Early Retirement/Saving Money when Poor with Low Wages

Jay Angler wrote:If someone is already struggling on minimum wage...

Your experience may be different from mine, but I have never seen anyone work for minimum wage permanently.

Jay Angler wrote:The people I know who succeeded against the odds, were those who for whatever reason, were able to ignore the societal norms that pushed so many that I knew into spending beyond their means, were able to think outside the box and who learned or taught themselves practical skills.

Jay Angler wrote:Humans tend to puff themselves up by thinking/seeing that they are richer than those around them, and we're bombarded with technology that tells us that "richer" means "owns more stuff". That means there is huge inertia in the status quo! This is not a situation that will be solved easily.

Jay Angler wrote:Actually, I'll add one more to my little list Greg quoted. Learn and teach your family/friends the benefits of "delayed gratification."  

Dale Hodgins wrote:I have a fiance from a country with near zero safety net, who grew up in extreme poverty. Dead father, mother with mental problems and three siblings. She has a few scars on her legs and back, from getting caught in the wire, while stealing food as a child. She was working as a house slave at 8 years old. She is very tight with money, and I don't think that's ever going to change. Every day, I earn approximately three times her former monthly income. She knows this, but was still reluctant to spend money when we spent two months together in the Philippines. She kept a lot of greedy relatives from bugging me about money. She checked what I paid for everything, and scolded me if I paid too much. I gave her many opportunities to waste a little bit of money, but she did not. Money is the number one thing that couples fight about, so we also had a very wonderful time together..... We have disagreed about money. Because of growing up in poverty, she has what I call a poverty mindset. Afraid to invest in things for fear of losing money. Afraid to try some new things. Afraid of almost anything that entails Financial Risk. I understand that this was necessary for her, but now we will be starting a farm and building a small motel and we will start a plantation of some sort, along with several other business enterprises. All of these involve some risk. To alleviate her worries, I always tell her how much I plan to invest in each thing, and how many days I had to work in Canada to earn the amount we will invest. Because otherwise the numbers seem much too large for her to risk losing. So, she has to learn about taking some risk, for greater gain. But, mostly we are on side, since neither of us put any value on fancy vehicles or fancy restaurant meals. She thinks we should put everything into our home and business. So do I. Although we have many differences, that one is very important to have agreement upon.

Jennifer Richardson wrote:You can save for retirement on low wages if your needs are small, but not very fast. I have never made more than $15,000 a year. My average is probably around $8,000 since age 18. I worked before that and ran small “businesses,” but mostly for pocket money. I have $45,000-$50,000 in the bank that I have saved (it varies, as a portion is in stocks). I am 31. I need about $200,000 to be financially independent. I hate to work for money, so I tend to work at appealing low-paying jobs or a very small number of hours at high paying, flexible jobs or businesses. This is more of a choice than a necessity, although at some point it does become difficult to break into a “career” type job or trade without getting a new credential of some kind (which costs money).

john mcginnis wrote:Suggestion: If you have the space (and time) invite them to stay for an extended weekend.

The ole saying, "doing is seeing for the first time"  might reveal to them that you do indeed have limited time as well, its just spent doing different things. I did the corporate thing, travel, hustle, etc in the past. It tends to get you wrapped up into yourself to see anything else. A shift in perspective might change their attitude.

Hope it works for you.

Denise Kersting wrote:Beth, while my job is much different than yours, I have faced the same problem. I telework, and have found that sometimes people feel that I should be available for babysitting, etc., during my normal work hours, but that is not the case. I need to be in my home office, logged in, and working. I have to account for all of my time and my deadlines won't get met unless I am actually doing the work. Much like your homestead, which I'm sure requires work to be done when it needs to be done, and not put-off while you tend to someone else's needs. If you end up losing a full crop because of not being able to water or some other task, that places a financial burden on you. That can actually impact your annual "salary" as what you do there and produce to use or sell, drive or lower that number. That isn't something your family should take lightly. IMHO I'd explain as clearly and nicely as you can that you are not available for frequent "bailing out" because your homestead does indeed require daily work, but if you are comfortable make it known that you are available in a situation that is more of an emergency or unexpected situation. I would try to add in a brief explanation of what all it takes to run your homestead to clarify your time is taken and valuable.

Beth Wilder wrote:
Thanks, Denise! I was sort of vague about what I do because it's complex, but we both also do remote freelance work whenever we can get it and also have businesses selling our arts/crafts online and at market. But yes, like you and I'm sure everyone else here, we are always working! People confuse the comparative flexibility of working for ourselves with the luxury of not working at all.
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What I'm really feeling pained by is the perceived judgement that their lives are more important and successful than mine,

Skandi Rogers wrote:

the second point is something one just has to get used to I think. We have a house and land with no mortgage (infact we have two at the moment, anyone want a house in Denmark?!) but because we don't "work" we're seem as somehow lesser beings.

Bob Gallamore wrote:One thing the I won't skimp on if at all possible is insurance.  We will continue to pay for full coverage insurance on the car once paid off, and I will continue to pay the $25/year for rental car coverage.

Productive assets will always be the better value.

john mcginnis wrote:Travis, A good move overall. I will point out however that merely holding cash means you are losing a minimum of 4% every year. Govt numbers, I think it is even higher.

The ole USD is merely a conduit but in itself holds no value. Productive assets will always be the better value.

Jay Angler wrote:john mcginnis wrote:

Productive assets will always be the better value.

To put that in home-ec terms, money in the bank or invested often doesn't earn enough interest/gain to offset the increase in the cost of living. Whereas, my canning jars are still canning jars 5 years from now, and I can still fill them with homemade jam, pickles, tomato sauce which also doesn't loose value when the cost of living goes up. Having someone home full time who is a self-starter and committed to fill canning jars, mend clothing, care for animals, and repair housing means that you aren't using after tax dollars to pay someone else to do all those things. Women's lib encouraged women to get jobs, but that was when growing and storing your own vegetables was seen as menial work that the society at large did not appreciate - not unlike people looking down their noses at blue-collar workers at the same time. Society is beginning to see that is both short-sighted and down-right wrong, but only in isolated patches, and possibly after that horse has already bolted - now many young people are stuck in even "lower level" service jobs when plumbers earn darn decent wages.  

Travis Johnson wrote:

john mcginnis wrote:Travis, A good move overall. I will point out however that merely holding cash means you are losing a minimum of 4% every year. Govt numbers, I think it is even higher.

The ole USD is merely a conduit but in itself holds no value. Productive assets will always be the better value.

But I do not think that is the case.

Take for instance the farm insurance on the house. I stated, and did the math upon what its cost was 10 years ago; or $1400 per year. It is probably more like $1800 now. But it does not matter...when you do not spend money for a certain thing, you get to keep whatever that value is because you are not paying it. $1400 a year? $1800 a year? $2200 a year...All that matters is, I have enough money to replace the home if something happens.

That is the beauty of NOT SPENDING, as something's annual cost goes up, and you are not paying for it, your savings stays right in tune with it.

This is where real and theortical comes into play. If a food shortage drives up the price of food in the store, it just makes my homestead produced food worth vastly more. I could care less if my Brocolli is worth $2.59 per jar down in the basement, all that matters is, my family does not go hungary. The real value of food is that it keeps us fed, it just happens to be that people will pay for that sustenance.

And a lot of assetts work that way as well.

My homes value goes up automatically with cost of living, as does heavy equipment, land, sheep, etc. A good example of this is my tractor. I bought it new in 1999 for $14,200. Today the same tractor would cost $18,000. Because I have used my tractor, it has depreciated, but not by much, it is worth $11,000 today, a loss of only $3200 in 20 years. Now try and calculate how much work that tractor has helped me accomplish in 20 years. It is a very sound investment. In fact, a tractor is one of the few things I would actually buy new. I would NEVER buy a new car...

My woodlot however did not go up in value. In fact 3 years ago I lost 1/3 of its value when paper mills in Maine started to close. It has never recovered, and why I have been clearing forest and putting it into field. We do not eat trees, and food is going up in price. Whereas forest was making me about $70 per acre per year, I can make $500 per acre per year with lamb. There is a lot more work because I must care for them daily, and not just let trees grow, but the profit per acre is immensly more too. I just have to pay to have stumps pulled, the soil graded, and rocks picked in order for that lands value to be fully realized.

But here is the kicker, I do not "lose" or "make" money until I actually do something. The value of my woodlot rises and falls, but it is not until I physically cut that wood, that I have realized a loss.It is the same thing with stocks. We recently changed a few to High Risk, and I like their worth right now, but I have not actually made any more money by the switch, until I sell the stocks. It is that way with sheep, hay, trees, etc.

Travis Johnson wrote:
And a tractor does not always depreciate. My Grandfather bought a Ford 900 tractor in 1958 new for $1500, and we traded that same tractor in in 1999 for $1500. It did not lose one dollar in depreciation, yet consider all the work it did over the 41 years we had it. That is actually unheard of, but it can still be done today. My tractor now has depreciated a bit at $3200, but it is entirely possible that in 10 years from now, it will be worth $14,200; the same amount that I paid for it. Tractors just do not depreciate like cars do; and again, considering all the work that they do, they are a real help around the farm/homestead. (That last part is an incredible understatement by the way).

$1500 in 1958 would be a comparative worth of $8647 in 1999. Highly likely your grandfather received > $7000 in use of the tractor, why else would he have it? But receiving the same $ value between the two dates without the personal use gain would be a loss. I certainly don't deny that the typical tractor depreciates far slower than a typical car.
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Just to be clear on repair though, the Supreme Court has already ruled that a person can fix their own tractor. What is getting peoples dander up, is that the Supreme Court did not rule that anyone can fix your tractor. John Deere asserted that it sold a tractor, but not the electronics in those tractors, and the Supreme Court ruled that it was not the case. John Deere has to sell diagnostic equipment to a tractor owner so they can fix their machine. However, they are not required to sell that diagnostic equipment to a non-dealership mechanic shop so they can fix your tractor. John Deere retaliated by simply changing the diagnostic equipment on every model they produce, so that a farmer cannot buy a John Deere testing gear and have it work on every John Deere tractor they own; instead they have to spend thousands of dollars for testing equipment for every new tractor they buy. Of course, the alternative is to just take it to them, but in an industry where 70% of the dealerships work is with warrantee work, they had to do something to get more service work. This was their attempt, but it really backfired on them.

And on emissions, keep in mind that they only apply to tractors above 26 HP. That is why you might see a glorified garden tractor that has a 26 hp engine, and yet a tractor that is quite a bit bigger in physical size, it has the same 26 hp engine.

It depends on what you feel is "required" for your farm, but you do not have to buy a tractor with complicated emmissions on it. You just cannot buy a big tractor without emissions.

But myself, I have always felt that people buy tractors way too big in size. I have a pretty big farm, and yet a 25 hp tractor serves me well.

Two acquaintances, one with an LS the the Deere have had nothing but computer problems with the units. One actually took it back the dealer and got his money back.