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We're attending a wedding for a couple in their late 20s. The wedding registry isn't for the typical home related items such as stemware; it is mostly for "experiences" such as a couple's massage, funding a night in a luxury destination hotel, etc etc. I'm not sure about debt, but the two do have a sizeable income, as both are in San Francisco. She's a tech recruiter pulling down about $200K; he's a software engineer doing close to the same.
Well, if a couple is making $400k then they’re certainly in an elite class and are going to have more options available to them than 95% of people their age.
We're attending a wedding for a couple in their late 20s. The wedding registry isn't for the typical home related items such as stemware; it is mostly for "experiences" such as a couple's massage, funding a night in a luxury destination hotel, etc etc. I'm not sure about debt, but the two do have a sizeable income, as both are in San Francisco. She's a tech recruiter pulling down about $200K; he's a software engineer doing close to the same.
This is common now. I’ve been donating a few experience even for a couple whose husband worked at a Google since 2005, bought a house in SF city. They don’t want things, they want experience.
Didn't the last recession destroy Millennials? A lot of Millennials were graduating school when the last recession started and had to move back in with parents because they could not get jobs.
No matter what you earn right now, it won't help that Friday when the company tells you that you are on "lay off"
Most people are up to their eyeballs in DEBT- student loans, new cars, mortgage, credit cards and more. The Dave Ramsey show of youtube has callers all the time who rattle off the numbers of their massive student loans "his and hers" well into 6 figures, 2 new car loans, a mortgage on a $350,000 house, maxed out credit cardS- plural as in half a dozen EACH!
It won't take much to collapse that house of cards very fast, credit cards would be real bad- you fall behind and the penalties and interest along with raising interest rates for missed payments seriously add up!
A recent study by the Pew Charitable Trust showed tha 80% of Americans are caught up in the chains of debt. That’s a huge number!
Mortgages are the most common debt that Americans carry, followed closely by unpaid credit card balances, car loans, and student loans.
The crash of 1929 was similar to the next one that will happen- people back then bought lots of stocks on margin where you could buy $1,000 worth for pennies on the dollar, good times were rolling, everyone thought it would go on forever and invested all their money in stocks on credit (like today with people in debt to credit cards and big mortgages and car loans) it was all great until that morning when the stock market crashed and people lost homes, farms, businesses and were wiped out completely!
It WILL happen again, history proves it, about every 10-20 years look at the dates, also this list is not complete either;
Panic of 1797
The United States’ first major economic emergency struck in 1797 as a result of a land speculation bubble bursting. This, combined with the Bank of England withholding payments and the closing of American ports due to a yellow fever epidemic, left economic activity stagnant in the North and caused deflationary effects nationwide through the end of the century. The crisis also initiated the turn of the American economy from an export economy to a domestic-based one.
Depression of 1807
The Depression of 1807, which lasted about three years, was the result of English trade restrictions combined with the Embargo Act of 1807, which was passed under Thomas Jefferson as a means of preserving neutrality as tensions mounted between England and France. By restricting foreign trade, however, the United States paralyzed its coastal economy and destroyed businesses within the shipping industry. Furthermore, the embargo’s primary aim failed as the country eventually was pulled into the War of 1812.
1815-1821 Depression
The U.S. government had racked up heavy debts during The War of 1812, which cut severely into state banks’ supply of capital. The country was in the midst of a land speculation bubble, and as the banks called in their loans many defaulted, and a number of banks failed. Extreme fluctuations in the value and supply of wheat and cotton crops fueled several consecutive years of high unemployment and a stagnant economy.
Panic of 1837
As the United States continued to push westward and “acquire” Native land, investors saw an opportunity for what seemed to be an infinite supply of cheap real estate to invest in. The bubble burst again and banks called in their loans. A major real estate panic resulted and a crash occurred, which caused more than 40% of America’s banks to fail. While then-president Martin Van Buren was widely blamed at the time, many argue it was Andrew Jackson, who had earlier removed most of the authority and power from the U.S. central bank and gave smaller banks the freedom to engineer their own demise.
Panic Of 1857
Due in part to the inflation caused by the discovery of gold in California, the recession in 1857 quickly devolved into a panic after the failure of the New York branch of the Ohio Life Insurance and Trust Co. Consumer confidence was shaken, resulting in a run on the banks and a long-term distrust in the American government and its ability to back paper currency. More than 5,000 banks failed in a little over a year, although most of the trouble took place in the North, as the South stayed afloat thanks to the stability of the cotton market.
Panic of 1873
A series of disasters in the few years before the crash of 1873 weighed heavily on American growth. These included The Great Chicago Fire and the Equine flu epidemic–which demobilized or killed nearly every horse in America, and ground all transportation and industry to a complete halt. A boom in the railroad industry eventually led to a bust, and when banks were left holding thousands of dollars of railroad bonds, a panic occurred. When the bank Jay Cooke & Company failed for this reason, the markets crashed so severely that New York Stock Exchange ceased trading for ten days. 18,000 businesses failed over the course of two years. Unemployment exceeded 14%.
Panic of 1893
1893 saw the results of years of over-extension of railroads and the slowing of general economic expansion across the country. Finally set off by the bankruptcy of the Philadelphia and Reading Railroad, there was a run on the banks and economic panic ensued. More than 15,000 businesses failed, 500 banks closed, and unemployment remained over 10% for five years, making this the worst U.S. depression up until the Great Depression.
Panic of 1907
Since the Jackson era, the American banking system had been decentralized. Consequently, during periods of boom, banks were able to lend unchecked. The economy was in a period of rapid growth leading up to the recession, due largely to the increased influence of railroad, steel, banking, and oil trusts. After an investor made a failed attempt to corner the copper market, the Knickerbocker Trust Company–one of the largest trusts in the country– failed, fueling a series of bank and trust bankruptcies. The stock market crashed, reaching a low of nearly half of its value from the previous year.
Depression of 1920-21
Although relatively short compared to many other U.S. recessionary periods, the Depression of 1920-21 was extremely severe. Following World War I, the United States underwent many changes as it adapted from its wartime state. This included experiencing the greatest levels of deflation in the country’s history, with, according to a Department of Commerce estimate, levels of 18% through 1920. With a tremendous influx of returning troops, unemployment spiked, with 1.6 million people joining the previously steady labor market.
The Great Depression
A period of rampant speculation in the 20’s led to a market crash of epic proportions. Over the course of two days, beginning with the infamous “Black Tuesday,” the stock market lost more than a quarter of its value. Widely regarded as the worst recession in U.S. History, the Great Depression lasted 11 years, 8 months and saw unemployment rates of nearly 25%. U.S. economic production dropped by 50%, and nearly every developed country in the world was severely affected.
Also Read: The Ten American Industries That Will Never Recover
1973-75 Recession
This period stood apart from many other U.S. recessions as it was marked distinctly by stagflation – the combination of high unemployment and high inflation. The United States faced a surge in oil prices due to OAPEC’s (Organization of Arab Petroleum Exporting Countries) oil embargo, combined with increased spending due to the Vietnam War and a stock market crash after the collapse of the Bretton Woods monetary relation system, officially putting an end to the economic boom which followed WWII. Unemployment peaked at 9% and, although the recession is recognized as having ended in 1975, the country experienced low economic growth for years afterwards.
Early 1980’s Recession
In the late 1970’s, inflation was on the rise in the United States, in part left over from the 1973 recession. As a result, the Federal Reserve tightened monetary policy considerably, in turn causing investment purchases to drop as capital became less available. By winter of 1982, however, inflation continued to drop and unemployment rose for several years.
Current Recession
It is difficult to say whether this current recession will be regarded as one of the worst in American history, but it is certainly shaping up that way. The result of an economy built on overextended consumer credit and risky mortgages, the crisis began in March, 2008 as investment bank Bear Stearns became the first of dozens of major American institutions to fail or be bailed out by the Fed. Bear Stearns would soon be joined by AIG, Lehman Brothers, GM, and Countrywide, to name a few. Unemployment has hovered just below 10% for nearly two years. It remains to be seen whether we are in the midst of a recovery or if this is just the eye of the storm.
-Michael B. Sauter, Douglas A. McIntyre, and Charles B. Stockdale
Keep in mind too, college students currently owe 1.6 TRILLION dollars in student loan debt, a debt which cannot be discharged by bankruptcy, that's more than the entire country has in credit card debt.
The next recession will see a massive defaulting on those loans, watch and see!
Didn't the last recession destroy Millennials? A lot of Millennials were graduating school when the last recession started and had to move back in with parents because they could not get jobs.
Absolutely. What also hurt was the slow post-recession recovery. The past few years have been very good, jobs-wise, so most of them are now in career-track jobs. But they lost 5 to 8 years of early career earning power.
Absolutely. What also hurt was the slow post-recession recovery. The past few years have been very good, jobs-wise, so most of them are now in career-track jobs. But they lost 5 to 8 years of early career earning power.
Exactly. I lost about 2 years, and I was lucky. A lot of my peers languished in temp positions for about 4-5 years. Circa 2015 is when you could really feel things turning around.
I remember applying for jobs between 2010 and 2012. In group interviews I would usually be among the youngest in the room, and the bunch of people around me had typically 5-15 years of experience in the field & had been laid off from other workplaces.
It was really hard competing against them when I had like 6 months of a college internship.
Absolutely. What also hurt was the slow post-recession recovery. The past few years have been very good, jobs-wise, so most of them are now in career-track jobs. But they lost 5 to 8 years of early career earning power.
I am an older Millennial. I finished my MBA just months before Lehman collapsed. Even in the Fall of 2007, employers were pulling back. Big companies plan their MBA hires up to a year in advance. In Spring 2008, I can think of one major consumer products company that was in a hiring freeze. There were more that I wasn't aware of that had hiring freezes simply because I was not interviewing with them. It was awful.
It took years for me to recover from that. A few years earlier, when I got my BA, employers were not pursuing me passionately, and the recession was still 3 years away.
I don't have years to lose in another big recession.
I don't have years to lose in another big recession.
This is why the idea of financial independence is so important to me. Hopefully, if this ever happens it won't matter because we are saving 50% of our incomes as is.I make significantly more than my wife, but if I lost my job we could support our lifestyle on her income. Plus using the 4% withdrawal assumptions we could currently support about 35% of our lifestyle from our investments/savings and if you removed daycare that % would jump up to about 65%.
I don't understand why more millennials aren't big into FI given the struggles most say they had. But when I talk to all my friends they are perfectly content saving 10-15% in 401ks and spending the rest. To each their own, but don't start complaining about how hard life is when you weren't saving for the past 10-15 years and you lose your job if/when a recession hits.
boomers have had it so good they don't even realize how screwed up things are now...
houses are much much more expensive in US cities compared to what they were in the 80s on an income inflation adjusted basis, pensions have all but disappeared... the stock market has sucked since 2000 and is predicted to suck for the near future so you can't even make money there, white collar jobs are being decimated left and right by import of cheap labor and globalization, social security and medicare is in disarray, cost of education has skyrocketed etc. etc. I could go on and on...
I agree with you for much of what you say but the stock market has been great for this Boomer 2008-2018
Last edited by Jstarling; 08-29-2019 at 08:00 AM..
Reason: Too many 0s
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