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Early Retirement/Saving Money when Poor with Low Wages

 
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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. Minimum wage is a brief probationary period when a person first begins working in a new job. New workers earn merit raises as they learn how to better perform their duties and improve their skills, as well as increase their ability to take on more responsibilities.
 
pollinator
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This is a seemingly impossible predicament in our modern society. I do wish I had better suggestions but this is what has worked for me. If you don't have the kind of savings for retirement accounts or even bank accounts, silver can be a great long term store of wealth. You can get ounces of bullion at pawn shops and the like for something around 15$ a piece. There is the issue of storing them safely, but they are hard enough to spend that you aren't going to convert them back to cash for something petty, and there is a decent chance they will grow in value even in the short term. If you can keep them for the long term you can gain some real value.
 
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Greg Mamishian wrote:

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

Technically you may be correct, as often people are given a nominal (often only $0.25 to $1) raise. But this is strictly for the bosses benefit to decrease the turn-over of staff, *not* to give the employee a living wage. In my geographical area, the "general" minimum wage is $12.65/hour (workers that get tips get less). The minimum "living wage" is considered to be just over $20/hour. Finding a roommate is not a choice, it's a necessity for anyone earning less. I would have to check, but I suspect anyone working in Fast Food would find that there's a *very* solid ceiling on what they can earn through "merit" regardless of how good they are. My sister worked briefly in Management Training for a large chain. That meant they could give her a "salary" and expect her to work extra hours for free. The only day off she got, was the one the company held the Management Trainee meeting, so she didn't even get all of that off. She quit and became an accountant, but with all the automation in that field, even that job didn't pay what she deserved and often expected unpaid overtime. She definitely did not get the pay she merited. I personally know of many similar situations.

A Financial Planner I knew once said, "the only people I know who made a lot of money either owned their own business (read: long hours in most cases), or bought land when it was cheap and sold it when it was in demand." I agree with Permies principles: do what you can to get out of the rat race both by not supporting it through unwise purchases, and by finding ways to personally produce the things one needs without using after-tax dollars to do so (read: grow your own food when possible, sew clothes from second hand materials, repair yourself what needs fixing,redevelop community so that you can barter and share etc).

The poorer you are, the harder it is to even get on the elevator (the old adage that it takes money to earn money fits). 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.
 
Greg Mamishian
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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.



I did... but the odds were not against me. They were decisively in my favor because I wasn't educated by the government. This gave me a distinct advantage in that I escaped being conditioned to become an employee. I found that it is far more personally rewarding to captain my own tiny boat than to pull on an oar down in the galley of someone else's ship.
 
Jay Angler
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Actually, I'll add one more to my little list Greg quoted. Learn and teach your family/friends the benefits of "delayed gratification."  I've read studies that suggest it's a good predictor of success from even preschool-aged signs of it, and yet we've got a society which actively discourages it through software and media which pressure people to "have everything now". I'm inclined to believe that to at least a degree, it is a skill that can be taught and having read this thread, I think I should try harder to actively teach it to a couple of friends that might benefit - that fits under the "develop community" belief of mine!
 
Greg Mamishian
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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.



Collective solutions are impossible... while individual solutions are easy. Just don't do what other folks do. ;  )
 
pollinator
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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."  



I taught my daughter to handle her money from about 5 years old.  I told her to save 50% for college, put 25% towards saving up for a big purchase, and spend the other 25% on whatever she wanted.  I didn't get any say in the 25% she spent right away, though most of the time she ended up saving some of that too.
 
Timothy Markus
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And now for the rest of the story:

I guess it would have been helpful to also tell you that she's now 20 and very good with her money.  She's sat down a few of her friends and told them that she can afford to go for tea, but not dinners.  

She's also made money while she was in school (almost done) by selling commissions to people and even got a commission to do portraits for a book.  
 
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You do not have to smart or clever to save a lot of money.Never sleep and work hard will do it.
I am a person with no higher education,in my twenties I bought an old heavy truck and started hauling goods.I worked with this for fifteen years,I worked almost 24 hours a day,every day for fifteen years.I slept in my truck and I saved as much I could and that was a great deal of what I earned.I could buy my farm cash with no loans and now I have a real comfortable life.Of course I still work but not exactly for naking a living but more for the pleasure to do something good in my everyday.My tip is work hard and do not look so much what sakary you got per hour.The day has 24 hours.
 
pollinator
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My money saving techniques are mentioned early in this thread. I sometimes stumble upon one of them and it reminds me to go and check one of my free sources of stuff or to do one of the other things I preach about. For the last month I've been living and working in a house that's had half a million dollars in renovations in the last decade. But it's not all sunshine and roses. There have been a lot of rhododendrons, which I've given to some friends. :-) there's also lots of hard work involved in what I do. But enough about that.
...........
Probably the most important financial decision most of us will make, is who we choose as a spouse. It doesn't matter how frugal, how cheap, how smart and crafty you are, if you marry a spendthrift who stays up at night thinking of newer and better ways of disposing of your income, that can threaten your financial survival. I know many people in this boat. Two of my brothers who are both hard-working, have at different times saddled themselves with non productive women or those who expected a much higher standard of living than they could afford. One came from a very wealthy family that had lost all of their money. Nothing he did was good enough... It's too late for many of us, but for some it's not and for some it's time to cut somebody loose. If it's pretty obvious, that this is you, do it today. Delaying the end of a relationship does not help you.

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.
 
Greg Mamishian
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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.



I'm happy to hear you have a frugal future spouse. :)
Women naturally tend to be more risk averse and home oriented than men who are more world oriented. My wife is as frugal as I am so we're a perfect "skinflint" match and we never argue over money. We have a loose division of labor in that she takes care of our home and garden, while I run my business and pay all our bills. This works really good because two people working together as a team can accomplish way more than each one ever could alone.
 
Dale Hodgins
pollinator
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Don't accept obsolescence as a reason to get rid of things and get the new ones. Phone companies often tell young people that their phone is outdated and should be replaced. I have known people of relatively low means, who spend their hard-earned money getting the latest gadget that, does roughly what the old one did.

This happens with cars as well. I was at a McDonald's and I met a young person who had a $25,000 car sitting in the parking lot. Monthly payments. My 20 year old Toyota Tercel is still serving me well after 2.5 years. I paid $600, which is an amount I can earn in 2 days. I only buy the insurance I need for liability. The person with the expensive car must also buy collision and comprehensive insurance, to satisfy the company that loaned them the money for the car.

I have never once bought an extended warranty, because I believe it's just another money grab. Plus they don't sell extended warranties for shovels that cost $1 at a yard sale :-)

It's important to let everyone know that you are keen to have anything of value that is free. You can always redistribute the eccess if you get given too many things. I'm going to be the Santa Clause of shoes when I go to the Philippines in a couple months. All of them were free.
............
This isn't about saving money, but about how I intend to spend my retirement money. I will put about half of my assets into a tree plantation on some land that I intend to buy in the Philippines. My chief crops will be moringa, which produces pretty well after 1 year and giant luceana, a timber and pole wood crop that is ready to harvest after 5 years . Both are things that require input cost, but they can pay quite handsomely for those who are willing to wait and not draw income from them until they are ready. I will be surrounded by other farms where people make very short-term decisions, mostly on crops that have just a few months where any investment is tied up. The person who has some money and can afford to wait, has one crop to harvest every 5 years and doesn't spend a ton on labor and other costs, every few months, for highly perishable things that are in oversupply in the marketplace. With the trees I will have the option of harvesting some or all of them, when market conditions are right. I expect that that will mostly mean thinning, whenever there is a big sale and letting it stand otherwise. Money in the bank and growing.
20170418_182125.jpg
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Greg Mamishian
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Music to my ears, Dale. :  )
Whenever you combine frugality with productivity you have it made. My wife and I practice both and we never have to worry about money for the rest of our lives. And owning a vehicle outright for a long time pays you back in so many ways. The two of the biggest are avoiding self inflicted slavery to debt and insurance. There is also the personal rewards of learning how to take care of things, and to use them without using them up.
 
Dale Hodgins
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This Thread started off talking about being poor with low wages. That's not me, but it was me when I was 16. I knew then that low paying jobs are for chumps. So I spent almost nothing, in order to save enough money that I could buy some equipment and get off that treadmill. By my the time I was 18, I had a truck and a chainsaw and some other tools that allowed me to earn considerably more than the minimum wage.

Not much has changed. There are still bottom of the barrel jobs and it's still very simple to leave them behind. The internet now offers free training and just about everything. So there's no reason to serve an employer.

My daughter was talking about some poverty issue that was mentioned in the newspaper the other day. She said that here in Canada, we have so many opportunities to advance ourselves, so much government help and organizations that will help you get a job or get training, that she just couldn't see why anyone would put their money into poverty relief in this country. Then she compared it to a bunch of other places in the world were even hard-working diligent people find it incredibly difficult to get ahead. I know a guy from Vietnam who managed to get a taxi company going, based on one nearly worn out second hand moped. Then he saved his money and he got another one and another one. For him it was a pretty simple trajectory. Make money and hold on to it at all cost. People who must consume every dime they make, aren't able to pull themselves off the bottom.

So I think for anyone who is struggling at the very bottom of Western Society, it's not going to be about how you can manage to save for retirement on low wages. The math just doesn't work. It's about managing to get off the low-wage treadmill.
 
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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).
 
Greg Mamishian
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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).



You're right, Jennifer, saving is slow when you don't make a lot of money.
I was 50 before I had saved up enough money for us to buy land and build our house. But now that I'm 70, we're in a good position financially. Most people think about piling up lots of money for when they're old, or working at a company for a long time in order to get a pension. Instead, I focused on reducing expenses, and took an approach similar to yours by working in small businesses while avoiding debt. I have no pension except getting back a little Social Security that I paid into for over 40 years. However, being free of the burdens of debt and insurance, we're able to live very comfortably on practically nothing.
 
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