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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.
You keep talking about wages dropping, taking a dive, earning less, etc, etc. All of which is supposed to make a mortgage even harder to pay.
Unfortunately none of that is true. Wages have gone up very considerably for all workers even those in manufacturing or unskilled positions. For someone with a mortgage, the costs have become a much smaller portion of their pay.
None of this has much of anything to do with the original discussion.
well it hasn't for me so that makes your statement false. i earned much more 15 years ago at a different company . if it isn't true for me it likely isn't true for many others either.
in fact since 1999 real wages have declined by 9% according to the financial census data. so a mortgage would still be a hardship to pay because of costs surrounding that mortgage and a decrease in spending power in dollars..
the mortgage may remain constant but when dollars are eaten up from the family budget without wages increasing paying that mortgage is not any easier. it is like oil prices are down now but our healthcare costs escalated by more than oil is down. the net effect of oil falling is a moot point , especially if our raises don't at least track the increases inflation wise .
in this case even if your mortgage stayed constant the rise in all your other expenses without a matching increase in dollars still left you cash starved. so inflation was basically no help and in fact made things worse for you.
any cost saving is coming from ownership not the fact you have a mortgage. if anything costs would be lower with no mortgage. so basically any difference will be based on your investing ability.
"The government’s release of income and poverty data brought renewed attention to the apparent stagnation of the American middle class — not just since the financial crisis hit , but for much of the decade that preceded the crash. The report showed that the economic recovery has yet to translate into higher incomes for the typical American family. After adjusting for inflation, U.S. median household income is still 8 percent lower than it was before the recession, 9 percent lower than at its peak in 1999, "
Last edited by mathjak107; 05-24-2015 at 05:41 AM..
If I worked for 15 years and earned fewer dollars than before, I would be pretty discouraged and pessimistic also. I am sorry to hear about the issue with your career.
well i earned the going rate for my industry the last 15 years .. i had a different pay structure from the first company that figured a much higher commission rate so income was well in to the 6 figures.
but when they went out of business other companies all offered more toned down compensation packages and less commission structure with a greater part salaried ..
many companies like our first one and i hate to say it actually over paid us compared to what compensation was in the industry. but the fact is we all are not earning today what we were back then at the companies we moved to ..
that is true for so many american's who had to switch jobs this decade. basically raise's you got were just a re-tracement back to where your old job was.
Last edited by mathjak107; 05-24-2015 at 05:57 AM..
Seriously I feel sorry for your situation. After a bit less than 15 years with my last employer my salary about doubled from what I earned before. Considering cost of living and local tax increases I did not feel that was enough. My employer talked a good story about pay for performance but when it came down to actual raises, they could not get there. Somehow they were stuck in the old union-type mentality of paying "fairly." That means they paid everyone the same in the same job classification. My job was non-union and the organization was non-union but in the NYC metro area there is a lot of union mentality. In any case, I got tired of working my butt off and not being rewarded. Rather than change jobs, I just retired early.
well by the same token i was with the first company 25 years and our compensation for most of those years was higher than our industry norm.
i had retirement on the drawing board for the last 7 years and could retire at any point so it didn't matter much anymore. being involved with the real estate ventures the last 12 years brought in more money at times than both our earned incomes spanning many years so earned income was not really our focus .
we hit 7 figures in one those years it was so lucrative for us and even last year we hit 500k with the lease rights sale we had so any raises were really not important to us. i think i ws really in the real estate business ha ha ha
Last edited by mathjak107; 05-24-2015 at 06:17 AM..
I was always absorbed, or maybe I should say sucked in, to a job that was very demanding with 10 hour workdays and a 2 hours of commuting. Congratulations on your success. I always felt I should start my own business or somehow find a way to be rewarded for my hard work and accomplishments. Well, at least during retirement I can feel really good that I am no longer in the world of big business and bureaucracy. Instead of commuting, I drive my RV from one national park to another. At least I will be doing that again within a few weeks.
Because I never gamble and I have an investment strategy that I don't monkey with.
How about this? If I am wrong, I will stop posted any ideas about the future of our economy or markets. If you are wrong, are you willing to do the same?
You are completely missing the point.
If you aren't willing to do the options thing, you are implicitly admitting that you are not certain that the markets will not crash soon.
The problem is one of epistemology, not economics. I don't accept your challenge because our positions are not symmetric - I am saying I don't know, and you are saying you know. That's not the same as me saying I know the markets will crash, and you know they won't. I am taking the "agnostic" position.
Buying the house was a hedge against inflation. The mortgage was a debt you incurred to buy that hedge. If you read the truth in lending papers when you took out the mortgage, they told you exactly how much you were going to have to pay for the mortgage, which is separate from what you paid for the house.
The wonderful thing about buying a house it that it costs very little to live there. The mortgage can be pretty expensive, but you can get rid of the mortgage just by paying it off. Then you can cut your home insurance costs by purchasing a policy with a substantial deductible. Insurance companies know that most homeowner claims are relatively small, so a policy with a $10k deductible can be cheap. With no mortgage payment, you should be able to handle $10k out of pocket change.
Just pointing out that waltzing with your banker has other costs than interest payments.
Property taxes, maintenance, and (depending on your definition of "cost") opportunity cost can be quite large.
Um, no. The mortgage is fixed dollar amount. Income goes up with inflation. I work 40 hours to make mortgage payment in year one. In year ten my salary has increased 50% It now takes less than 27 hours of salary to pay the mortgage. Inflation is paying 13 hours of salary towards the mortgage.
Irrelevant, because if your salary goes up, then it would go up whether you have a mortgage or not.
...
It may take less hours to pay it than before, but it still takes more hours of work than the 0 hours you would need if the mortgage didn't exist!
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