How Evolving costs in the US effect life/work strategies (Healthcare, College, homes)

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C40
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How Evolving costs in the US effect life/work strategies (Healthcare, College, homes)

Post by C40 »

I saw an interesting post on reddit today:
https://www.reddit.com/r/dataisbeautifu ... alculated/

Here are the pictures:

1
https://preview.redd.it/lfv67fk4kbd81.j ... ed7d261d8c

2
https://preview.redd.it/g89ilmp4kbd81.j ... b14c0aebc0

3
https://preview.redd.it/3xd0bnv4kbd81.j ... b7d2770c42

5
https://preview.redd.it/pxkf9105kbd81.j ... a92cba1550

Nearly 10 years ago now, I did a study of evolution of costs in the US from the 1950s to 2010s. I saw that some things got cheaper or remained about the same (transportation, electronics, housing in suburban and rural areas, food), but some things got far more expensive (healthcare, college tuition, housing in large cities).

I'll note that the starting point of data on the reddit post (income from a minumum wage job) is not directly relevant to most people here. But the impact of these things that have gotten more expensive are likely to apply to all of use to various extents.

The lesson here, if you want to be financially secure:
  • *HEALTHCARE* Limit your need for healthcare services. Take good care of your health. Be lucky and not born with problems (¯\_(ツ)_/¯ ) While working, have very good insurance. Be safe and don't need much care from the medical industry. With insurance tied to employment, when considering your strategy of work and retirement, employer-provided insurance (if good) now has a larger weight (and thus, a strategy of keeping a job that is 'easy', working low hours, for less money, but more years is becoming a stronger option than before)
  • *SCHOOL* For kids finishing high school, really think and be strategic about career and education choice. We all know this isn't the good old days where grandpa's advice of "walk into the business, find the boss, and look him in the eye confidently when you shake his hand" is no longer enough
  • *HOUSING* Be open-minded about where you live. Housing costs have skyrocketed in many large cities and their suburbs. Living and renting in these areas is a huge money sink. It's possible to profit from owning homes there if the prices continue to rise (but taking profit may require moving to a lower priced area). BUT - prices are still pretty reasonable in much of the US, geographically. In the midwest, in the southeast, in smaller cities, and in most rural areas.
  • *GEOGRAPHIC ARBITRAGE* - This would include living in a high income area (with higher living costs) while earning and saving, and then moving to a lower COL region of the US, or even better financially, a lower COL country. With great internet and remote work, it's now more possible to set up a career earning a U.S. level salary, but live and work in a low COL area. As a personal example, I lived in Vietnam for nearly two years and spent under $10,000 year while splurging a lot. And - I enjoyed living there more than the U.S.
I was going to post this in the thread here where we discussed these things years ago. But that thread is now locked, and is also outdated as the pictures I and others posted are gone, the original article posted is now paywalled, etc.viewtopic.php?t=3164&start=140

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Re: How Evolving costs in the US effect life/work strategies (Healthcare, College, homes)

Post by chenda »

I'd add not owning a car for both financial and physical health.

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Re: How Evolving costs in the US effect life/work strategies (Healthcare, College, homes)

Post by unemployable »

College is a choice. Majoring in something that has a positive rate of return is also a choice.

Also, if you can't escape minimum wage, you're doing work wrong.

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Re: How Evolving costs in the US effect life/work strategies (Healthcare, College, homes)

Post by jacob »

unemployable wrote:
Sun Jan 23, 2022 2:25 pm
College is a choice. Majoring in something that has a positive rate of return is also a choice.
However, at age 17-19 it's not an informed choice. I'll grant that this might have changed over the past couple of decades?! Are idealistic 18 yos now being read the riot act that reading Chaucer for four years is mainly good for serving fries or talking in complete sentences at the native English-speaking insurance-selling call center while complaining about it in grammatically correct sentences on reddit for the next very many years?
unemployable wrote:
Sun Jan 23, 2022 2:25 pm
Also, if you can't escape minimum wage, you're doing work wrong.
Sort of yes slash but maybe not, at least from a US perspective. Lots of first-world youngsters now find themselves in global competition (the average "degree" of the world is now around middle high school (11ish years of schooling) compared to the average American degree of a half-finished associates degree (12.5 years of schooling)) but acting on the expectations of the generations of their parents and grandparents that "showing up with a college degree" is a sufficient condition for success in this world. Only the world has changed a lot.

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Re: How Evolving costs in the US effect life/work strategies (Healthcare, College, homes)

Post by Ego »

I would add:
  • Exploit Loopholes and/or Circumvent Boomer Systems Entirely. The rules were changed by Boomers to enrich themselves while passing the costs on to future generations. Find ways to achieve things while exploiting their rules or better yet playing a different game entirely. They use guilt - their specialty - to force new entrants to play their games and they use it to enforce adherence to their rules. Make oneself impervious to their guilt.

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Re: How Evolving costs in the US effect life/work strategies (Healthcare, College, homes)

Post by WFJ »

Random thoughts:

College costs have not increased, but who pays for the degree has dramatically changed. Every state is different, but roughly 25 years ago, the state would cover 80% of the cost and tuition would cover the other 20%. Today, the state will cover 20% and tuition will cover 80%. Assume the full cost of a degree was $10,000 year, in 1995 the tuition would have been $2000 and today $8000 and when inflation is included, roughly the cost of a tuition today. The "inflation" in education is a shift from the state to the individual with the help of Federal loans (Obama).

It is easier to be an informed college student today than at any point in time. I remember taking a personality test in high school, late 80's, that identified me as an actuary. I'd never heard of the word, had to find a dictionary to look it up and then had to spend a weekend at a library finding the two Universities that offered actuary degrees (didn't attend as they were in cold Ivy league Universities, but ended up in this field any way- deterministic).

Quality of healthcare has significantly increased faster than the cost. I've had several conditions that would have been life altering in my parent's generation, which were unpleasant, but easily recovered from for me.

Eating cheap food is one of the most expensive things a person can do.

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Re: How Evolving costs in the US effect life/work strategies (Healthcare, College, homes)

Post by jacob »

WFJ wrote:
Sun Jan 23, 2022 4:09 pm
It is easier to be an informed college student today than at any point in time.
Technically yes. For the time being and as long as "first world" people still complain about struggling making it above $10000/year, I mainly see this as a problem of "fixing stupid". The problem with that lies in convincing people of "the error of their ways". Very many people remain clueless in terms of knowing what they don't know. What's the way forward in that case?

Here's the intersubjective wall:
Tolstoy wrote: The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of doubt, what is laid before him.

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Re: How Evolving costs in the US effect life/work strategies (Healthcare, College, homes)

Post by theanimal »

Ego wrote:
Sun Jan 23, 2022 4:02 pm
Exploit Loopholes and/or Circumvent Boomer Systems Entirely.
What systems do you have in mind?

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Re: How Evolving costs in the US effect life/work strategies (Healthcare, College, homes)

Post by chenda »

@jacob - I think this might be partially a western cultural weakness which emphasisis individuality over respect for authority and expertise. This may well have an upside too but means there is a reluctance to force people to do things for their own good.

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Re: How Evolving costs in the US effect life/work strategies (Healthcare, College, homes)

Post by jacob »

chenda wrote:
Sun Jan 23, 2022 5:37 pm
@jacob - I think this might be partially a western cultural weakness which emphasisis individuality over respect for authority and expertise. This may well have an upside too but means there is a reluctance to force people to do things for their own good.
If I may rephrase this...

There's a [western?] tendency (to the point of sewerage) that emphasizes respecting individual choice and opinion (SD orange or green) to the point of ignoring the resulting community or systemic side-effects.

I think navigation is an incredibly delicate balance. Technically, the world-problem is frustratingly easy. Culturally, it's nearly unpossible. (This may reflect the fact that I'm good at tech and bad at people in which case the problem is one is bridging understanding... Work-in-progress.).

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Re: How Evolving costs in the US effect life/work strategies (Healthcare, College, homes)

Post by unemployable »

jacob wrote:
Sun Jan 23, 2022 3:51 pm
However, at age 17-19 it's not an informed choice.
Then they shouldn't be choosing it, or coerced into choosing it. I grant we as a society have a lot of this the wrong way around. This includes employers requiring 4-year degrees for jobs that don't need them.

Sort of yes slash but maybe not, at least from a US perspective. Lots of first-world youngsters now find themselves in global competition
I think this overestimates the extent to which cross-border competition for jobs exists. Most jobs aren't being outsourced to the third world. Otherwise if you're Google or Facebook, much less some smaller IT firm maintaining servers or whatever, why hire Americans at all? That whole "is programming saturated" thread... no one seems to be worrying about this.

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Re: How Evolving costs in the US effect life/work strategies (Healthcare, College, homes)

Post by Scott 2 »

I wonder how the charts change if they use:

1. Median income
2. Comparable baskets

I share the author's sentiment and agree with C40's lessons. However, the data presentation strikes me as leading. Per capita GDP has grown since 1975 - people consume more. The strategy around minimum wage changed. I bet those factors go a long way to explain the plots.


The most interesting lesson IMO - per capita real consumption increases over time. Even if minimum wage had kept up with inflation - that only means you can consume today's basket of goods tomorrow. When retirement spans 40 years - the strategy leaves you far behind. Part 9 of this article discusses it:

https://earlyretirementnow.com/2022/01/ ... s-part-50/

An early retiree needs to account for consumption growth. Since quality of life is often a relative comparison, planning to do without is a losing strategy. A conservative SWR and ongoing skill accrual can mitigate this risk.


While I agree with lessons C40 posted, I don't judge those who fail to apply them. Individual circumstances can make doing so effectively impossible. This came up in the thread on Maid by Stephanie Land:

viewtopic.php?t=11681

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Re: How Evolving costs in the US effect life/work strategies (Healthcare, College, homes)

Post by guitarplayer »

theanimal wrote:
Sun Jan 23, 2022 5:16 pm
What systems do you have in mind?
Yes @Ego, and ideally in the form of references to resources: books, authors etc.

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Re: How Evolving costs in the US effect life/work strategies (Healthcare, College, homes)

Post by Ego »

Ego wrote:
Sun Jan 23, 2022 4:02 pm
Exploit Loopholes and/or Circumvent Boomer Systems Entirely.
theanimal wrote:
Sun Jan 23, 2022 5:16 pm
What systems do you have in mind?
Structurally DAOS could severely alter or supplant the corporations that Boomer retirement plans (like those that require 16% ROI to cover underfunding) are based . They have the potential to change the nature of work and even governance. In the near term they could cherry-pick the young and healthy by offering low cost catastrophic coverage while leaving everyone else to the legacy systems. That same dynamic is possible in every sector that Boomers underfunded or overpromised themselves. Those silly NFTs are proof of concept experiments that work. The next stages will be interesting.
https://future.a16z.com/the-future-of-w ... -networks/

More broadly, I avoid following their examples because they have become experts at putting lipstick on a pig. Somehow they still believe that their multiple divorces, unhealthy lifestyles and psychologically instability can somehow be soothed by their big empty houses with beautiful facades in nice neighborhoods and cool cars in the driveways. I guess I have disdain for those who have existed six decades and haven't yet figured out that the most important things in life cannot be bought, coerced, duped or outright stolen.

I wonder if stories like these will become the norm before too long.
https://www.freep.com/story/news/local/ ... 569188001/

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Re: How Evolving costs in the US effect life/work strategies (Healthcare, College, homes)

Post by WFJ »

theanimal wrote:
Sun Jan 23, 2022 5:16 pm
What systems do you have in mind?
IMHO: education, McMansions, tax avoidance are all areas where one could exploit the inefficiencies of the "Boomer System".

Education has become a monopoly without competition.

Converting McMansions into some kind of mixed-use living structures could develop in the future, exploiting these monstrosities. My father (end of silent generation) grew up in a 900 sq ft house a block from the CEO of the largest public corporation in the state, a 1500 sq ft monstrosity, by the standards of the day. Mother (oldest boomer) grew up in an adobe self-built house a few blocks away.

The few boomers that have accumulated assets throughout the ridiculous 20-year bull run will eventually pass these assets to less capable hands and some assistance will be required.

Systems persist much longer than anyone can predict, and a good life strategy is to identify and exploit these advantages.

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Re: How Evolving costs in the US effect life/work strategies (Healthcare, College, homes)

Post by WFJ »

Ego wrote:
Mon Jan 24, 2022 3:45 pm
Structurally DAOS could severely alter or supplant the corporations that Boomer retirement plans (like those that require 16% ROI to cover underfunding) are based . They have the potential to change the nature of work and even governance. In the near term they could cherry-pick the young and healthy by offering low cost catastrophic coverage while leaving everyone else to the legacy systems. That same dynamic is possible in every sector that Boomers underfunded or overpromised themselves. Those silly NFTs are proof of concept experiments that work. The next stages will be interesting.
https://future.a16z.com/the-future-of-w ... -networks/

More broadly, I avoid following their examples because they have become experts at putting lipstick on a pig. Somehow they still believe that their multiple divorces, unhealthy lifestyles and psychologically instability can somehow be soothed by their big empty houses with beautiful facades in nice neighborhoods and cool cars in the driveways. I guess I have disdain for those who have existed six decades and haven't yet figured out that the most important things in life cannot be bought, coerced, duped or outright stolen.

I wonder if stories like these will become the norm before too long.
https://www.freep.com/story/news/local/ ... 569188001/
Never heard of DAOS, but after a brief reading, this assumes people are all intelligent and can structure their own work responsibly. One reasons corporations are successful is they provide simple instructions the vast majority of the population can follow. The few people that are too intelligent not to be annoyed by the simplicity of the job either create their own corporations or exploit inefficiencies in the systems. I would estimate this is less than 1% of the population, but greater than 50% of the population would identify themselves as being in the 1%. An outside entity, like a corporation, would need to organize these people in the correct roles.

Using a simplistic measure of population intelligence leaves one wondering where these intelligent people who run DAOS will come from. First link is a list of free books provided by the Guttenberg project.

https://www.gutenberg.org/ebooks/search ... =downloads

The second link is the most popular YT videos.

https://www.statista.com/statistics/249 ... eos-views/

To be successful, DAOS will have to appeal and be utilized by the HUGE magnitude of the YT crowd.

I would hypothesize a vase majority of people in the Guttenberg group can navigate the modern world with ease and benefit greatly from any system design. The much larger group in the YT population need the simplistic design of a corporation to exist. I believe that DAOS, and all crypto/NFT are adopted by the 50% of people who think they are 1% but are far from the top 10%.

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Re: How Evolving costs in the US effect life/work strategies (Healthcare, College, homes)

Post by 7Wannabe5 »

@WFJ:

Weird comparison given that “Baby Shark” is mostly popular with the 2-6 year old crowd.

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Re: How Evolving costs in the US effect life/work strategies (Healthcare, College, homes)

Post by C40 »

Ego wrote:
Mon Jan 24, 2022 3:45 pm
have disdain for those who have existed six decades and haven't yet figured out that the most important things in life cannot be bought, coerced, duped or outright stolen.
!!!! This sums up the huge disappointment I've had growing in me about the failures of modern society. Then you add that so many of the next generations (Gen-X and Millennials) buy in to the idea that we can out-invent our problems. ("We can just Nuke mars to make a new earth")

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Re: How Evolving costs in the US effect life/work strategies (Healthcare, College, homes)

Post by jacob »

C40 wrote:
Tue Jan 25, 2022 12:53 pm
!!!! This sums up the huge disappointment I've had growing in me about the failures of modern society. Then you add that so many of the next generations (Gen-X and Millennials) buy in to the idea that we can out-invent our problems. ("We can just Nuke mars to make a new earth")
Methinks that problem is due to modernism which is mostly focused on win-lose solution to win-problems.
viewtopic.php?p=253405#p253405

It's a Kegan3.5 problem and this is basically where the average of humanity finds itself.

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Re: How Evolving costs in the US effect life/work strategies (Healthcare, College, homes)

Post by WFJ »

7Wannabe5 wrote:
Tue Jan 25, 2022 10:32 am
@WFJ:

Weird comparison given that “Baby Shark” is mostly popular with the 2-6 year old crowd.
Removing children's video does not change the comparison much. Thousands of downloads for resources that require thought and billions of downloads for resources that don't. Systems (corporations organized for profit) have to utilize these people in some kind in order to function. Crypto/smart contracts assume well over 50% of the population are intelligent enough to self identify their abilities and find a roll in thinly defined organizations.

When Charles Murray could give a speech without getting shouted down by fascists, he would share a story that many people would get angry when pointing out that half the students in school were below average and expecting them to become coders or engineers was ludicrous. He would lament that identifying that half the students in school were below average would result in major pushback from teachers, administrators and politicians (who were probably in the below average group).

My personal strategy is to navigate the existing systems to my benefit and ignore all the utopian chatter. For example, I think ACA is a terrible idea, but as soon as I resign, I'll sign up for ACA.

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