! "Don't be poor around me, I don't feel safe."
This is one of the worst forms of NIMBYism. And treating the disadvantaged as dangerous is a form of prejudice. How unfortunate that people only seem to care about racial prejudice.
Making laws to make the neighbors feel safer! Fantastic! "Don't be poor around me, I don't feel safe."
This is one of the worst forms of NIMBYism. And treating the disadvantaged as dangerous is a form of prejudice. How unfortunate that people only seem to care about racial prejudice.
Hard to fathom that a 30-year seasoned veteran of software engineering can't find a shred of work in the heart of Silicon Valley. According to the article, Mr. Smith hasn't worked since 2006? Something is terribly amiss here.
I find the overwhelming perspective of comments approaching this article to be, fascinating. I also think that Diogenes of Sinope would have a great deal to say concerning the matter.
I would say that it's a fallacy to dwell on why Mr. Smith is living in an RV or what he could have done to prevent himself from landing there. After all, it doesn't answer the question of why the state thinks it ought to so finely dictate the comings and goes of a person or where it is that one should choose to sleep. To seek shelter is as much a natural right as any of the others and to deny someone easy access to readily available public shelter should come with the same level of concern as restricting speech.
I think it's more interesting that we choose to allow those who do own or can afford to rent property to dictate and bully others for the convenience of their avoiding a "nuisance." Since apparently choosing to reside in a house grants you greater worth than choosing to reside in a car.
I would say that it's a fallacy to dwell on why Mr. Smith is living in an RV or what he could have done to prevent himself from landing there. After all, it doesn't answer the question of why the state thinks it ought to so finely dictate the comings and goes of a person or where it is that one should choose to sleep. To seek shelter is as much a natural right as any of the others and to deny someone easy access to readily available public shelter should come with the same level of concern as restricting speech.
I think it's more interesting that we choose to allow those who do own or can afford to rent property to dictate and bully others for the convenience of their avoiding a "nuisance." Since apparently choosing to reside in a house grants you greater worth than choosing to reside in a car.
"An ordinance passed by Palo Alto last year would punish people cited for living in a vehicle with as much as a $1,000 fine or six months in jail."
Yep, that's exactly the incentive they need to not be homeless. /s
Yep, that's exactly the incentive they need to not be homeless. /s
Only 15 emergency shelter beds in all of Palo Alto?! And an estimated 150 men, women, and children competing for those spots every night? That's disgusting.
Companies who have HQ's in Palo Alto: http://en.m.wikipedia.org/wiki/Category:Companies_based_in_P...
Not one of those companies, some of which are valued in the billions, could pick up the cost of sponsoring another ten emergency beds? Another five, even?
Companies who have HQ's in Palo Alto: http://en.m.wikipedia.org/wiki/Category:Companies_based_in_P...
Not one of those companies, some of which are valued in the billions, could pick up the cost of sponsoring another ten emergency beds? Another five, even?
Possibly, but they'd have to bring in their profits from offshore, and that would be taxed.
That might be something the legislature could do (Sacramento, maybe Washington) -- corporations buying municipal bonds are exempt from the tax.
Ahhh, but you see, if they were taxed, then Palo Alto would have the money to build more shelters.
Palo Alto doesn't have an income tax. Maybe California or the federal government would have the money though.
As soon as you increase number of shelter beds, you increase number of homeless in the city. For example see San Francisco. It's impossible to solve this problem locally.
I don't see why they needed to make this law specifically against living in a vehicle. Most places already have some sort of limit on how long a vehicle can be parked on the street. Usually around 72 hours and you have to relocate to another street (it doesn't count to just move it a few feet). Let them sleep in their car... as long as they move it to another street every few days.
Let's assume started in 1978 with 30k. Pay increases of 5.75%/yr which gets him to 151K in 2007. assuming saving 10% and a 8% return per yr that's 628k in 401k. Let's assume market takes 40% and losses job with 2-3 years before SSN. Out there you could easily blow through any kind of retirement savings pretty quickly.
4% of 628k (safe withdrawal limit) is 25k - this is amount you can withdraw in pretty much perpetuity (for 62 year old). 25k combined with SSN (20k/year) is very close to average family income in US and guarantee good living in most cities in US (outside of Bay Area/NY and a few other zip codes).
Saving 10% is borderline enough to retire on if you do not make stupid financial moves (like moving out of market in 2007 or living in most expensive area in US). It's not enough to be financially secure - you need to save 20-25% for that (totally doable on software engineer salary).
Saving 10% is borderline enough to retire on if you do not make stupid financial moves (like moving out of market in 2007 or living in most expensive area in US). It's not enough to be financially secure - you need to save 20-25% for that (totally doable on software engineer salary).
Serious question: Are there trailer parks in the area? A place where you can rent land for parking a mobile-home long term?
I am not at all familiar with the SF/Valley rental market, other than hearing how it's exorbitantly expensive and rents keep growing. I'd have to think there would be somewhere where rents are not so expensive. I have a hard time believing a standard suburban studio or one-bedroom apartment would cost $2800.
As for the article, it sounds like the man profiled here isn't really making rationale decisions, so it's difficult to tell how bad the situation, outside of this anecdote, actually is.
I am not at all familiar with the SF/Valley rental market, other than hearing how it's exorbitantly expensive and rents keep growing. I'd have to think there would be somewhere where rents are not so expensive. I have a hard time believing a standard suburban studio or one-bedroom apartment would cost $2800.
As for the article, it sounds like the man profiled here isn't really making rationale decisions, so it's difficult to tell how bad the situation, outside of this anecdote, actually is.
There are a couple of RV parks in the area. I want to say they're $700 a month plus electricity. Not sure if any of them would be up for multi-year residents, that's more of a mobile-home (trailer) park thing. Of which, there are several in the area and from what I can tell from Google maps, they're all full.
yes there are places within a short car ride of the city where you can rent.. for about $750+/month a place to put an RV with electricity and hookups and all of that.. Some of these vehicle dwellers can't even afford that.
As far as FREE places to camp with an RV, no absolutely not. You have to drive hours to get to a campground where you might be able to camp for free or close to nothing.
As far as FREE places to camp with an RV, no absolutely not. You have to drive hours to get to a campground where you might be able to camp for free or close to nothing.
Does Palo Alto have regulations regarding minimum apartment size? If not, lower-cost microapartment complexes might make a good long-term investment.
Good luck building anything in Palo Alto.
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Nothing scares me more than comments like that from government officials. A law that is selectively enforced is effectively an invitation for police harrasment. Either the law makes sense, or it doesn't. If individual civil servants get to decide when to apply a law, you've got a big problem.