All these different charts remind me of something: there are lies, damn lies and statistics. As David Ogilvy wrote: Research is used much like a drunkard uses a lamppost: for support rather than illumination.
Can't Save? Here's Why
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Spartan_Warrior
- Posts: 1659
- Joined: Fri Dec 02, 2011 1:24 am
LOL @ RealPerson. I kinda agree but at the same time, what other recourse is there besides anecdotes?
@My_Brain: I don't claim to be an economics expert, but as I understand it there are only so many dollars in circulation at any given time. Dollars don't create more of themselves either. When business stock increases in value or dividends go up, that merely means the company has accumulated more of that limited currency (or is seen as having the potential to do so, or whatever). Right?
But you are correct, the lack of accounting for the ability of growth in savings is a weakness in the analogy. But I don't think it's relevant because the point of the analogy is in the way the water is distributed to begin with.
@My_Brain: I don't claim to be an economics expert, but as I understand it there are only so many dollars in circulation at any given time. Dollars don't create more of themselves either. When business stock increases in value or dividends go up, that merely means the company has accumulated more of that limited currency (or is seen as having the potential to do so, or whatever). Right?
But you are correct, the lack of accounting for the ability of growth in savings is a weakness in the analogy. But I don't think it's relevant because the point of the analogy is in the way the water is distributed to begin with.
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My_Brain_Gets_Itchy
- Posts: 267
- Joined: Fri Mar 02, 2012 5:29 pm
@Spartan_Warrior:
Money is more or less created out of thin air by the Goverment. The growth of the money suppply creates inflation.
In the water example 'creating' is not in the same regard as how money is created by the government, i didn't mean to imply 'literally' creating money.
Its more like using our water and skills to learn how to capture 'condensation' and 'rainwater' from the sky. These are not sources of our 'allotment/distribution' given to 'everyone', but water input sources we have made for ourselves independent of allotment, by making choices and gaining skills on how we use our water.
ERE presents a case that one can be free of this allotment/distribution process, or dramatically decrease dependency on it, within five years. Even if during this allotment/distribution process faces some challenges, ERE hyphothesizes that one can still be free of the process by choosing to create a large surplus each of those five years.
Money is more or less created out of thin air by the Goverment. The growth of the money suppply creates inflation.
In the water example 'creating' is not in the same regard as how money is created by the government, i didn't mean to imply 'literally' creating money.
Its more like using our water and skills to learn how to capture 'condensation' and 'rainwater' from the sky. These are not sources of our 'allotment/distribution' given to 'everyone', but water input sources we have made for ourselves independent of allotment, by making choices and gaining skills on how we use our water.
ERE presents a case that one can be free of this allotment/distribution process, or dramatically decrease dependency on it, within five years. Even if during this allotment/distribution process faces some challenges, ERE hyphothesizes that one can still be free of the process by choosing to create a large surplus each of those five years.
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My_Brain_Gets_Itchy
- Posts: 267
- Joined: Fri Mar 02, 2012 5:29 pm
It is easier to retire today...
I want to make the case that I think we are more empowered today, and that it is easier to retire today, than it was in previous generations, even with conceding that there is inflation and decreasing salaries.
For me, it starts and ends with convincing myself as fact, that me, the average individual, the 99% of the population, is living better and has a better standard of living than the Kings, ie. the 1%, of yesterday year.
I have access to better everything. All resources, electricity (heat, ac, light,etc), transportation, medicine, and food,etc. What if someone back then decided they leisurely wanted to settle down half way across the world. It would take an armada to do that. Transportation costs have deflated to a fraction of the cost. This was not really a viable choice for the average person back then.
The above example is a little dramatic since we are comparing two distant generations, but it is to point out the effects of hedonic adaption.
Ie. the indentured wage servant of today, lives better than the Kings of yesterday but we do not consider ourselves to be Kings. We still see ourselves as indentured wage servants.
If we compare our life to the boomers, I still believe we today, have more choice and opportunity, and are more empowered, than the boomers ever were because of the deflating costs of transportation, communications and information.
I'm old enough to remember when a distant relative was a distant relative. There was no skype or online video chat, no social media, there was no email.
-If you wanted to visit or see a relative, it was a huge cost, painfully expensive. Today, I can book a flight now online, compare costs, and pretty much leave any day of the week.
-I can text or instant message a friend while sitting in a cafe in Kathmandu, staying at a place that costs a fraction of what it costs back home.
-I can work from anywhere in the world if I have a laptop, an internet connection and a marketable skillset that allows me to do this.
This simply wasn't an option to the masses in previous generations.
Remember those old school carbon copy plane tickets of not too long ago? Remember how we use to book travel? Well, no, hedonic adaptation.
When I was in university working on a paper, access to information was a painfully expensive process. I'm not even talking about the boomer generation, I'm talking just 25 years ago. Dewey Decimal System in a library, micro fiche, hunting down a book. Horribly inefficient. you couldn't do a text search on a book for a key word, you would hope and pray that there was reference to it in an index or glossary at the back of the book. The amount of work required to get decent information was a huge opportunity cost.
Think about how cheap high quality information is today. The cost of access to experts has deflated tremendously from the boomer generation. Today, we get this pennies on the dollar. I'm talking deflation to the point that high quality information is near free both in terms of time opportunity costs as well as access to information.
This forum, blogs, Youtube instructional videos, How to sites, we all have the opportunity to become experts in anything (ie. web of goals). Again, did the boomers have this choice? How much would it cost for them to learn these skills?
Think about how difficult it would have been in the boomer generation to bring together the resources, the ideas and minds on this forum back then? How would we find each other? How do we price that?
When you travelled, it really was the unknown. There was no Google Street view, no GPS. There was no Trip Advisor reviews, no websites. It was all word of mouth. Very very expensive.
All combined, I believe we have at our disposal much better choice, opportunity and resources than any generation. I actually think we have too much choice and opportunity and too much information.
The constant from our generation to the previous, is that we must be resourceful, we must have discipline and focus.
Having too much spoils us. Follow your passion for the masses wasn't really a choice or an option in previous generations.
We end up like we're standing in front of a huge buffet and we end up gorging.
Hedonic adaption and having too much choice, too many options and too much information can paralyze us.
Many on this forum that have been accused of having a tone of 'self-aggrandizement' do so in the enthusiasm of realizing and having a certain enlightment from this hedonic adaption. Most certainly we disdain it, and look down upon it, and think of it in an ill-mannered way.
But we also, realize that there is another way, of which ERE is one.
I want to make the case that I think we are more empowered today, and that it is easier to retire today, than it was in previous generations, even with conceding that there is inflation and decreasing salaries.
For me, it starts and ends with convincing myself as fact, that me, the average individual, the 99% of the population, is living better and has a better standard of living than the Kings, ie. the 1%, of yesterday year.
I have access to better everything. All resources, electricity (heat, ac, light,etc), transportation, medicine, and food,etc. What if someone back then decided they leisurely wanted to settle down half way across the world. It would take an armada to do that. Transportation costs have deflated to a fraction of the cost. This was not really a viable choice for the average person back then.
The above example is a little dramatic since we are comparing two distant generations, but it is to point out the effects of hedonic adaption.
Ie. the indentured wage servant of today, lives better than the Kings of yesterday but we do not consider ourselves to be Kings. We still see ourselves as indentured wage servants.
If we compare our life to the boomers, I still believe we today, have more choice and opportunity, and are more empowered, than the boomers ever were because of the deflating costs of transportation, communications and information.
I'm old enough to remember when a distant relative was a distant relative. There was no skype or online video chat, no social media, there was no email.
-If you wanted to visit or see a relative, it was a huge cost, painfully expensive. Today, I can book a flight now online, compare costs, and pretty much leave any day of the week.
-I can text or instant message a friend while sitting in a cafe in Kathmandu, staying at a place that costs a fraction of what it costs back home.
-I can work from anywhere in the world if I have a laptop, an internet connection and a marketable skillset that allows me to do this.
This simply wasn't an option to the masses in previous generations.
Remember those old school carbon copy plane tickets of not too long ago? Remember how we use to book travel? Well, no, hedonic adaptation.
When I was in university working on a paper, access to information was a painfully expensive process. I'm not even talking about the boomer generation, I'm talking just 25 years ago. Dewey Decimal System in a library, micro fiche, hunting down a book. Horribly inefficient. you couldn't do a text search on a book for a key word, you would hope and pray that there was reference to it in an index or glossary at the back of the book. The amount of work required to get decent information was a huge opportunity cost.
Think about how cheap high quality information is today. The cost of access to experts has deflated tremendously from the boomer generation. Today, we get this pennies on the dollar. I'm talking deflation to the point that high quality information is near free both in terms of time opportunity costs as well as access to information.
This forum, blogs, Youtube instructional videos, How to sites, we all have the opportunity to become experts in anything (ie. web of goals). Again, did the boomers have this choice? How much would it cost for them to learn these skills?
Think about how difficult it would have been in the boomer generation to bring together the resources, the ideas and minds on this forum back then? How would we find each other? How do we price that?
When you travelled, it really was the unknown. There was no Google Street view, no GPS. There was no Trip Advisor reviews, no websites. It was all word of mouth. Very very expensive.
All combined, I believe we have at our disposal much better choice, opportunity and resources than any generation. I actually think we have too much choice and opportunity and too much information.
The constant from our generation to the previous, is that we must be resourceful, we must have discipline and focus.
Having too much spoils us. Follow your passion for the masses wasn't really a choice or an option in previous generations.
We end up like we're standing in front of a huge buffet and we end up gorging.
Hedonic adaption and having too much choice, too many options and too much information can paralyze us.
Many on this forum that have been accused of having a tone of 'self-aggrandizement' do so in the enthusiasm of realizing and having a certain enlightment from this hedonic adaption. Most certainly we disdain it, and look down upon it, and think of it in an ill-mannered way.
But we also, realize that there is another way, of which ERE is one.
I am still confused about this entire discussion about the middle class not being able to live a middle class lifestyle due to increasing costs.
However, as My Brain Gets Itchy says, the cost of information and the cost of transportation has gone down exponentially which means that we can use that information and cheaper transportation to live a very comfortable middle class life style on less money.
For example, one can use the internet to determine if it is cheaper to own a property or to rent a property. The general rule of thumb, if housing prices and rents are in balance, is that the monthly rent should equal 0.83% to 1% of the purchase price of a home. Therefore, paying $1,000 a month in rent is the equivalent of buying a $100,000 to $120,000 house. If the market value of the house is $300,000, then the landlord is actually subsidizing you!
My example above is a bit of a tangent but what I am trying to say is that the headline risk of lower incomes and higher expenses might be misleading depending on what measures the writer was using for income and expenses. If you are willing to rent versus owning, you can actually live a better lifestyle for less (assuming the home to rental price is out of whack).
Sure the middle class may have it more difficult if it pays for retail, eats out, and insists on owning but if it decides to pay wholesale (use Ebay, Craigslist or Freecycle), eat in, and is fine with renting, its quality of life won't have really diminished and is more affordable.
In other words, I am not sure if it is actually more difficult for Generation X/Y to live a middle class lifestyle on a middle class income as compared to the boomers.
I would agree that the poor would have a tougher time saving with higher commodity prices but I define poor as the 3.5 billion people who live on less than $2 a day and not the people who make minimum wage in well developed nations.
However, as My Brain Gets Itchy says, the cost of information and the cost of transportation has gone down exponentially which means that we can use that information and cheaper transportation to live a very comfortable middle class life style on less money.
For example, one can use the internet to determine if it is cheaper to own a property or to rent a property. The general rule of thumb, if housing prices and rents are in balance, is that the monthly rent should equal 0.83% to 1% of the purchase price of a home. Therefore, paying $1,000 a month in rent is the equivalent of buying a $100,000 to $120,000 house. If the market value of the house is $300,000, then the landlord is actually subsidizing you!
My example above is a bit of a tangent but what I am trying to say is that the headline risk of lower incomes and higher expenses might be misleading depending on what measures the writer was using for income and expenses. If you are willing to rent versus owning, you can actually live a better lifestyle for less (assuming the home to rental price is out of whack).
Sure the middle class may have it more difficult if it pays for retail, eats out, and insists on owning but if it decides to pay wholesale (use Ebay, Craigslist or Freecycle), eat in, and is fine with renting, its quality of life won't have really diminished and is more affordable.
In other words, I am not sure if it is actually more difficult for Generation X/Y to live a middle class lifestyle on a middle class income as compared to the boomers.
I would agree that the poor would have a tougher time saving with higher commodity prices but I define poor as the 3.5 billion people who live on less than $2 a day and not the people who make minimum wage in well developed nations.
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secretwealth
- Posts: 1948
- Joined: Mon Jun 27, 2011 3:31 am
"Sure the middle class may have it more difficult if it pays for retail, eats out, and insists on owning but if it decides to pay wholesale (use Ebay, Craigslist or Freecycle), eat in, and is fine with renting, its quality of life won't have really diminished and is more affordable."
In other words, technology is making income inequality and lower compensation for better work more palatable. Bread and circuses. I don't think anyone disputes that.
So, yes, because of technology our standards of living are better than the past. That isn't really the point, though. The point is income disparity, buying power trends, wealth distribution on a national level, and access to essentials (healthcare, university education) are following trendlines that do not benefit the middle class.
In my deleted post, I mentioned the story of an English professor who mentioned that a modest middle-class home in a London suburb could be bought with 1 year's salary for a starting professor when he started his career in the 60s. That isn't possible today. The average salary for a starting English professor in the U.S. is about $65k--that's hardly a modest middle-class home in most parts of the U.S., let alone Chicago, L.A., or New York.
Then there is the issue of medical care, university education, etc. Yeah, I can read Perez Hilton on my $199 Kindle Fire--woohoo. That doesn't mean I'm living better than my parents who had easy and cheap access to health insurance during their working years--and even cheaper medical care in their golden years.
In other words, technology is making income inequality and lower compensation for better work more palatable. Bread and circuses. I don't think anyone disputes that.
So, yes, because of technology our standards of living are better than the past. That isn't really the point, though. The point is income disparity, buying power trends, wealth distribution on a national level, and access to essentials (healthcare, university education) are following trendlines that do not benefit the middle class.
In my deleted post, I mentioned the story of an English professor who mentioned that a modest middle-class home in a London suburb could be bought with 1 year's salary for a starting professor when he started his career in the 60s. That isn't possible today. The average salary for a starting English professor in the U.S. is about $65k--that's hardly a modest middle-class home in most parts of the U.S., let alone Chicago, L.A., or New York.
Then there is the issue of medical care, university education, etc. Yeah, I can read Perez Hilton on my $199 Kindle Fire--woohoo. That doesn't mean I'm living better than my parents who had easy and cheap access to health insurance during their working years--and even cheaper medical care in their golden years.
The health care cost is a good point and desperately needs to be improved. It seems costs are way up, and they can be crazy compared to other countries.
I was sick 5 years ago (pneumonia!) and had to go to the doctor twice to convince her to prescribe me something (the first time she would only give me an expectorant). When I was younger, with some doctors, I'd go in sick and the doctor would give me a shot of penicillin right there. When I was sick in Mexico I just went straight to the pharmacy and bought a bottle of anti biotics for $2.40. Self-diagnosis issues aside, that healthcare trip was way cheaper, easier, and faster than if I went to a doctor in the US
I was sick 5 years ago (pneumonia!) and had to go to the doctor twice to convince her to prescribe me something (the first time she would only give me an expectorant). When I was younger, with some doctors, I'd go in sick and the doctor would give me a shot of penicillin right there. When I was sick in Mexico I just went straight to the pharmacy and bought a bottle of anti biotics for $2.40. Self-diagnosis issues aside, that healthcare trip was way cheaper, easier, and faster than if I went to a doctor in the US
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Spartan_Warrior
- Posts: 1659
- Joined: Fri Dec 02, 2011 1:24 am
@pooablo: "Sure the middle class may have it more difficult if it pays for retail, eats out, and insists on owning but if it decides to pay wholesale (use Ebay, Craigslist or Freecycle), eat in, and is fine with renting, its quality of life won't have really diminished and is more affordable.
In other words, I am not sure if it is actually more difficult for Generation X/Y to live a middle class lifestyle on a middle class income as compared to the boomers."
What I get from this is: Past generations could live well without sacrifice: buying retail, eating out, and owning property. Current generations can only live well with sacrifice: buying used, eating in, and renting. You're making my point for me.
I don't think the increased technology and access to information has any impact on the brute mathematics of stagnant income and rising cost of living. Like secretwealth says, the former merely provides a pleasant distraction from the latter--and an excuse for the top 5% to continue raking in all the wealth. "Hey, technology has increased efficiency."
@My_Brain: "ERE presents a case that one can be free of this allotment/distribution process..."
Agreed. I am not disputing the effectiveness of ERE. But again, not everyone should have to (or even could without system breakdown) live an ERE-style, low-income lifestyle.
In other words, I am not sure if it is actually more difficult for Generation X/Y to live a middle class lifestyle on a middle class income as compared to the boomers."
What I get from this is: Past generations could live well without sacrifice: buying retail, eating out, and owning property. Current generations can only live well with sacrifice: buying used, eating in, and renting. You're making my point for me.
I don't think the increased technology and access to information has any impact on the brute mathematics of stagnant income and rising cost of living. Like secretwealth says, the former merely provides a pleasant distraction from the latter--and an excuse for the top 5% to continue raking in all the wealth. "Hey, technology has increased efficiency."
@My_Brain: "ERE presents a case that one can be free of this allotment/distribution process..."
Agreed. I am not disputing the effectiveness of ERE. But again, not everyone should have to (or even could without system breakdown) live an ERE-style, low-income lifestyle.
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secretwealth
- Posts: 1948
- Joined: Mon Jun 27, 2011 3:31 am
S_W are obviously on the same wavelength, but I honestly think there is unanimous agreement here--what's different is that many of us are talking at cross purposes or focusing on different goals.
Yes, we're all here because we want financial independence and we see that as a better lifestyle choice than middle class drudgery. However, the numbers don't lie: it is harder to maintain a middle class lifestyle for someone today in their 20s than someone in the 1950s in their 20s. If someone has some math to dispute that, I'd love to see it, because every indicator I have seen is leading me to believe that that is indeed the case.
Yes, we're all here because we want financial independence and we see that as a better lifestyle choice than middle class drudgery. However, the numbers don't lie: it is harder to maintain a middle class lifestyle for someone today in their 20s than someone in the 1950s in their 20s. If someone has some math to dispute that, I'd love to see it, because every indicator I have seen is leading me to believe that that is indeed the case.
@secretwealth
"In my deleted post, I mentioned the story of an English professor who mentioned that a modest middle-class home in a London suburb could be bought with 1 year's salary for a starting professor when he started his career in the 60s. That isn't possible today. The average salary for a starting English professor in the U.S. is about $65k--that's hardly a modest middle-class home in most parts of the U.S., let alone Chicago, L.A., or New York."
I don't see how this proves anything. I have multiple problems with this logic. (1)London versus US - who can say if that is a practical comparison. (2)Are English professors worth anything like they were in the '60's? I've read often how there are soo sooo many more PhDs fighting for professorships compared to 20 years ago, not to mention 50 years ago. This is especially true in the "soft" disciplines (read: liberal arts). I don't think you can interpolate this across the general middle class. (3) There is the obvious issue with what was a middle class home then versus today - they're so different as to make any comparison nonsense. (4) The artifical increase in housing costs due to Fed intervention in the US. When/if that stops you will see prices shrink to more realistic levels.
Given all of this, the story trying to compare housing costs across time simply isn't credible.
"In my deleted post, I mentioned the story of an English professor who mentioned that a modest middle-class home in a London suburb could be bought with 1 year's salary for a starting professor when he started his career in the 60s. That isn't possible today. The average salary for a starting English professor in the U.S. is about $65k--that's hardly a modest middle-class home in most parts of the U.S., let alone Chicago, L.A., or New York."
I don't see how this proves anything. I have multiple problems with this logic. (1)London versus US - who can say if that is a practical comparison. (2)Are English professors worth anything like they were in the '60's? I've read often how there are soo sooo many more PhDs fighting for professorships compared to 20 years ago, not to mention 50 years ago. This is especially true in the "soft" disciplines (read: liberal arts). I don't think you can interpolate this across the general middle class. (3) There is the obvious issue with what was a middle class home then versus today - they're so different as to make any comparison nonsense. (4) The artifical increase in housing costs due to Fed intervention in the US. When/if that stops you will see prices shrink to more realistic levels.
Given all of this, the story trying to compare housing costs across time simply isn't credible.
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secretwealth
- Posts: 1948
- Joined: Mon Jun 27, 2011 3:31 am
"(1)London versus US - who can say if that is a practical comparison."
Having lived in London and the U.S., I can say, yes, it is. You could translate those numbers to Princeton, NJ, Providence, RI, or L.A. and get the same result. I actually once met a professor who retired in the 70s and he lamented how he should have bought a house in Berkeley in the 1960s when he taught there. I think he said it cost less than his annual salary, but I don't remember the details.
"(2)Are English professors worth anything like they were in the '60's? I've read often how there are soo sooo many more PhDs fighting for professorships compared to 20 years ago, not to mention 50 years ago. This is especially true in the "soft" disciplines (read: liberal arts). I don't think you can interpolate this across the general middle class."
Fine--the same applies to professors in the all-hailed "hard" sciences, since the incomes for starting assistant profs. in things such as astronomy, physics, engineering, and economics aren't substantially different from English profs.
I don't understand your points 3 and 4.
Having lived in London and the U.S., I can say, yes, it is. You could translate those numbers to Princeton, NJ, Providence, RI, or L.A. and get the same result. I actually once met a professor who retired in the 70s and he lamented how he should have bought a house in Berkeley in the 1960s when he taught there. I think he said it cost less than his annual salary, but I don't remember the details.
"(2)Are English professors worth anything like they were in the '60's? I've read often how there are soo sooo many more PhDs fighting for professorships compared to 20 years ago, not to mention 50 years ago. This is especially true in the "soft" disciplines (read: liberal arts). I don't think you can interpolate this across the general middle class."
Fine--the same applies to professors in the all-hailed "hard" sciences, since the incomes for starting assistant profs. in things such as astronomy, physics, engineering, and economics aren't substantially different from English profs.
I don't understand your points 3 and 4.
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secretwealth
- Posts: 1948
- Joined: Mon Jun 27, 2011 3:31 am
Here's another great example: the band "Protest the Hero" is crowdsourcing their new album. That's great--more efficient, more personal, cutting out the bloodsucking middlemen. Awesome. But if you donate $400, one of the bandmembers will write a custom song about you or a topic you choose and email it to you.
Granted, this isn't exactly Lady Gaga we're talking about, but this band has had charted records and makes a full-time living from their music. I suppose their market position is comparable to Mott the Hoople from the 70s. Do you think they or any other one-hit wonder from the mid-century would write a custom song to a fan for an inflation-adjusted 400 bucks?
Again, I am not saying we should pity musicians or that this trend is bad or that the days when musicians could make hundreds of millions of dollars should come back. I'm just saying that people in all industries are just getting less money while the cost of things rise. This is math.
Perhaps musicians, like English professors, aren't held in much high esteem in these parts, but these are human beings with real human experiences and the numbers don't lie.
Granted, this isn't exactly Lady Gaga we're talking about, but this band has had charted records and makes a full-time living from their music. I suppose their market position is comparable to Mott the Hoople from the 70s. Do you think they or any other one-hit wonder from the mid-century would write a custom song to a fan for an inflation-adjusted 400 bucks?
Again, I am not saying we should pity musicians or that this trend is bad or that the days when musicians could make hundreds of millions of dollars should come back. I'm just saying that people in all industries are just getting less money while the cost of things rise. This is math.
Perhaps musicians, like English professors, aren't held in much high esteem in these parts, but these are human beings with real human experiences and the numbers don't lie.
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Spartan_Warrior
- Posts: 1659
- Joined: Fri Dec 02, 2011 1:24 am
Hm, well, to be fair, I'm not familiar with the band, but they could just be one of those down-to-Earth, indie or indie-esque "in it for the music" type bands. A lot of music is heading that direction. That offer might be more about giving a (comparably) cheap gift to fans than a "will write song cuz we need money" type situation.
@BennKar: Like I said to Jennypenny earlier, I don't see why we should consider federal interference in housing prices. The fact is the prices are what they are, not what they "should" or "could" be. Moreover, I doubt that interference will end any time soon. The goal is to inflate the currency to the point where the prices "correct" without actually correcting, so the millions of debt-holders won't revolt (same thing that's happening at a national level). So that 500k McMansion will really be worth 500k by the time they're done. It's just 500k will be worth that much less. If that makes any sense.
At this point I agree--and almost said as much earlier--that with few exceptions there's not that much authentic disagreement here; we're just sort of arguing past each other. It is the case that both saving is possible/ERE is effective AND the middle class is being squeezed by higher costs and lower income. I second secretwealth's interest in any factual/mathematical dispute of the latter.
@BennKar: Like I said to Jennypenny earlier, I don't see why we should consider federal interference in housing prices. The fact is the prices are what they are, not what they "should" or "could" be. Moreover, I doubt that interference will end any time soon. The goal is to inflate the currency to the point where the prices "correct" without actually correcting, so the millions of debt-holders won't revolt (same thing that's happening at a national level). So that 500k McMansion will really be worth 500k by the time they're done. It's just 500k will be worth that much less. If that makes any sense.
At this point I agree--and almost said as much earlier--that with few exceptions there's not that much authentic disagreement here; we're just sort of arguing past each other. It is the case that both saving is possible/ERE is effective AND the middle class is being squeezed by higher costs and lower income. I second secretwealth's interest in any factual/mathematical dispute of the latter.
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My_Brain_Gets_Itchy
- Posts: 267
- Joined: Fri Mar 02, 2012 5:29 pm
I don't think we should be pointing to quantifiable stats or math for the be all and end all deciding factor for this discussion.
If you take @Jacob's example for instance, you cannot measure his ability to switch in a very short period of time, being a physicist, to some quant analyst. Both jobs are highly specialized jobs. His academic stream would have given him a very specialized life. I don't think its a far reach to say conclusively that this type of choice or opportunity wasn't there for him 'back then'. If it was, it would have been a 'lot more difficult' to execute this transition. Back then, there was very little job mobility.
The same goes for Mr Money Mustache, who is (was) living it up right now in Hawaii doing work for some someone he barely knew. Again, this opportunity wouldn't have been open to him back then, and if it was, it would have been a 'lot more difficult'.
How do we measure @secretwealth choice/ability to live in Guatemala (which i do find admirable btw)? Again, this opportunity at the very least, would have been a lot more difficult and at the very least fraught with a lot more risk back then.
Higher education was cheaper back then, but they had no internet, and no way to reach a varied captivated audience of potential partners, employers, or teachers.
Opportunities and obstacles wax and wane, there are many variables to this equation.
Its in my opinion, that things have a way of evening themselves out, context is important, and we cannot look at the variables in isolation.
I'd say personally, that if you asked me whether I prefer living in today's society, given all the opportunity and obstacles vs living in the boom time generation, I'd much rather be living today then back then.
If you take @Jacob's example for instance, you cannot measure his ability to switch in a very short period of time, being a physicist, to some quant analyst. Both jobs are highly specialized jobs. His academic stream would have given him a very specialized life. I don't think its a far reach to say conclusively that this type of choice or opportunity wasn't there for him 'back then'. If it was, it would have been a 'lot more difficult' to execute this transition. Back then, there was very little job mobility.
The same goes for Mr Money Mustache, who is (was) living it up right now in Hawaii doing work for some someone he barely knew. Again, this opportunity wouldn't have been open to him back then, and if it was, it would have been a 'lot more difficult'.
How do we measure @secretwealth choice/ability to live in Guatemala (which i do find admirable btw)? Again, this opportunity at the very least, would have been a lot more difficult and at the very least fraught with a lot more risk back then.
Higher education was cheaper back then, but they had no internet, and no way to reach a varied captivated audience of potential partners, employers, or teachers.
Opportunities and obstacles wax and wane, there are many variables to this equation.
Its in my opinion, that things have a way of evening themselves out, context is important, and we cannot look at the variables in isolation.
I'd say personally, that if you asked me whether I prefer living in today's society, given all the opportunity and obstacles vs living in the boom time generation, I'd much rather be living today then back then.
I'm reading through this thread, scratching my head and wondering what "the middle class" is aspiring to that they feel like they either can't have, or can't have without an "unreasonable" level of personal sacrifice.
I agree with Itchy that we are better off than our predecessors, not worse, and that a lot of the middle class whining going on right now is about "needing" a new iPhone and other such First World problems.
I agree with secretwealth that income inequality is more pronounced today than it was a decade or two ago, and I believe that situation if left unchecked on its current trajectory would create a national security problem. However, I don't see that as an issue that hinders my own goals or savings ability. I also don't think that pointing it out in editorial pieces is likely to accomplish much beyond stirring up certain people's victim tendencies. Rather than acting on what they CAN control, some individuals prefer stand around and point out (loudly) what they CAN'T control. That always scares me, because such protests are generally followed by the demand that "the government" do something to "fix it."
I agree with Itchy that we are better off than our predecessors, not worse, and that a lot of the middle class whining going on right now is about "needing" a new iPhone and other such First World problems.
I agree with secretwealth that income inequality is more pronounced today than it was a decade or two ago, and I believe that situation if left unchecked on its current trajectory would create a national security problem. However, I don't see that as an issue that hinders my own goals or savings ability. I also don't think that pointing it out in editorial pieces is likely to accomplish much beyond stirring up certain people's victim tendencies. Rather than acting on what they CAN control, some individuals prefer stand around and point out (loudly) what they CAN'T control. That always scares me, because such protests are generally followed by the demand that "the government" do something to "fix it."
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Spartan_Warrior
- Posts: 1659
- Joined: Fri Dec 02, 2011 1:24 am
@GandK: To put it short, what they're aspiring to is the same lifestyle their parents led. Not living in their parents' basements like half of my generation.
@Itchy: There was less job mobility because it wasn't necessary. Companies took care of employees for their 30 year tenure rather than the hire and fire mentality of today.
There was less ex-patriation because America was still the land of opportunity. People didn't have to retire in countries with reasonable cost of living because America HAD a reasonable cost of living.
Whether or not Jacob could've moved from a physicist position to a quant trading position (a job that typically hires from physicist backgrounds, btw... and also probably didn't exist) is an interesting point, but not even a thought experiment so much as a hypothetical. (I find it quite likely that he could've, because again, Jacob is a highly intelligent individual capable of such adaptation.) I can't really argue against storytelling. Maybe he could've, maybe he couldn't have. That's why I do defer to stats on matters like these. Regardless, ability to change jobs does not strike me as very relevant to ability to save (or ability to retire).
I just fundamentally disagree that it's easier to save now, after thirty years of stagnant income and rampant inflation. That doesn't make sense to me. Is it POSSIBLE to save? Yes. Is it EASY to save? You could make that argument. But EASI-ER? Like I said, I'd need some numbers to ever believe that. It contradicts common sense. Lower incomes and higher costs do not make for easier saving.
I'd rather live in the present for selfish and dumb consumer reasons, like I enjoy video games, high-def TV, and the internet. If I were choosing a time when I as a middle class individual would be at the highest advantage for saving money quickly and living easily financially, I absolutely would choose the boom time of the 50s and 60s. The music was better too.
@Itchy: There was less job mobility because it wasn't necessary. Companies took care of employees for their 30 year tenure rather than the hire and fire mentality of today.
There was less ex-patriation because America was still the land of opportunity. People didn't have to retire in countries with reasonable cost of living because America HAD a reasonable cost of living.
Whether or not Jacob could've moved from a physicist position to a quant trading position (a job that typically hires from physicist backgrounds, btw... and also probably didn't exist) is an interesting point, but not even a thought experiment so much as a hypothetical. (I find it quite likely that he could've, because again, Jacob is a highly intelligent individual capable of such adaptation.) I can't really argue against storytelling. Maybe he could've, maybe he couldn't have. That's why I do defer to stats on matters like these. Regardless, ability to change jobs does not strike me as very relevant to ability to save (or ability to retire).
I just fundamentally disagree that it's easier to save now, after thirty years of stagnant income and rampant inflation. That doesn't make sense to me. Is it POSSIBLE to save? Yes. Is it EASY to save? You could make that argument. But EASI-ER? Like I said, I'd need some numbers to ever believe that. It contradicts common sense. Lower incomes and higher costs do not make for easier saving.
I'd rather live in the present for selfish and dumb consumer reasons, like I enjoy video games, high-def TV, and the internet. If I were choosing a time when I as a middle class individual would be at the highest advantage for saving money quickly and living easily financially, I absolutely would choose the boom time of the 50s and 60s. The music was better too.
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My_Brain_Gets_Itchy
- Posts: 267
- Joined: Fri Mar 02, 2012 5:29 pm
Spartan - You're saying that income is down and prices are up compared to previous generations, but I don't see any evidence of that being true. This is why I posted the charts of inflation-adjusted incomes. Those #s are probably thr best way to compare income to prices. I think the only thing that is debatable about them is whether the CPI is accurate.
If you define enough based on 1) what your slightly more successful peers have, then you will always feel poor (by construction).
If you define enough based on 2) what humans throughout history have had or what the median person in the current world has, etc., then you currently live a life of incredible luxury and comfort.
If you define enough 3) yourself, by determining your own values and aligning your life energy along those values, then you become this badass FI renaissance man.
1) is the norm
2) is a good exercise in being grateful and realizing how ridiculously good we have it
3) is what ERE means to me
PS: as for whether I personally could achieve 3) easier now or in the past, for the things I value it's easier now (technology has helped me more than inflation and growing bureaucracy have hurt me)
If you define enough based on 2) what humans throughout history have had or what the median person in the current world has, etc., then you currently live a life of incredible luxury and comfort.
If you define enough 3) yourself, by determining your own values and aligning your life energy along those values, then you become this badass FI renaissance man.
1) is the norm
2) is a good exercise in being grateful and realizing how ridiculously good we have it
3) is what ERE means to me
PS: as for whether I personally could achieve 3) easier now or in the past, for the things I value it's easier now (technology has helped me more than inflation and growing bureaucracy have hurt me)
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Christopherjart
- Posts: 191
- Joined: Sun Apr 29, 2012 2:03 am
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