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Old 05-23-2015, 03:12 PM
 
71,471 posts, read 71,652,652 times
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you are making the poor assumption that income goes up with it. the last 15 years have seen nothing like that for most workers. many earn the same or less than they did back in 2000.

yet other prices keep going up making that mortgage even harder to pay.

In fact, since 2007, every group besides those with an advanced degree — who made up just 11.4 percent of the population in 2012 — saw their hourly compensation take a dive.

Those with just a high school degree saw their wages drop the most — down 3.5 percent, compared with 0.7 percent for those with a bachelor's degree.


http://www.thewire.com/national/2013...wealthy/68627/

Last edited by mathjak107; 05-23-2015 at 03:21 PM..
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Old 05-23-2015, 03:59 PM
 
Location: RVA
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Like I said, it depnds on what your mortgage is relative to your income and earnings/profession are. I'm an engineer and my mortgage is a 15year at 3%, where P&I & escrow (includes my homeowners Hazard insurance yearly premium of 250/yr, wonderfully low in this area) is now 16% of my gross, while in 2007 it was 22%. My salary has increased 31% since 2007 and is actually under represented in my field because I work for a utility and have a healthy pension coming. By staying in my current position I have chosen the safe, less risky path, and am sacrificing income increases in order to secure increases to a greater pension (typically 50% and noncontributory) when I retire, a conscious decision, since all current positions I could easily obtain and secure a 20% increase in salary, have no pensions anymore.

Last edited by Perryinva; 05-23-2015 at 04:11 PM..
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Old 05-23-2015, 04:12 PM
 
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which is why a mortgage is inflation neutral.

by itself it neither helps nor hurts .

it is only the medium that allows one to aquire an inflation hedge , either their own built in earning potential as an inflation hedge or the investments it can buy as a potential inflation hedge.
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Old 05-23-2015, 06:24 PM
 
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If you go for years on end with no raises, you will be in a world of hurt and need to be concerned about finding another job or career.
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Old 05-23-2015, 06:26 PM
 
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it is just the way it has been for quite a few years now. it has been an employers market with 2 back to back recessions the last 15 years. you can google it and it has been a pretty wide spread thing . raises have been few and far between and job hours have been slashed as well in many cases.

counting on wage inflation to bail you out and make things cheaper has been a failure. we had lots of inflation but not in wages.

pay cuts were the norm and any raises were simply just retracing back,.

Last edited by mathjak107; 05-23-2015 at 06:34 PM..
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Old 05-23-2015, 06:48 PM
 
Location: SF Bay & Diamond Head
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Geez guys. Are you a bunch of sharecroppers? Are you making the exact dollar amount you did in 2000? No one I know is. Look at it this way. 2000 you're making $1000 and mortgage is a third of your salary at $333. Now in 2015 you're making $1500 (yeah minimum wage increases). The mortgage is now ONLY 22% of your income.
http://www.dol.gov/minwage/chart1.htm
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Old 05-23-2015, 07:41 PM
 
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Quote:
Originally Posted by mathjak107 View Post
... you can google it .....,.
I did. Average salary increases have been quite low for the last several years. For 2015 the projection is 3%. The same as 2014 and 2013. That is almost 10% in 3 years. Please note that salary increases do not include promotions.
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Old 05-24-2015, 02:56 AM
 
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Quote:
Originally Posted by honobob View Post
Geez guys. Are you a bunch of sharecroppers? Are you making the exact dollar amount you did in 2000? No one I know is. Look at it this way. 2000 you're making $1000 and mortgage is a third of your salary at $333. Now in 2015 you're making $1500 (yeah minimum wage increases). The mortgage is now ONLY 22% of your income.
Untitled Document
but many are not making more , many were just retracing back from pay cuts. cuts were happening all over the place so the raises they got being so small just inched them back to where they were.. also wage numbers are skewed because women have been earning much more the last decade while men have gained much less ground. the numbers are very different once you look at men's wage increases vs women over the same time frames. actually 3.20% for women vs just 2% for men or a 30% difference ..

other things went up drastically too like healthcare and food costs so that mortgage became even harder to pay in dollars.. it isn't a mortgage in isolation , it is what is happening to your income dollars as any discretionary income you had is less and less.

it isn't a case of renting vs buying because you could sell that home , dump the mortgage and rent a 1 bedroom apartment and live cheaper more likely than you ever could owning and supporting a whole house even without a mortgage.

but in any case it goes back to what i said , a mortgage is not by itself an inflation hedge , it is dependent on what you buy as a hedge or your own ability to use your earnings ability as a hedge and that varies from person to person.



on another note : overall wages in real dollar terms have been falling for almost 30 years so we are just about all behind where we were mortgage or not.

inflation adjusted wages today are below where they were in the 1970's


Last edited by mathjak107; 05-24-2015 at 04:17 AM..
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Old 05-24-2015, 04:32 AM
 
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Mathjak, there you go again. You should have earned the title as City Data's worst pessimist. Notice the title "Real Wages." All of this data has been adjusted for inflation and is based on 1927 inflation adjusted dollars. This covers up the fact that there has been very considerable increases in wages for manufacturing and unskilled jobs. Secondly, manufacturing and unskilled jobs are not reflective of the economy as a whole. These are the jobs that are often becoming obsolete and workers in those areas are being left behind in our increasing more complex society and workplace. Finally there is an issue with the concept that wages should outstrip inflation. I suspect we have seen the end of low skilled jobs pay increases that are ahead a long way ahead of inflation. We will see a jump in the near term when minimum wage rates increase. That is happening in many States and will now happen on a national level. I think that will be a temporary event. Overall we will have more need for highly skilled workers and less need for unskilled workers.

I cannot tell if you are a born pessimist and don't know any better or if you are just trying to find data that seems to support your arguments. In any case the notion that wages do not increase versus a fixed mortgage is just absurd.

Let me retract that last statement. I know you are a smart fellow so it seems you just like to argue for the sake of argument and the facts don't need to get into the way.
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Old 05-24-2015, 04:40 AM
 
71,471 posts, read 71,652,652 times
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two different issues . the real wages are for fyi and have nothing to do with the mortgage discussion .

i am not a pessimist at all , i look at things analytically and run on facts and figures and don't accept myth and popular belief with little basis other than what so many believe to be true.

if you are trying to argue that a mortgage is anything other than a means of acquiring an inflation hedge and is neutral itself you would be quite wrong . that has nothing to do with being a pessimist. that only has to do with the fact small investors as a group suck at it (fact ) and raises have been few and far between especially for men ,also fact.

if you are trying to argue against the fact eventually many retirees will be selling assets at a loss to pay for that mortgage when the cycle trends down you would also be wrong. the business cycle is still alive and well.


so the ability to buy or have that inflation hedge in earning ability to offset that mortgage cost for many has been a failure .

if the saying is inflation makes a mortgage easier to pay then that would not hold true for many . it is all based on individual circumstances and not rule. .which claiming inflation makes paying a mortgage easier just not true as a general statement. that would be based on the persons wage earning ability and investment ability and not inflation.

speaking for how others are doing raise wise over a time frame of two back to back recessions with one being the greatest since the great depression you would be wrong again since wage growth does not reflect cut pay or reduced hours just retracing back to where they were.

Last edited by mathjak107; 05-24-2015 at 04:56 AM..
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