US Economy thread

[Goose]

Rocky

Thanks for the reply. First off, great calls on the purchases. That said, a follow up question to your first reply. I am just picking random numbers, but if the first two houses purchased are both were $300k and had normal appreciation, say worth $450k today, it seems like your empire is now worth $900k more. I am confused on how your empire would not be different, minus the extra $900k

Am I missing something? Again, I just grabbed numbers as a starting point.

[The Hippie Satan of Hyperbole]

I agree that education is way out of control. I have voiced my concerns repeatedly to Marquette's leaders (since they are, after all, my alma mater). Falls on deaf ears.

Because Marquette is in a position where it has to remain economically viable. This is a much broader question, with much more complex solutions, than Marquette simply lowering its tuition.

[dgies9156]

This is insanely out of touch.

People who live in glass houses shouldn't throw stones!

[rocky_warrior]

Paper money. I'm happy they are up significantly, and someday that may play into my nest egg (although also come with a huge tax liability, since I've also been depreciating).  But the real $ is the rental income.  Vs. purchase price they're currently providing about 12-15% return annually, and (my) rents have never gone down (though I actually do try to keep them fair...)

[MU1in77]

This is insanely out of touch.
[/quote]

How so?

[Goose]

Rocky

My middle son has an accounting degree and decided to become a mechanic instead. Over the past five years he has purchased two rental properties and is doing great. There is no doubt that you can do very well investing in real estate. My son is very fair on rent cost and will end up in great position down the road.

[Hards Alumni]

People who live in glass houses shouldn't throw stones!

I have dozens of friends in their 30s who it took months to buy a starter home.  The old folks are staying in their homes longer and only moving out when they're loaded into a hearse.  Couple that with a massive lack of new builds and the housing market is less attainable for entry than ever for Americans.

I suggest you do a cursory search on the MLS of what you consider a starter home, and look at what they cost and how few there are.

[Hards Alumni]

Rocky

My middle son has an accounting degree and decided to become a mechanic instead. Over the past five years he has purchased two rental properties and is doing great. There is no doubt that you can do very well investing in real estate. My son is very fair on rent cost and will end up in great position down the road.

My generation would have been better served if more than a few of us entered the trades instead of college.

[Spotcheck Billy]

I have dozens of friends in their 30s who it took months to buy a starter home.  The old folks are staying in their homes longer and only moving out when they're loaded into a hearse.  Couple that with a massive lack of new builds and the housing market is less attainable for entry than ever for Americans.

I suggest you do a cursory search on the MLS of what you consider a starter home, and look at what they cost and how few there are.

location location location

My B-i-L is now in assisted living in Peshtigo, way up nort. We are selling his home on 2 acres in Amberg, just accepted an offer on Saturday, 5K above asking but still just $60K .

[Skatastrophy]

I have dozens of friends in their 30s who it took months to buy a starter home.  The old folks are staying in their homes longer and only moving out when they're loaded into a hearse.  Couple that with a massive lack of new builds and the housing market is less attainable for entry than ever for Americans.

I suggest you do a cursory search on the MLS of what you consider a starter home, and look at what they cost and how few there are.

Yeah, but he was right about how hard the 70s & 80s were for young people, don't minimize that. Stagnant wages and crazy inflation coupled with sky-high interest rates. The 70s economy was really rough, and the economy today is not rough at all relatively.

https://www.federalreservehistory.org/essays/great-inflation#:~:text=This%2C%20then%2C%20became%20the%20era,unemployment%20was%20over%207.5%20percent.

1974 - inflation over 12 percent, unemployment was above 7 percent, interest rates 10%
1980 - inflation near 14.5 percent, unemployment was above 7.5 percent, interest rates above 13%

Mortgage rates weren't back below 10% until 1991.

[tower912]

Both can be true.    Actually, all can be true.  Say it with me, gentlemen, there are always headwinds.

[Hards Alumni]

Which I admitted was a personal anecdote that could lead me to be biased.

But again, I await your data-based dunking.

Income disparity increases every year
Wage growth has been basically flat until the last year or so, and even then it isn't keeping up with inflation
Housing/rent prices compared to earning power
Unemployment during prime earning years (10% in 09 as a lot of millennials were graduating, and it took until 2016 to come under 5%)

https://www.theatlantic.com/sponsored/deloitte-shifts/making-it-millennial/259/

It's from 2015, but it explains why Millennials got very slow start to their adulthood. 

[rocky_warrior]

Over the past five years he has purchased two rental properties and is doing great.

I had to chuckle.  Sounds like a terrible economy the government has created for him.  lol.

[Hards Alumni]

location location location

My B-i-L is now in assisted living in Peshtigo, way up nort. We are selling his home on 2 acres in Amberg, just accepted an offer on Saturday, 5K above asking but still just $60K .

But that's always been the case.  You can live in the middle of nowhere for cheap.

[Hards Alumni]

Yeah, but he was right about how hard the 70s & 80s were for young people, don't minimize that. Stagnant wages and crazy inflation coupled with sky-high interest rates. The 70s economy was really rough, and the economy today is not rough at all relatively.

https://www.federalreservehistory.org/essays/great-inflation#:~:text=This%2C%20then%2C%20became%20the%20era,unemployment%20was%20over%207.5%20percent.

1974 - inflation over 12 percent, unemployment was above 7 percent, interest rates 10%
1980 - inflation near 14.5 percent, unemployment was above 7.5 percent, interest rates above 13%

Mortgage rates weren't back below 10% until 1991.

While I think your heart is in the right place, 10% interest rate on a 36k home (1974 median price USA) is silly to compare to a 7% interest rate on a 412k home (2023 median price USA).

If wages had kept up, then sure, compare them.  But they haven't.

[The Hippie Satan of Hyperbole]

Income disparity increases every year
Wage growth has been basically flat until the last year or so, and even then it isn't keeping up with inflation
Housing/rent prices compared to earning power
Unemployment during prime earning years (10% in 09 as a lot of millennials were graduating, and it took until 2016 to come under 5%)

https://www.theatlantic.com/sponsored/deloitte-shifts/making-it-millennial/259/

It's from 2015, but it explains why Millennials got very slow start to their adulthood. 

First, I never disputed they got a “slow start.”  The article I posted acknowledges that. I mean they graduated during the Great Recession right? But they point out that in many ways they have caught up.

Second, posting a nine year old article is not your best work.

[Hards Alumni]

First, I never disputed they got a “slow start.”  The article I posted acknowledges that. I mean they graduated during the Great Recession right? But they point out that in many ways they have caught up.

Second, posting a nine year old article is not your best work.

Good to know we are only accepting articles from an, as yet, undetermined time frame.  What are we looking for?  Do you expect the sourced data from that article change?  No?  Only an article from the last year?  An NPR interview will do, obviously.

Will the goal posts continue to move?

[Hards Alumni]

https://www.stlouisfed.org/on-the-economy/2021/march/millennials-catching-up-earlier-generational-wealth

Perhaps this is more to your liking.  Though 2021 was a long long time ago.

[BM1090]

Color me suspicious when a certain slice of this country who has historically ignored and vilified the poorest 1/3 (and probably still does), but as soon as their are some warning signs that the economy might impact the middle third...we have a crisis in leadership and something needs to be done.

I'm not sure if you're referring to me here, but I'm significantly more concerned for the poorest third of the country than the middle third, although I do think the gap between the top 10% and the rest of us will continue to grow.

Sultan --

Apologies in advance if this is scattered as I haven't had time to organize my thoughts, but when I said rewards, I meant I don't believe we're benefitting nearly as much when making "smart" choices.

The average college graduate starting salary has increased about 37% since 2000 according to the National Center for Education Statistics. A 75th percentile salary was 72K in 2000 and 95K in 2023, an increase of 31%. Over that same time period, cost of living is up 70%. In the same timeframe, tuition costs are up 65%. Rent is up 73%. Mortgage rates are about the same, but property values are much higher. Which is great when you already have had property but much worse for first time homebuyers with higher debt to income ratios than we've seen in the past. These aren't small costs and when you think of what that means in terms of monthly expenses and revenues, it becomes very difficult to accumulate wealth at the same pace as past generations.

A higher percentage of college graduates are working as consultants instead of as full time employees. This isn't by choice. Corporations are offering less and less full time positions as they look to save money. So in addition to salaries not keeping up with inflation, people now have to pay more for healthcare, other benefits, and get less time off. A similar percentage of the workforce is earning minimum wage as 20 years ago, but the minimum wage hasn't increased or has barely increased in most places.

Major costs are all rising significantly faster than incomes. We're expected to cover a higher percentage of those costs, as corporations cover less. After the same expenses, we are seeing a much smaller percentage of our income than previous generations. And unless something changes drastically, the next generation will see an even smaller percentage of their incomes. The stock market is doing well, but we're able to put a lower and lower percentage of our money into it, making wealth accumulation more difficult. And that's not even to get into the significantly harsher challenges that the poorest third of the country have to face but aren't part of my reality.

And again, I'm not trying to complain. I'm sure there are positive strides we've made that I'm unaware of. I need to continue to become more educated on this topic. The reality is the reality and we need to individually and collectively find a way to navigate it. But in my opinion, too many people are denying the reality. Individually, we can still find ways to succeed. Collectively, it looks bleaker and bleaker with each passing year, and it will only become a bigger problem unless we all acknowledge it.

I'll try to expand on my positions later.

EDIT: Completely agree with Hards on trades professions. That's one area where there is a lot more opportunity than in the past.

EDIT 2: I enjoyed this Ted Talk if anyone has time to spend.

https://www.youtube.com/watch?v=qEJ4hkpQW8E

[jesmu84]

My generation would have been better served if more than a few of us entered the trades instead of college.

But that's not what the post gen X generations were told.

"Go to college. Accrue a little debt. Your reward is a financially stable, middle class life."

Multiple generations have kept up their part.

Instead, they're saddled with an enormous amount of debt. They're being underpaid in relation to inflation and/or production (and getting worse every year).

Not to mention near-zero chance of a middle class lifestyle with children on one income as the boomers enjoyed.

[Skatastrophy]

While I think your heart is in the right place, 10% interest rate on a 36k home (1974 median price USA) is silly to compare to a 7% interest rate on a 412k home (2023 median price USA).

If wages had kept up, then sure, compare them.  But they haven't.

!10% inflation for 10+ years with stagnant wages from the 70s until the 90s. You are being reductive, but I don't think it's on purpose. It's worth reading about imo.

People in the US are currently whining about 8% inflation for 1 year.

Edit: I'm not trying to say today is better or worse than the 70s because I don't think that argument is valuable to have. I'm just trying to say that you shouldn't discount dgies experience when he was fresh out of college. They were not easy times.

[Goose]

Rocky

My son is very blessed. He went to private schools, and expensive ones, from K-4 until HS graduation. He finished college with zero debt because my wife and I paid every dollar.
My goal as a parent was to get our kids in a solid position to have a great life. My wife and I sacrificed a great deal to help our kids.

Our kids were allowed to live at home rent free, provided they saved the money they would have spent by living solo. All three of our boys were home owners by age 25.

You can chuckle, but I believed I paying it forward. I could not be happier that my kids are on a positive path. I hope every parent is in position to pay it forward to their kids.

[Goose]

dgies

College costs are crazy and every school needs to watch costs. Saw that St. Norbert’s are making some cuts. I am surprised that smaller schools like St. Norbert’s can compete in this environment.

Not sure on level of cuts, but another example of private schools not controlling expenses.

[rocket surgeon]

Rocky

My son is very blessed. He went to private schools, and expensive ones, from K-4 until HS graduation. He finished college with zero debt because my wife and I paid every dollar.
My goal as a parent was to get our kids in a solid position to have a great life. My wife and I sacrificed a great deal to help our kids.

Our kids were allowed to live at home rent free, provided they saved the money they would have spent by living solo. All three of our boys were home owners by age 25.

You can chuckle, but I believed I paying it forward. I could not be happier that my kids are on a positive path. I hope every parent is in position to pay it forward to their kids.

  pretty much the same here too goose except the boys lived either in dorms their first 2 years then apartments.

today they are well situated, great jobs, own their own homes, couple of cars and not a whisper of neededing money since they graduated

so no, they didn't have a dude like weekend at Bernie's try to buy their votes...they are smart enough to not even consider that regardless

[Goose]

Rocket

My bad. My kids lived on campus, but after they graduated. They came home for one reason, to save money. As I mentioned, I hope that every scooper can help their kids in the same manner.

You did good, Rocket!!!