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Is ‘Boomer’ now a pejorative term?

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Online  Re: Is ‘Boomer’ now a pejorative term?
Posted: November 16, 2019, 9:42 AM Post
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BrewersSuperCollector said:
Right or wrong for me meaning do I start a 529 account right away or pay my debt first. I don't know which would have saved me the most money in the long term.


Dave Ramsey would say debt first. Numbers would say it depends on the debt.


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Online  Re: Is ‘Boomer’ now a pejorative term?
Posted: November 16, 2019, 10:00 AM Post
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This probably belongs in an investing thread but for those with excessive student loans that are still with Fannie Mae or Freddie Mac or Bernie Mac or whatever the Fed program is these days, I recommend refinancing with something like SoFi or LendKey (I got quotes from three different places). My interest rate was cut by more than 50%. Obviously there's a little less leeway if you need to freeze payments but if you have a good job certainty it can save you 10's of thousands of dollars.

"Dustin Pedroia doesn't have the strength or bat speed to hit major-league pitching consistently, and he has no power......He probably has a future as a backup infielder if he can stop rolling over to third base and shortstop." Keith Law, 2006


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Posted: November 16, 2019, 8:55 PM Post
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SoFi is legit. I just missed all those programs but Credible seems to be the same; I know you get SoFi when you search via Credible...I don't think Credible actually does any of the banking. I think it's like an Expedia for loans but I'm not super well-versed on this.


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Posted: November 16, 2019, 8:57 PM Post
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Also, interesting/useful note...you CAN open a 529 even before you have kids, just do so in your name, and change it when they're born. I did it with my 2nd.


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Online  Re: Is ‘Boomer’ now a pejorative term?
Posted: November 16, 2019, 9:43 PM Post
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I’ve mulled refinancing my student loans and cutting the repayment time in half. Just not sure the savings are really worth nearly double the monthly payment. I can’t really save anything simply refinancing under the same length terms as 5% isn’t terribly high as is.

As far as a 529, I recently started one. I think that is more valuable than trying to pay down my loans faster. The growth and all the little quirks that save money should outweigh the interest you pay on your own student loans. As someone mentioned you can start one without kids and you can transfer it between kids too. It only locks up money when they hit 18 and it becomes theirs.


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Posted: November 17, 2019, 1:12 PM Post
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I have a young son. It’s my aim to pay for every dollar of his education, but I haven’t started a 529 yet. Instead, I’m focused on paying off our mortgage early. Once we own our home free and clear, those mortgage payments will turn into tuition payments. I figure he can always borrow for college, but I can’t borrow for retirement.


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Offline  Re: Is ‘Boomer’ now a pejorative term?
Posted: November 17, 2019, 1:32 PM Post
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Elizabeth Warren* wrote a personal finance book in 2005 called All Your Worth. She has an interesting hypothesis that states (and I’m simplifying) a lot of the financial trouble folks run into these days is a result of a change in banking laws, which eased restrictions on the amount of interest banks could charge. 50 years ago, people couldn’t borrow more than a year’s salary to buy a vehicle because banks didn’t want a customer to overextend themselves and default on an auto loan. However, today, banks aren’t quite as limited and are much more willing to make all kinds of loans (auto, boat, ATV, etc.), provided they are compensated for the added risk in the form of higher interest rates.

* this book is apolitical (and a recommendation for fellow personal finance nuts)


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Posted: November 18, 2019, 11:21 AM Post
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nodakfan17 said:
Elizabeth Warren* wrote a personal finance book in 2005 called All Your Worth. She has an interesting hypothesis that states (and I’m simplifying) a lot of the financial trouble folks run into these days is a result of a change in banking laws, which eased restrictions on the amount of interest banks could charge. 50 years ago, people couldn’t borrow more than a year’s salary to buy a vehicle because banks didn’t want a customer to overextend themselves and default on an auto loan. However, today, banks aren’t quite as limited and are much more willing to make all kinds of loans (auto, boat, ATV, etc.), provided they are compensated for the added risk in the form of higher interest rates.

* this book is apolitical (and a recommendation for fellow personal finance nuts)


It is far more complicated than this. The federal reserve has been messed with so many times that the interest rate is artificially low which allows the banks to lend more at a lower rate. Take housing interest rates for example in 1980 the average interest rate for a home was something like 20%.

We could go back to the 1980 or even the 1990 interest rates but that would crash the economy and put us in a far worse depression than what happened in the 1920's.


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Posted: November 18, 2019, 12:03 PM Post
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We have three kids in college (one still in HS). Over 25 years ago, we decided to invest in two areas: our retirement and also for our children's education. We pay for 1/2 of our kids' college education? Why half? The goal is to have the kids learn how to value a dollar by working towards their education. It also helps them to choose careers in which the are passionate and will allow them to a job right out of school. So, we have one future pharmacist and two nurses (hopefully).

In my experience, I have seen many cases where kids had their higher education paid for by their parents, etc., and they would party all the time, and not really care about their education. Of course, there were those that still valued the education.

A friend of mine told his children that they have to fully pay for the first year of their education. After that, he would pay for all of it. That seemed to work well, too.

My dad, a boomer, was a teacher in a small school district in rural Wisconsin. My mom chose to stay at home to care for my brother and me. Many times, we had powdered milk and powdered eggs. I also remember wearing bread bags in my shoes during the winter. We had very little money and my parents gave me nothing towards my education. Every summer, I worked and didn't have a social life. I didn't want the same type of experience for my kids, so we are meeting them half-way in a manner of speaking.

It helps my wife is a Financial Adviser, too [wink]

Regardless of financial status, my Boomer parents taught me to work my ass off. I have to go out and earn things. I have tried to teach my kids that same ethic whether it is in school, playing softball / baseball, or life. Seems like it is working so far, thankfully.

Story at 10... film at 11...


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Offline  Re: Is ‘Boomer’ now a pejorative term?
Posted: November 18, 2019, 6:20 PM Post
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nodakfan17 said:
Elizabeth Warren* wrote a personal finance book in 2005 called All Your Worth. She has an interesting hypothesis that states (and I’m simplifying) a lot of the financial trouble folks run into these days is a result of a change in banking laws, which eased restrictions on the amount of interest banks could charge. 50 years ago, people couldn’t borrow more than a year’s salary to buy a vehicle because banks didn’t want a customer to overextend themselves and default on an auto loan. However, today, banks aren’t quite as limited and are much more willing to make all kinds of loans (auto, boat, ATV, etc.), provided they are compensated for the added risk in the form of higher interest rates.

* this book is apolitical (and a recommendation for fellow personal finance nuts)


Sorry, but that doesn't check out. Interest rates are at historic lows, and have been for some time.


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Online  Re: Is ‘Boomer’ now a pejorative term?
Posted: November 18, 2019, 6:26 PM Post
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FVBrewerFan said:
nodakfan17 said:
Elizabeth Warren* wrote a personal finance book in 2005 called All Your Worth. She has an interesting hypothesis that states (and I’m simplifying) a lot of the financial trouble folks run into these days is a result of a change in banking laws, which eased restrictions on the amount of interest banks could charge. 50 years ago, people couldn’t borrow more than a year’s salary to buy a vehicle because banks didn’t want a customer to overextend themselves and default on an auto loan. However, today, banks aren’t quite as limited and are much more willing to make all kinds of loans (auto, boat, ATV, etc.), provided they are compensated for the added risk in the form of higher interest rates.

* this book is apolitical (and a recommendation for fellow personal finance nuts)


Sorry, but that doesn't check out. Interest rates are at historic lows, and have been for some time.


I think nodakfan is saying that they can charge higher interest rates on the loans they provide therefore they are ok lending to people who wouldn't have qualified back in the day.

"Dustin Pedroia doesn't have the strength or bat speed to hit major-league pitching consistently, and he has no power......He probably has a future as a backup infielder if he can stop rolling over to third base and shortstop." Keith Law, 2006


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Offline  Re: Is ‘Boomer’ now a pejorative term?
Posted: November 18, 2019, 8:06 PM Post
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homer said:
FVBrewerFan said:
nodakfan17 said:
Elizabeth Warren* wrote a personal finance book in 2005 called All Your Worth. She has an interesting hypothesis that states (and I’m simplifying) a lot of the financial trouble folks run into these days is a result of a change in banking laws, which eased restrictions on the amount of interest banks could charge. 50 years ago, people couldn’t borrow more than a year’s salary to buy a vehicle because banks didn’t want a customer to overextend themselves and default on an auto loan. However, today, banks aren’t quite as limited and are much more willing to make all kinds of loans (auto, boat, ATV, etc.), provided they are compensated for the added risk in the form of higher interest rates.

* this book is apolitical (and a recommendation for fellow personal finance nuts)


Sorry, but that doesn't check out. Interest rates are at historic lows, and have been for some time.


I think nodakfan is saying that they can charge higher interest rates on the loans they provide therefore they are ok lending to people who wouldn't have qualified back in the day.


Thanks, homer. Yeah, it’s not so much about the level of interest rates (pretty low since 2009), but rather the difference between the market rate and what banks actually charge. Hypothetically, let’s say banks were once limited to charging a maximum of 2% above the market rate for auto loans. They had to stick to well-qualified buyers because they couldn't afford to lose any of the principal. Today, without a cap, banks have a little more leeway. For example, they might be able to lend to a recent college grad at 3% above the market rate. 50 years ago, this person may not have qualified for an auto loan. The default rate for this type of borrower may be higher than the typical well-qualified buyer from 50 years ago, but the bank is compensated for the extra risk in the form of higher interest (collecting 3% above the market rate instead of 2%). Generally speaking, providing credit to a broad range of people is a good thing. However, it has created issues for some folks who have overextended themselves.


Last edited by nodakfan17 on November 18, 2019, 8:07 PM, edited 1 time in total.

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Posted: November 18, 2019, 8:07 PM Post
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homer said:

I think nodakfan is saying that they can charge higher interest rates on the loans they provide therefore they are ok lending to people who wouldn't have qualified back in the day.


It is more of supply and demand than it is the higher interest rates. There are just more applicants in the pool and the banks are now able to take on more risk because of this. With the higher applicant pool the banks can take on more risk as the average person far out weights the high risk person.


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Online  Re: Is ‘Boomer’ now a pejorative term?
Posted: November 18, 2019, 10:05 PM Post
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If someone doesn’t care about their education because someone else is paying for it they certainly aren’t going to care if they are paying for it either. You care or you don’t. I don’t think there is a strong correlation between the student paying versus someone else.

The reason kids not paying for their college flame out more often is because they are going purely based on not having any financial skin in the game. If they would have to put in an effort to pay (like having a job on top of it) they simply wouldn’t go...not try harder.

Sure it may motivate some, but odds are they already cared and were going to put in the effort anyway. I knew a lot of people from a lot of different walks of life. No amount of financial aid (or lack of it) was going to help the people that failed/dropped out.


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Posted: November 19, 2019, 7:01 AM Post
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Eh, I'm not sure I totally agree with that, but I would guess that the people who can pay for kids education and choose not to cover 100%, have probably already raised children that are humble and decent and would already care by that point in life whether it was paid for or not.

I have a very wealthy uncle in real estate out East (bought up a bunch of shore properties in the 70s) who had two boys, and he did make them both take out some loans. His words were "if I pay for the whole thing, they have no skin in the game."

So maybe I do agree with it a bit, but I also think giving them a loan will help them empathize with those less fortunate. I knew a lot of people who got a free ride and they worked hard, but most of them also lack any concept of what they were given.


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Online  Re: Is ‘Boomer’ now a pejorative term?
Posted: November 19, 2019, 7:29 AM Post
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The problem is loans don't make a student have "skin in the game", at least not mentally. The amount of students that actually realize what their loans will cost them monthly or actually realizing they will have to pay them back is essentially zero. Yes they know they have to pay them back, but it doesn't really hit them until they start getting that bill. The only students with a real big grasp on the impact their loans will have in the future are finance/accounting type students.

Even then the way they portray students as making a big joke about their loans and how much they are going to have is woefully accurate. Taking out loans simply isn't going to make a student suddenly put in a ton of effort. It is just imaginary money they are spending until the payments hit. Many students who get aid will take out the max federal loan anyway to get the refund check so they can have spending money. To be honest I didn't know a single person who didn't take out the max. College students either want the refund check or they want to keep as much money in their bank account as possible. Many students could pay a lot more out of pocket, but opt not to so they can get a newer car or have spending money for random things.

Every student is different, but taking out loans just isn't changing much in their head. Now if you have to start dipping into your own bank account and run it close to $0...maybe that gets you a little more focused.


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Offline  Re: Is ‘Boomer’ now a pejorative term?
Posted: November 19, 2019, 8:29 AM Post
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Making a television show

https://www.msn.com/en-us/tv/news/fox-filed-ok-boomer-trademark-application-for-tv-show/ar-BBWXB4Z?ocid=spartandhp


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Online  Re: Is ‘Boomer’ now a pejorative term?
Posted: November 19, 2019, 9:25 AM Post
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That's surprising that Fox would be the network to go for this type of show. Unless the point is to mock the kids that say "Ok boomer".


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Offline  Re: Is ‘Boomer’ now a pejorative term?
Posted: November 19, 2019, 4:35 PM Post
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KeithStone53151 said:
That's surprising that Fox would be the network to go for this type of show. Unless the point is to mock the kids that say "Ok boomer".


The point will be to mock the boomer. Essentially the same as 80 other sitcoms where dad is the butt of the jokes.


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Offline  Re: Is ‘Boomer’ now a pejorative term?
Posted: November 19, 2019, 9:40 PM Post
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I recall hearing that most universities (I think all public and about half of private) do not take into account the value of a family's home when applying for financial aid. If true, then it might be best to pay off the mortgage first before putting anything into a 529.


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