“There’s this wild disconnect between what people are experiencing and what economists are experiencing,” says Nikki Cimino, a recruiter in Denver.
Yep. That’s the truth. I didn’t even feel like I was treading water until my late 40s and we were making decent money by any standard. A mortgage, a single car payment, all the insurances (family health, dental, home, car) you need to pay for, data connections (we don’t have cable tv), taxes (FSaLT), and skimming money off the top for a 401k and there’s very little left. Especially with the all the rising prices of groceries (our bill feels like it’s almost doubled) and being subscription-fee’d to death.
To anyone struggling in the USA and wondering how to possibly get out, just live like Congress and become rich. Then, money problems are way easier to handle. If you have as much money as a Congressman, you will be equally as unconcerned with them as to the state of our union and you will be able to say things are great with a straight face.
Not even.
All you really need is wealthy parents. That way you never have to have any debt and get exploited by the credit system and can live your life glib and clueless and wondering why other people are so lazy and poor and didn’t work hard like you.
I dunno. Congressional salary really is still in the rage of “Middle Class”, though definitely at the higher end of that. These people were wealthy or connected, for the most part, before getting into office. People who are barely getting by don’t quit their jobs for political campaigns.
Congress members don’t make enough to be rich without taking bribes. They make $174k/year in 2024, which is equivalent to $75k/year in 1990. The only wages that haven’t dropped due to inflation are CEO and other C-suites.
And some are rich because of government money through contracts or handouts.
That’s why you can’t just look at their salary, the real money is in lobbyists and stock market betting prior to rolling out industry wide changes.
Congress members don’t make enough to be rich without taking bribes.
That’s why so many of them take bribes :)
Exactly, just do a lot of insider trading and live the good life.
Hard part is being rich first. New money goes to jail before old money
“We had more money when Trump was president,” she said, noting that three years ago her credit card debt was less than half of what it is now.
Oh boy, that’s gonna upset some people.
I had dinner with my mom last night. She told me she made $2.20/hr as a waitress in 1972. Not including tips.
That’s the equivalent of over $16/hr now.
The boomers have no idea how lucky they were. And they fucking wasted it.
Median waiter salary in USA seems to be $15/hr currently. Did you think it was significantly less? There are large differences in the median between states. Where did she work?
Reminder that 15/hr was the goal about ten years ago and inflation spiked hard between 2020-2023. 15/hr is no longer a “generous” wage.
$15/hr with tips included, maybe. That’s why I specified that the $16/hr equivalent from 1972 did not include tips.
I don’t think tips are included in official salary figures? Are they?
Depends. Provide a link to your source and someone might be able to tell you.
Couple of my friends were servers at their family’s resturaunt growing up (early 2000s) and I think they only made about 2 and some change before tips. 30 year difference from your example and their wages were roughly the same amount. It’s ridiculous.
Livable wage is now more like $30.
Sure. But was ~$3/hr a livable wage in 1976?
Servers in most of America make $2.13 an hour plus tips. Id say depending on COL, anywhere from $12/hr at shitholes to $30+/hr at nice spots or high COL
$15/hr seems like a decent number, considering most servers will not claim cash tips. considering lack of cash these days compared to credit usage, id say $20-25/hr is a decent average.
But again, the other commenter said that $2.20 was WITHOUT tips, so certainly the 1972 waittress made more still
Not even close. Server wage is like $3 in some states. Stop lyin
You may need to look up the meaning of the word “median”.
You might need to look up some actual data instead of making things up.
Actual data is exactly what I was basing this on.
I’m seeing multiple numbers
$10 here https://www.salary.com/research/salary/alternate/waiter-hourly-wages
$14 here, but also some are paid just $2/h and are expected to make the rest they need from tips: https://en.as.com/latest_news/how-much-does-a-waiter-in-the-us-earn-per-hour-what-is-the-average-salary-n/
As much as you complain about the boomers, the current generation(s) are the ones you need to pay attention when it comes to who’s caused the house shortage because of unchecked capitalism. There’s more than enough houses that should house everyone for cheap.
You cannot blame boomers for the smouldering wreck that Airbnb left behind. That was the work of a millennial. Take some responsibility for yourselves and your own actions that have attributed to the current state of society that you live in.
Wtf even does “the current generations” mean? Whenever people say “the newer generation” or “the young generation” or something they just sound so fucking incompetent.
As is blaming boomers when the world is not run by just that one generation. The most successful billionaires today are made up from genx and millennials.
So making it a generation war just when it’s pointed at boomers is just stupid and incompetent for an argument.
And worse: the home buying age isn’t 19, it’s more like 30 - 40.
Being over 40 doesn’t make you a boomer.
My guy, air bnb didn’t cause the shortage or even significantly make it worse. It’s the mega corps that literally own hundreds of thousands of homes across the US and just rent them out. I’m not even upset at boomers who own 3 or 4 rental properties and I work with a lot of them. It’s always mega corps fucking it up for the rest of us.
Megacorps aren’t in general ‘boomers’
mega corps span all the recent generations.
And fuck off with this ‘my guy’ bullshit you sexist, condescending git.
LOL you really believe that “a millenial” created AirBNB and not some conglomerate of venture capitalists funneling billions at a team made up of people of all ages?
No shit. So you agree It’s not just boomers. Now go get mad at the OP for spawning this stupid nonsense argument in the first place. Go on and grow that attention span.
Seems you think that I am responsible for your anger. Weird.
Seems you think everyone is responsible for you aside from you
Housing was wildly expensive and rising incredibly fast before Airbnb was invented (company started in 2008, which you might recognize as an important year for the real estate market). After 2008, tons of investors came in to buy up the depressed value properties to either flip or rent out or just hold onto until the value returned. People buying houses with cash isn’t something Airbnb caused. Corporations buying up houses to rent isn’t something Airbnb caused. Foreign investors buying up houses to get their money out of their country isn’t something Airbnb caused.
Airbnb invented a way to make money off of housing by taking houses away from people. Entire blocks will be bought by a company just to use as an Airbnb hence why a lot of stipulations have been recently coming in to prevent a ‘housing shortage’ while there’s enough housing.
So yes, Airbnb did a lot of damage there when it comes to ‘who can we pin ideas on’ blame which we love to do so much to boomers.
Waiters today make $2.13 an hour in my state.
They weren’t lucky. They voted for people that removed all the guardrails that enabled their success.
Not mutually exclusive.
They had too. They couldn’t get rich if they had to pay workers what they were paid when they were starting out.
I agree. I still think they were lucky insofar as they were born in the right place at the right time to benefit massively over future generations.
This is the important detail. Europe was destroyed and the USA was able to flourish. Opportunities existed that will likely never exist again. Capitalism has never been as great as it was in the USA post-WWII.
Ah, but the USA post-WWIII will be even better! Or at least growth capitalism suggests it will.
America was basically the only industrialized country that hadn’t been bombed to fuck. You had to be a clown to not succeed in that environment (or systemically oppressed, since opportunity in the US is always only for white people). Boomers took quality jobs making reliable products and moved those to low wage jobs making disposable products in China.
Few people in that period had the information you have now. People were presented with this economic miracle in the 50s and there was little to no component other than conformity.
As more time has passed and I continually re-assess my Boomer parents, I am struck more and more that they truly were a propagandized generation who was never given the tools to properly think through what they were seeing. It was always just “here, more, buy this, this technology is new and amazing”. Everything was new year after year until the late 80s/early 90s, when technology evened out. Even then people had cell phones and such. Once met with the Internet, especially through Facebook, we could see all of their problems flourish.
Not to say that any generation is better than any other or not, but I do believe that each generation after Boomers is actually much better than the previous one at critical thinking–probably because society had no choice but to and the fact that more people have at least a bachelors degree now.
Bachelor’s degrees and unleaded fuel make a hell of a difference.
Isn’t Denver an expensive city? Buying doesn’t mean instant low monthly payments. You gotta sit on that crap for ten years.
Honest work: You make just enough to live on until its not enough and then you’re homeless
Scams and grifting: You make possibly lots of money then maybe get sent to jail which is where the courts are gearing up to send homeless people anyway.
Consider the possibility that, first and given the political importance they have in the present day, the official numbers that the Economists are using are less than honest.
Also, I know that some countries don’t include Housing Inflation - which is huge* - in their Official Inflation. Is that also the case in the US?
Last but not least, there is the whole difference between what is usually reported to us by Politicians, Economists and the Press, which is either country totals (which grow up merelly by the population growing) or the mean average (i.e. adding all values and dividing by the total number of points) which suffers from the “if a man has 10 chickens and 9 others have none, each has in average 1 chicken even though most have none” problem, and the mode (the value around which most cases are found) which is far more representative of most people’s experiences: if for example the wealth increases from higher productivity are going entirelly to a few people who just get ever more filthy rich whilst the many have either stagnated or, worse, are getting a bit poorer due to inflation eating up the true value of their pay, the grand total will be growing, as will the average (if the population numbers are steady) but the mode will have stagnated or even be falling, matching the experience of most people - people get to hear about country GDP growing and even GPD-per-capita growing all the while the vast majority see not growth at all, maybe even a falling of their purchasing power (the latter for sure for any who don’t already own their house).
Apparently inflation went down bigly in the 1980s when they decided to stop counting the cost of housing. NPR last week had a report about people advocating to put that back in so that we can have a better idea of what is going on.
Been arguing for years that the Mode is far more representative of the common person’s experience than Mean or Median. Most ppl don’t remember that Mode even exists.
I’ve never understood why median is a useful metric.
All three should be reported, along with raw data. Maybe it’s available somewhere, I haven’t looked.
So it isn’t just me. My spouse and I bring in together $250000 (before taxes), we own a house and we are living paycheck to paycheck. One factor of many why I chose to move to another country. The only good thing is that once I sell the house I will be able to pay off all my debts because of how much the price of the house gone up.
I’m sorry, but if you’re making $250,000 and you’re living paycheck to paycheck, your consumption if just too high, and you need to make cuts. In most countries, including the United States, you can live very comfortably on a $250,000 salary and reasonable spending.
Most of my expense, other than taxes, are healthcare costs. I know of no way I can reduce how often my family needs healthcare, and I have thousands of dollars in healthcare debt still not paid. We rarely travel, rarely eat out, and rarely splurge. Maybe there is some way to squeeze our belts even tighter and make it work.
It is easier to just move to a country with more affordable healthcare. 12 years ago when I met Americans living and working in Japan I didn’t believe them when they said they were better off in Japan making less money than in the US because of how expensive healthcare is in the US. Now I regret not believing them. My family’s healthcare costs grew faster than our incomes.
I’m in the same boat, single income just under $200k, but my savings has stagnated the past three years due to medical bills (wife was hospitalized and is now disabled).
Debt is beginning to pile up and it seems like the only real option is to start cherry picking the more important medical expenses to keep up on and letting the others slide (like the $26k hospital bill).
At the current rate things are going, I’ll have no savings and no college fund for my kid along with a stack of unpaid medical bills and needing to downsize to a cheaper home in a worse neighborhood. At least our only car is paid off end of the year and should hold up as long as the last one (made it 12 years, 220k miles).
Living that American dream.
I see. I’m sorry about the healthcare expenses. That makes more sense. The US healthcare system is truly predatory and awful in just about every way. Vote for people who want to change it.
The ACA should have had a single payer option. I also believe the US government should run public hospitals and have a national generic drug company.
The person mentions medical bills, but I largely agree. If most people can live somewhere in the $50 - $75k range, than this person can live at $250k by making adjustments. A lot of this sort of trouble comes because of scale. You can’t fathom making so much money or what that means and you are likely to spend it without knowing precisely how much or what it means.
250k is a top 1% income level. There are some you problems in that math.
250k is not top 1%
Lololol, get bent with this woe is me crap
What do you aspire to achieve with this toxicity?
Every year the value of our money goes down because the government keeps printing more of it like its a cocaine addiction.
Unless you’re getting huge raises every year you’re never going to get ahead, and if you’re getting nothing, you’re actually losing money.
Exactly. A 3% rise when inflation is 8% is effectively a paycut.
It’s way worse than that.
I suggest you go read the paper entitled “Money making in the modern economy” from the Bank Of England, but I’ll summarize it here:
- In the modern economy money is almost entirelly numbers in computers and most of it is created by banks when they extend loans (they literally create that money right then and there as two entries in two ledgers, one a credit on the account of the lendee an another a debit on a special account of the bank saying that they are missing that much money).
The “good” old days when all the money was created by governments has been gone since the 90s and the advent of digital account keeping and digital money transfers. A banking license is de facto a license to print money, though within certain conditions, with central banks somewhat limiting that money creation by imposing reserve ratios on banks (i.e. money that they do have to put aside against those outstanding loans) which can be as little as 2% of the outstanding amount.
90s and the advent of digital account keeping and digital money transfers
Digital account keeping has been a thing since the 1950’s. And doing it on a computer didn’t change that all banks lent out more than they had. It’s the premise of the movie It’s a Wonderful Life. Bank runs were a thing for as long as banks have existed.
There’s a lot more to it than just that (such as, how do banks settle interbank transfers or even things like how the end of the gold standard paved the way for it) but I didn’t want to complicate the explanation with too much details, though the main difference is the widespread use of digital transfers, especially by consumers which actually dates back a bit further than the 90s but definitelly not all the way to the 50s.
If you really want to know it in depth, I recommend you read the paper I pointed which is here. (By the way, I got the name slightly wrong: it’s “Money creation in the modern economy”)
Digital transfers are not necessary for banks to loan money. As your link says, it’s the loan, which gives money to a business or consumer that the bank doesn’t physically have, that creates money.
Electronic fund transfers and ATM’s started in the 1960’s. Nasdaq the first completely computerized exchange (no people involved) started in 1971.
Digital transfers are now the dominat way for money to be exchanged in trades, replacing mainly cash, i.e. the coins and currency that can only be made by the Mint.
The less people use cash to pay, the less the cash withdrawls from the banks, the less the banks need to procure cash - in a world world were payments are almost all done via payment orders, typically digital, the banks only need to procure cash for periodic settlement of the differences in payments between them: for example, if person 1 does an electronic transfer of $1000 from their account in bank A to person 2’s account in bank B and person 3 does an electronic transfer of $900 from his account in bank B to person 4’s account in bank A, all that bank A has to procure to settle the difference is $100 and bank B nothing at all, even though $1900 changed hands between various otherwise unrelated parties. If they were cash transfers, bank A would have to get $1000 in notes and coins from the mint (to give to person 1) and bank B would have to get $900 (to give to person 3). Now imagine this times hundreds of thousands fold of transactions a day and you can see how much money can change hands without the banks having to get the actual coins and notes (or treasuries and so on: the stuff they can’t produce) that ultimatelly would come from the government.
This is also possible with cheques, but it was the widespread use of electronic transfers, namelly electronic payment methods, that really reduced the need for banks to procure actual money tokens that they can’t legally make themselves, such as cash.
It wasn’t the invention of electronic transfers that made this happen (as I said, cheques also enable a similar thing), it was its widespread use - replacing most cash transactions out there - that made this mechanism become dominant over the traditional one were banks needed to get cash in as deposits so that they could give cash out as withdrawals that then were used by people and businesses for payments and came back on the other side as deposits.
Without such a high need to provide cash to their customers, banks can have a much higher percentage of IOUs (in the form of mere numbers in computers) to cash than before only requiring cash (and ither such forms of money such a treasury certificates) for the periodic settlement of the pending differences between banks of inflows minus outflows, ad per my example above.
namelly electronic payment methods
People don’t venmo at grocery store checkout. It’s all credit cards. The credit card craze started in the 60’s which unsurprisingly coincided with banks switching to eft’s.
This is false and understanding why it’s false is important in order for us to be able to do the right choices which allow us to both keep inflation in check and avoid pointless deep recessions or depressions. You can find a decent overview here. Creating money (multiple ways, check video) is required for a growing economy to keep prices stable (inflation close to 0). This isn’t new either. It was done even in ancient Greece with silver as it is easy to see the need for it once you have all the variables in front of you. The problem isn’t with money creation per se, it’s with the amount but most importantly its distribution. Where does it go. Does it go towards the creation of an additional bag of chip which we have little real constraint to do, or does it go towards a house in an area where there’s bidding wars for houses and no new houses can be built.
Unless you’re getting huge raises every year you’re never going to get ahead, and if you’re getting nothing, you’re actually losing money.
Also if you’re getting raises below the cost of living increase (which most people are), you’re losing money. If you get laid off, which hundreds of thousands of tech workers are, you’re definitely losing money. It’s not a great time right now.
Inflation is hitting people hard. And it’s happening globally not just in the USA.
Last night I ordered some food and the delivery agent told me she is living in her car because people are not tipping well and she can’t afford rent anymore. Paid for her stay in a motel for now.
Something tells me they pay for a lot of things they don’t need.
Gary Stevenson explains why this is, and why it’s not gonna get better anytime soon.
This video is great. He put into words what I’ve been suspecting for a couple months now. He predicts asset/housing prices will continue increasing while living standards stay terrible and he thinks they’ll get worse. I think he’s absolutely correct. A better quality of life is being gatekept by the wealthy.
Great channel!
I like the implication that economists aren’t people
There’s a term for this, HENRY. High Earner, Not Rich Yet. The lie is the “Yet”. Millennials and Gen Xers have been struggling to reach the middle class that is kept perpetually out of reach. They have given up on the idea of financial solvency and are going into debt to indulge in luxuries like having children, going on vacations, and living somewhere that isn’t a complete shithole. Saving for retirement is as realistic as training to live on Mars, so why bother? Keep digging a financial hole and then lie down and die in it.
What most people don’t realize is that once you have excess income, you have options. What you do with the excess is what matters. If you don’t save and invest it, you’ll be living paycheck to paycheck for the rest of your life.
A lot of folks think being rich means just spending money on whatever you want. That’s not really the case. If you spend the excess on fancy cars or luxury items that make others think you’re rich, the irony is you’ll be working for a long time and never actually become financially independent.
The problem is that for many folks the amount they are making isn’t enough for them to live a very reasonable life AND they have nothing to invest in the first place. Suppose a household in a given area needs $100,000 to afford a VERY modest house in that area, health insurance, savings, healthy food etc. Now suppose the house has one disabled breadwinner and one fellow working for $40,000.
Because of this they live in shit town in a tiny apartment a building full of drug addicts in a not so great part of the state wherein the average life expectancy is about 10 years less than one of the good parts of the country.
The first 40k of “excess” would be spent on having a decent life, working a sane number of hours, moving into an actual home. For fully half the country the idea of having excess is laughable. It’s a crass joke.
Most areas don’t need $100,000 a year to afford a “very modest house”, you could get a nice mobile home and afford to pay off the loan in just a couple years.
Lets define “most”. Herein I define most as the area immediately surrounding the majority of people. 70% of people live in urban areas not out in bum fuck.
I live in a small city of 50,000 in Washington. A house around here starts at about 400k. I would have to pay about 3100 per month including taxes and insurance. I would take home about 6500 per month after taxes if I made 100k. At current interest rates I would need to spend 3100 per month to service such a loan.or about 47% of my take home pay. It is difficult to see how I could afford a home with a household not individual of less than 100,000.
Adjacent to me is a much bigger city with about 20x the jobs and opportunities. I would need more like 900k to buy into there. Realistically to afford a home there we are talking about my household making more than 200k. Why so much? Because housing has got very expensive and interest is very high.
A ton of urban areas have much options cheaper than the west coast though, mobile homes, townhouses, duplexes, etc. $400,000 is much more than a very modest house. For example I would consider a shotgun house very modest, and short of very high income areas they’re usually much less than $400,000
Cheaper places are cheaper for a reason. Worse health care. Worse education for your kids. Worse life expectancy. Worse Opportunity. For instance St Louis has a median home price of 207k but they also have 10x the murder rate of Seattle a worse jobs outlook. You’ll make less money etc.
Who in their right mind would want to live in a red state?
Cheaper places are cheaper for a reason.
Yes, and I agree I prefer higher density, but ultimately some people living in less desirable areas is more reasonable than trying to build ever taller skyscrapers in city centers- in a country with massive amounts of empty land.
Worse health care.
It depends, there are plenty of cheaper cities with very good healthcare, I grew up in Louisville, KY, spent a lot of time in LA, CA, and now live in Prague, CZ. Louisville has had the cheapest rent/purchase price and had by far the best quality healthcare(at least that I and my family received) out of anywhere I’ve lived.
Worse education for your kids.
This is valid in some cases, and there are plenty of valid reasons to desire living somewhere else more, that doesn’t mean there aren’t costs to that. Furthermore, there are plenty of expensive places with terrible school systems, plenty of cheap places with passable school systems, but more importantly traditional schools systems in general suck. Kids now days have access to the internet, that combined with parents who encourage curiosity and creativity will be much more important to them learning than the school system they go to.
For instance St Louis has a median home price of 207k but they also have 10x the murder rate of Seattle a worse jobs outlook.
That is cherrypicking, compare Chicago to Fargo, ND. Or a less distant example, Seattle to Spokane.
You’ll make less money etc.
Assuming you don’t work remotely, but you’ll also spend less.
Who in their right mind would want to live in a red state?
Not about being red or blue, its about not being a HCOL megalopolis. You can also move to Maine.
the areas where most people live, however, do.
nobody wants to live in trailer park in Mobile, AL.
Why not?
Everybody wants everything at no cost. That’s not how the world works, though. If you earn $X a month and want to save some of it as a long-term investment, you simply cannot spend $X a month. You can’t have both.
There are indeed some people who have no choice but to spend $X a month, their basic expenses just can’t go any lower without literally ending up on the street or straight up dying. Those people do have a real problem and I sympathize with them.
People who say “I want to save money but I also want to live in the nicest possible house in the nicest possible neighborhood” I have less sympathy with, because they have a choice. I face that choice myself and instead of griping about how I can’t have everything I want with no sacrifice I just go ahead and make the choice. I don’t spend all my money each month, and as a result I don’t take vacations as nice as I could take and I don’t have as nice a car as I could have. But in exchange for that I’ve got plenty of savings built up.
My SO has a medical condition that limits her income. I’m in academia, so I don’t make much and work crazy hours. We get to have happy day to day, and save money to invest by renting a shity apartment. As in, my investment account is worth more than that of some friends in software development, cus they wanted to live in good apartments.
It doesn’t matter that average life expectancy is 10 years shorter. It matters why. Are people randomly getting murdered or constantly exposed to high air pollution? Don’t live there. Is it shorter cus they are mostly stupid fucks that eat shity food and their only hobby is smoking on the bench below the building? You can live there fine, those are my neighboors. Doesn’t stop me from eating healthy home made food, staying in shape and saving money.
Am I happy about it? No, I will never own a house, and it sucks cus I love to tinker, and enjoy growing plants. But I can live a full filling live, better than any king that ever lived up till around the 18-19 century, and save money.
The economic system is dead, it died in 2008. Combine that with climate change, and things are only going to get worse. Unless some politician is going to pull out free, infinite, energy machine out of their arse they can’t do much as the system is already collapsing.
You can be smart about it, and have a few more happy years before we all die. Or you can be stupid about it, and suffer till we all die.
- am not a USA citizen, the problem is global.
Every time ive tried investing, i had to take it out after a few months to pay for something thats popped up in life after other things have raided my savings.
Investing is for people with a lot of excess cash.
What are those “somethings” that pop up every few months?
Broken phone, hot water heater, HVAC, fridge, washer, dryer, toilet, stove, oven, microwave, tv, personal computer, new shoes, new clothes, friend is getting married, friend is having a baby, the car needs a new set of tires, the car was rear ended, windshield was shattered by a rock that kicked up off the road on my way to work, need a new lawnmower cause the second hand Toro mower’s gas powered engine is shot, property taxes went up because home values went up, kids got sick and went to the doctor, dentist appointment found a cavity, accidentally sat on your glasses, suit doesn’t fit anymore and you have a funeral to attend, older windows on your house built in the 90’s are starting to go bad, storm damage to your out of warranty roof, deck needs to be rebuilt because the old wood is starting to dry rot, time to replace the bed(I know you’re supposed to replace them every 8 years, but you went ahead and stretched 15 out of this one because you’re frugal)…must I continue?
No need to continue. I see a bunch that could have been postponed or omitted.
Like what
Stove, oven, and microwave are redundant; it’s convenient to have all of these but you don’t need all of them. The TV, also, is a luxury item. I don’t know what part of your friend’s wedding you paid for, but that’s not a necessity either. Did the person who rear-ended your car not have insurance? A gasoline lawnmower is excessive, get a push mower. Attend the funeral in less-expensive clothing. Windows starting to go bad haven’t actually gone bad. Deck wood starting to dry rot doesn’t mean it’s nonfunctional, and even if it is a deck is not a necessity; get rid of it instead. Replacing your bed “just because it’s time” is weird, was there actually something wrong with it?
I’m not saying it would be awesome to cut or postpone those expenditures. But you said you had to take your savings out to do these things, and that doesn’t seem true to me. You chose to take your savings out to do those things. If you value those things more than you value having savings, fine, that’s your choice. But “Investing is for people with a lot of excess cash” isn’t true. You could have chosen to have savings instead in exchange for a less expensive lifestyle.
What are you doing to those appliances that’s making the break down so rapidly, anyway? I’ve got a microwave that’s lasted me at least a decade. I’ve never had a TV or toilet “go bad.”
New shoes and new clothes should be part of your budget. You shouldn’t be blinds idea by this.
Everything else, do some reseaech into ‘emergency fund’. You need one before you start investing, else yes you’ll be dipping into your investments the moment you need some extra cash and you might end up loosing money if the market has gone down when you sell.
That’s the point. Financial security is extraordinarily tough to come by so people can’t set aside the money for an emergency fund and invest. It’s not just poor budgeting, everything is getting more expensive for the middle class. Five years ago, my fiancee and I could buy 2 weeks of groceries for $100 at Aldi. Its doubled in that 5 years. Ironically, the most stable consumer good in the last 5 years has been gas and republicans bitch about that too.
Youbare mixing things up.
Groceries have gone up, no one is questioning this, we all feel it.
When questioned about what your emergency, unexpected expenses were, that made you dip into money that you had invested, you listed real emergencies (cavities) and stuff that should be in a budget - new shoes.
Read about personal finance. You have money that you spend as part of your budget bills, shoes, rent etc.
if you manage to have any left, you put them against an emergency fund, typical recommendation is you try to build a nest that allows you to leave for six months.
Then if you still manage to have any left, you start investing.
It looks like you did the wrong way, invested money that you actually needed.
Also, if you are redoing your deck and don’t have an emergency fund, toubare living on the edge. Shit happens like lose your job and break a leg and you don’t have money to pay your mortgage. But at least you have a new deck.
This is basic personal finance, has nothing to do with the price of groceries and you are not poor since you obviously have extra disposable income that you are using wrongly. The other guy isnright BTW you don’t need a new bed ffs, if you have money to throw away start building an emergency fund.
But obviously this is lemny and my logic is in the way of the narrative that the greedy corporations are causing everyone to leave one pay check to another. Hence all the downvotes.
I don’t know your situation, but investing is riskier than a savings account, that currently yeilds a high interest rate.
If you need an emergency fund, make one in a high yield savings account first. My rough number is $10,000. “You’re missing out on the gains” is an incredibly shortsighted view people have in the stock market. “Gains” are made over 20 year periods.
Precisely, which is why I don’t think my comment is directed at you. If you’re always trying to get ahead of the latest unexpected big expense, you’re not a “HENRY.”
That’s what living pay check to pay check is though…
Not necessarily. It’s what living paycheck to paycheck is if you’re poor. If you make a lot of money but spend a lot of money on unnecessary things you can also be paycheck to paycheck.
Except that’s not at all what OP said or was implying. Nice way of pushing the blame on the people affected rather than the broken system we live in.
Most people are struggling with the basics, not disputing that. But, then I wouldn’t consider those people HENRYs.
When I look around, I also see a lot of people with high income making boneheaded moves like buying expensive vehicles, renting luxury apartments, etc. For some people the problem isn’t the system, it’s their own lack of self-control or planning. If you’re making $200,000 and still feel broke. Maybe that $1,500/month car payment was a mistake. Maybe you shouldn’t have used the raise to move into a luxury apartment building.
When I was starting my career all my coworkers lived in $2200/month luxury buildings. I knew we all made roughly the same amount of money, so was shocked that they would pay this much for rent. Meanwhile, I sought out roommates and paid $650. With the money I saved, I paid off my student loan debt aggressively. Now all these people are struggling to get to the next step in life. Yeah, I could’ve seen that coming 10 years ago for you.
I see the same thing with cars. Everyone wants to own some luxury SUV. And, they make fun of me for driving a Prius. I won’t be surprised in another 10 years when they’re still struggling.
This isn’t an attack on people who don’t have the money. This is an attack on people who do and can’t plan well, but then act surprised when they’re broke still.
I think there’s a difference between High Earner and High Income that is causing a discrepancy here. Somebody making six figures is a High Earner, but isn’t really a High Income anymore. In 2020, I made about $40k, which was more than about 55-60% of Americans made that year. That puts anybody making $100k or more in the top 25%, at least, of incomes in the country. And yet the prices of things mean that more and more of them are living paycheck to paycheck, regardless of their financial planning.
In a lot of ways, what’s in the market dictates what people can buy more than what they can afford does. I had to buy an SUV the last time I bought a car because I need the 4 wheel drive for the winters here. I had a front wheel drive car once, and couldn’t get it out of my neighborhood when there was more than a half inch of snow on the road. That same SUV today is at least 25% larger than the model I bought, because “that’s what the market wants”, according to Toyota.
When I was first looking for apartments in 2010, studio apartments in my town started at the $1,500 to $1,700 per month range. The lowest rent I could find was a single room in somebody’s house with “occasional kitchen access” for $1,000 a month. And now there are cities where landlords are telling people making $100k that they need to find roommates to afford rent. A 2 bedroom house on a tiny plot of land that’s falling apart just down the street from my parent’s house got bought last week for $1.2 million. 10 years ago that house was probably worth $500k at best. The new owners intend to tear it down and replace it with an Air BnB, taking it off the housing market and further driving up housing prices in town. Builders are making luxury apartments and condos, and single family suburbs, instead of medium density multi-family housing because “that’s what the market wants” and definitely not because that’s what has the highest profit margins. I think there’s been 1 new mixed-use development built in my hometown since I was living there as a kid, but the number of condo developments has increased from 1 to 17 in that same time frame. Every year more kids leave because it’s simply unaffordable to live there. It was even when I was trying to live there, and it’s only gotten worse.
There’s people living above their means, and then there’s people making a six figure salary who just had to replace a car in a market where car prices spiked 30% in the last 3 months of 2023 alone. Personally, I probably wouldn’t even own a car if our country wasn’t built for cars instead of people. They’re priced as a luxury but considered a necessity by the powers that be. Even if you do a lot of the routine maintenance yourself, like me, it’s still prohibitively expensive for the majority of people. Even those we could consider High Earners.
I don’t make 200k, but together with my wife, we make a little under that. We both have cars, and both are paid off. I still have the first car I ever brought, which is a Nissan Sentra 2006 basic model. So, 17 years on the same car and hers is a 2015 Toyota. We do have 2 kids and brought a house in 2015. The last 4 years have been almost impossible to make ends meet, and all we try to do is survive with the very occasional do something for the kids. I have tons of housework I can’t do but also can’t pay for either. Because of this, we also can’t move until it’s taken care of, so we’re kind of stuck here as well. We have no money to save or invest. Did we make some bad decisions? Sure, probably shouldn’t have had kids for starters. They cost a fortune. But my point is we aren’t doing anything crazy here, it’s just that more and more things are taking our money and prices also went up. It sucks because all I want to do is live and get by, I don’t really have any grandiose dreams of doing crazy things or buying tons of stuff. I just want to get by as my parents did, which seems impossible today.
Even if you do nothing, if you don’t get into debt, you will have millions in equity in the house when it’s paid off.
You’ve basically invested into real estate so you’re saving money even if it doesn’t go into your savings account.
We purchased the house for around 300k, and even with the market today, it’s about 500k. Sure, it could go for higher whenever we do sell, but it’s not an investment. With our current loan we will have paid over 500k over 30 years, so I really am not expecting to make out from this. The only way this makes me money is when I retire (which is close to payoff anyway) and move someplace way cheaper than we’re we live now.
You’re going to pay it off in what, like 25 years? Yeah, it will be worth over a million by then.
My dad bought his house for $600,000 in 2008 peak, and it is now worth maybe 2 million. It hasn’t even been twenty years and it’s more than tripled, despite being underwater on the mortgage in 2009 (owed more than market value)
How much did you pay for your house? Assuming you live in a HCOL area? Making almost 200k you shouldn’t be struggling at all, unless you’re living in some crazy high cost of living area.
I live in North NJ. From my understanding, it’s about as bad as it gets. House was 330k 10 years ago. We also have crazy property taxes, so that alone is 13k a year. I also live in a very rural area which was the only option for the area if we wanted some space and also keep house prices semi cheap.
How damn costly is everything else there, that’s crazy high for property taxes though.
I gotta back your position here, especially because I think you’re being downvoted unfairly. There is a lot of unfairness in this economy for sure but on this thread that started with HENRY and literally “They have given up on the idea of financial solvency and are going into debt to indulge in luxuries” your comments are totally in line and fair.
Want to add too, that even the first subject in the article ‘Making the most I’ve ever made’ isn’t the best example of a tough economy. She went through a divorce and then bought a house in one of the most competitive housing markets in the US. The high interest rates certainly make that tougher but that’d be hard to afford even before without it.
Both can be true. There are many people who barely (or don’t) make enough to survive. There are also many people who spend money frivolously and then complain that they’re broke because of the economy.
Dude, i pay near $400 a month in just student loan payments. I had to buy a “new” car last year and this 8 year old Subaru cost me $360 a month. I could have bought another $4000 beater, but that’s a hole you never get out of because you are constantly having to replace cars that aren’t worth the scrap they are made of. Everyone has been on a knifes edge for the past 16 years and now everything costs double from them but wages have been the same. No amount of budgeting is gonna fix that.
I didn’t say that… my comment isn’t directed at people who are living paycheck to paycheck. It’s directed at people who think they should be rich because they have a high income, yet always seem to have found some unnecessary thing to spend their money on, which prevents them from building wealth.
If you’re always struggling to pay your bills, you need to increase your income. Not saying it’s your fault, just that practically that’s the best thing you can do for yourself in an imperfect system rigged against everyone but the very rich.
“just make more money” lmaooooo
You’re maliciously trying to misrepresent my comment.
On Lemmy financially irresponsible people don’t exist, and when making any statement to the contrary, all they can hear is “blah blah blah avocado toast”.
Didn’t you just say you improved your budget situation by buying a more reliable car?
No, they said that their choice was either an extra expense of $360 a month for the car that they bought, or $4,000 for a cheap beater that’s guaranteed to die on you at some point and be a hole that you perpetually shovel money into if you keep replacing it with more junkers.
That doesn’t mean that they can afford the extra $360 a month. Just that it was the cheaper option.
Just that it was the cheaper option.
Yes, that’s what I was pointing out. He reduced his expenditures.
I suppose he could also go without a car entirely, depending on the circumstances.
He’s still paying $360 a month more than he was before he had to buy a car. His expenditures have increased overall, though not by as much as they possibly could have. But that doesn’t mean that they’ve reduced, unless you’re for some reason considering the cost of the previous car as being more expensive than the new payment in some way.
In fact, if he had bought the $4,000 beater and had to replace it after a year, it actually would’ve been cheaper than the new car - $4,000 over 12 months comes out to $333.33 a month. Of course, that doesn’t include anything like gas or maintenance, but neither does the monthly payment on the other car.
He didn’t specify how frequently he had to replace the beater. Since he was complaining about how it would be more expensive than the car he did bought, logically I would assume it would be more frequent than that (or would require costly repairs more frequently, with the same result).
If he chose the less economically efficient option, that’s even sillier. Why would he do that and then complain about it? This is really the whole point here - budget your money and choose the expenditures that make sense within your budget.
If you don’t save and invest it, you’ll be living paycheck to paycheck for the rest of your life.
I don’t think you really know what “living paycheck to paycheck” actually means if you think it, in any way, involves investing.
You can have very high income and still live paycheck to paycheck if you spend every paycheck
“living paycheck to paycheck” generally means that all money is spent on living expenses and there is very little, if anything, left over. If you have any appreciable discretionary income, you are not living paycheck to paycheck.
Tell that to the people who make 150K and spend 200K a year.
Hint: they dont’ give a shit what you say.
I think his point is people are only living paycheck to paycheck out of choice when they could save and invest if they tightened their belts.
Not saying I agree, just explaining his perspective.
Maybe if they ate less avocado toast right!
In some cases genuinely yes. If you are earning $X and you are spending $X every month, but some of those expenditures are on luxury items like fine foods, then complaining about how you’re living paycheck-to-paycheck and don’t have the “choice” to invest rings hollow. You do have the choice to invest, you’re just choosing to spend that investable money on immediate luxuries instead.
There are peple who are genuinly struggling.
Then there are those who choose to spend 10-20K on vacations every year and ‘feel’ they are struggling.
And these latter people will forever tell you how they are living ‘paycheck to paycheck’ and talk your ear off about how theri struggles are more genuine and ‘real’ than people who are actually poor.
I try to save whatever extra I have, because everyone says I need to have six months of expenses saved.
The problem is that before I can save up enough to cover that there’s some huge expense that I need to cover that empties it out and puts me even more into debt.
If I could manage to save up a year of expenses, I could probably start my own consulting agency and start making a lot of money, but I just can’t get there.
OP is like: Even if you have highly-valuable skills, you can’t get ahead, because the game is stacked in favor of renting out your assets instead of delivering valuable labor.
Reply is like: Yeah, but have you considered renting out your assets though?
Come up with a better idea besides complaining.
Ah the ol’ deserving poor schtick. Classic.
This is really stupid.
You’re basically telling people “just be rich” like it’s that simple.
People living paycheck-to-paycheck are not able to invest money because they don’t have excess income, they get to decide if they want to pay for rent or want to pay for food. Combine that with astonishing inflation rates and salary raises that don’t match cost of living increases or simply layoffs, and we have one fucked up situation.
This is a systemic problem. Billionaires shouldn’t exist. Billionaires are a societal problem.
edit: Oh, I see your comment isn’t directed at people living paycheck-to-paycheck, that’s a bit more reasonable then but I still think you’re missing the mark. It’s not as simple as “just increase your income” like you seem to be thinking it is.
because it is that simple.
be rich or forever be poor.
this is the system we have setup and the system that we worship.
The problem in this thread is that there are people - such as the one mentioned in the title of this article - that are living paycheck-to-paycheck by choice. They choose to spend their entire paycheck on stuff. They don’t need to spend it all, they could save some, but instead they buy the biggest houses they can afford or build a deck they don’t actually need.
There are people who would literally die if they tried to significantly reduce their spending. Those are the people who don’t have a choice, and I sympathize with them and want solutions for this because it’s a serious problem. The others I have somewhat less sympathy for.
Gen X here and I can’t afford to contribute to my retirement. Even had to withdraw some during unemployment. I’m either working until I die or hoping assisted suicide becomes legal in 20 years.
Yep. Same. I do pretty good for myself and I’m more fortunate than most, but I had to borrow money from my dad recently for a series of expenses I couldn’t absorb in real time. I got the “you don’t know how to budget” sermon. It felt as fun as you’d expect
I said fuck it and gave him a list of earnings and expenses (I’m pretty frugal) and he was like, “oh…”
Oh hey, this is what my partner and I have been experiencing for the last year or so.
Did he clap afterwards?
On the bright side, 9mm is cheaper than a retirement home. Somebody’s getting a blowjob on my 60th birthday, and it ain’t gonna be me!
Damn, that’s dark. Like my favourite kind of humour.
assisted suicide
Is that when you die but take a billionaire with you?
Assisted suicide vs… illegal suicide? What’s the difference?
Illegal doesn’t pay out insurance claims. Not that I can afford life insurance….
X here too, 53yo, cannot contribute to retirement. At 67 I will have to sell my house because I’ll not be able to afford taxes, insurances, power, repair, etc
Gen Millennial here. I can assist you on your suicide that day for a hot meal so I can at least eat on that day. Maybe someone from Gen Z can assist my suicide if I leave him my blanket then.
A hot meal? If you’re eating the person who just suicided then you could probably stretch those left overs out for at least a week or two.
You might be on to something here…
Sounds like a modest proposal
I might be “rich” when my parents die, depending on how much elder care they need.
I’m actually kind of looking forward to the day I look my kids in the eye and say “I’m going out to look for firewood” and just walk out into the snow and die.
But there won’t be any snow anymore so I’ll just wander off into a slightly chilly night.
slightly chilly night.
You’re a glass half full kind of person, aren’t you?
What if we just financed all our kids advantages on our own credit for them and then promptly died?
What would happen to the debt?
Say I max out my credit card for their down payment on a house and then go “get firewood”.
They definitely try to track large cash gifts when putting down a down payment on a house.
Then the credit card companies crank their interest rates higher and restrict the credit they extend to your kids to compensate. It’s not “free money.”
I’d rather look forward to the improvements in technology that make elder care less expensive.
As if regular people can afford whatever improvements happen
You didn’t finish reading the end of the single sentence in my comment.
the improvements in technology that make elder care less expensive.
There is a possibility of that being happening but the last half-century of economic trends makes this unlikely, unfortunately. This decade, especially, makes it likely that the gouging will continue and any advances making care less expensive will just see an increase in profits at the top. Every industry seems to have give into overdrive on driving up profits at the populace’s expense, with the exception of basic consumer entertainment electronics but, they are, realistically also driving up effective costs as they are being used to harvest customer data for sale.
If we’re getting out of this, we’re going to have to do it ourselves because none of the established holders of power have shown the slightest inkling of being interested in stopping it.
The last half-century of economic trends supports my expectations, actually. Treatments have been getting cheaper as technology advances. New treatments tend to be expensive, yes. But then as they become older they too get cheaper.
Insulin was discovered over 100 years ago and it took policy, not improvements in manufacturing, to lower the price (which only happened last year).
In America, they don’t get cheaper because it got easier to make.
Her mortgage is $1650/mo, which is incredibly reasonable in Denver. I think this specific person’s problems have more to do with her recent divorce. She was used to splitting costs, and probably spent quite a bit on the divorce itself
$1650/mo hopefully includes taxes and homeowners insurance
Yes, mortgages include an escrow payment for these
As someone with mortage of 520€/month there’s nothing reasonable in what she’s paying. I don’t care if it comes with 6 bedrooms, a maid, cook, gardener and a chauffeur - I’m not paying that. I’m more than fine in my tiny granny cottage on the outskirts of a middle sized city.
You couldn’t rent a shack that had a floor made of perpetual dirty needles for $520/month.
…that’s more than I’d make with minimum wage in my state, which I don’t think is that far behind colorado. Yikes.
ETA: ok nvm I did math and if you make a little over $10/hr 40 hrs a week, your entire paycheck would go just toward that.
You’re still off unfortunately.
Full time at $10/hr is $1600/month before income tax. For simplicity, we’ll say federal+state tax is 15% so now we’re at $1360. Social security is 6.2% so take away another $100.
Then, of course, this is the United States where most people have to rely on their employees for “affordable” health insurance - and often still have money taken out of their check for it.
So now we’re at $1000-1260 monthly take home pay for a full time job at $10/hr
The standard deduction is $13850 so there’s no way you’re paying 15% tax on an income of $20,000
You’re paying about a little over $600 federal plus whatever state tax and usually state tax is less than federal, but depends on the state. In some states you don’t pay state income taxes.
So best case scenario you pay a little over 3% federal and no state.
At that salary you’d also get EIC and likely pay no taxes at all.
“affordable” health insurance
At that income, you would qualify for Medicaid.
Also I don’t think you pay income tax when your income is that low.
Someone making minimum wage is unfortunately not likely to be getting a mortgage.
It’s always been pretty interesting to me how crazy the price of living changes. $1650 a month for a house seems insane to me.
lol i’m looking at paying ~4500/mo for a 3br 2ba ~1300sqft.
At a certain point - isn’t it just cheaper to move to a cheaper area?
Not that it’s easy. It’s what I had to do. 6 hours away from friends/family.
Wages took a 25% hit. Bills took a >50% hit so came up on top.
Wife refuses.
In order to keep your mortgage at 1/3 your income, you would need to be making $700,000/yr.
You’re calculating it based on take home pay or something? because 1/3rd of 700,000 / 12 = $19,250/mo
Household income is about 230k. Mortgage comes out to less than 50% of take home pay. 230k/12 = 19166/mo (gross) 4500 is 23% of gross income.
Afaik every couple around here by 30 with professional experience and a degree is making over 200k (so 100k per person.) I’ve seen IT support roles for 100k+ (example from the highest paying company i’ve ever seen, liberty mutual insurance: https://searchjobs.libertymutualgroup.com/careers?location=Boston%2C Massachusetts%2C United States&department=Technology&pid=618496295577&domain=libertymutual.com&sort_by=relevance )
Nah I’m probably just dumb and did the math wrong. Those figures are still dizzying to me, as a BA in the Midwest. $100,000/yr is considered pretty decently middle class, I can’t imagine anyone here paying $4,500/mo on rent. Maybe I’m just very lucky.
A room is basically ~1k/mo here if you’re renting with roommates, maybe up to 1500 if the place is really nice. 1800 for a studio, give or take.
Entry level roles are usually 60kish+ but everybody hits 100k very quickly in any kind of white collar gig. With the pharma industry being here a huge portion of roles in greater Boston are pharma or pharma adjacent with 200k-400k salaries(+bonus/options) which drive up the cost of housing like crazy. Plus some finance and legal too. There’s a few ad agencies, plenty of healthcare companies and some world class hospitals. Plus a significant amount of highly desirable colleges that lure in the rich foreign exchange students. It makes for a really expensive housing situation unfortunately.
You must be in an area like SF or NYC. Or this is a luxury space.
That is absolutely ridiculous
$1650/mo for a mortgage in Denver, CO at 5.25% interest is a fantastic price. You’re going to find it can be a lot less in a lot of places in the US, but not in highly desirable major metropolitan areas
She’s paying $1650 for a house? You’d pay more for a house in a neighborhood where every night is the purge here.
That’s supply and demand, for you.
