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Old 03-19-2008, 01:23 PM
Status: "0-0-2 start!" (set 13 days ago)
 
Location: The beautiful Rogue Valley, Oregon
7,287 posts, read 15,336,812 times
Reputation: 9463

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Quote:
Originally Posted by texdav View Post
People in the 50's did not live beyond their means on credit and pay a 25-28% premium because of opaying minimum payments. They also didn't buy stuff they didn't need like cellphones;cable TVand yes;a computer.They put savings above these things we buy now. So when I hear people say they can't save I am skeptical.Certainly people who buy things on credit cards and then pay the monthly minimum are pretty well set to crash one day.
Since cellphones and computers weren't even an option in the 50s, I doubt they knew whether they need them or not. Increasing people (like my son) only have a cellphone - they don't have a land line. And I don't know about your computer use, but mine's hardly a luxury - we used it for business, for finance and a host of other uses. Prior to the extension of credit, companies didn't charge 25-28% for credit card usage because they weren't ALLOWED to - it was called usury and there were laws against it.

I'm not saying that everyone today is thrifty and savings-minded: we wouldn't have an economy if we all were. But I don't think it's fair or correct to assume that everyone who is struggling financially is doing so because they were living in luxury beyond their means.
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Old 03-19-2008, 03:10 PM
 
Location: Forests of Maine
30,670 posts, read 49,416,421 times
Reputation: 19124
Quote:
Originally Posted by texdav View Post
People in the 50's did not live beyond their means on credit and pay a 25-28% premium because of opaying minimum payments. They also didn't buy stuff they didn't need like cellphones;cable TVand yes;a computer.They put savings above these things we buy now. So when I hear people say they can't save I am skeptical.Certainly people who buy things on credit cards and then pay the monthly minimum are pretty well set to crash one day.
Agreed

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Old 03-20-2008, 12:40 PM
 
48,516 posts, read 83,880,155 times
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Cell phone were a example of things that we can associated with;I certian knew they did not have them;Duh.But you need to look further at what people in the middle and lower middle class spend money on. Just take travel for example;cruises;trips to foreign countries. Alot of money is spent on these luxuries that could be saved. look at the per centage of people eating out regularly . There are ways to save they just think they have to have the latest toys in many cases or free time from chores.
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Old 03-20-2008, 03:26 PM
 
13,313 posts, read 25,542,533 times
Reputation: 20477
I was talking to a Verizon salesman the other day about buying a Verizon bundle. It took him a while to realize I have one phone and one TV and one computer.
When I built my house in 2001, the electrician had to really talk me into having a phone jack/cable thing in the upstairs loft, and put a phone jack in the one bedroom without asking. Heavens, I'm still excited about color TV, and just got cable in 2004!
The one overspend that I'm still suprised at (mostly in my lower-paid co-workers) is how they choose cars. It seems like pure advertising success, looks, etc. They always seem surprised about the Çonsumer Reports annual auto issue. I tell them that I always buy the cheapest car that's cheapest to run that runs forever until it's not driveable. The first one I succeeded with was a Mazda 323. I'm now doing it with a 2003 Toyota Matrix, the perfect car.
I see co-workers who make much less than me driving a Lexus SUV, etc. A lot of my co-workers are from West Africa, and the big new car seems to be a big deal for them. I can't imagine car payments of $700/month, etc.
It's still a car. It's just an appliance.
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Old 03-21-2008, 05:41 AM
 
Location: Londonderry, NH
41,492 posts, read 51,348,324 times
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The principal reason middle class folks are worse off than in the fifties is simply government economic policies and tax systems since the 1980’s have greatly favored the wealthy at the expense of the working and middle classes. IIRC a family could put their money in a Savings and Loan bank and actually earn interest faster than inflation could devalue the money. This is no longer true and has not been since the early 1970’s. Many homes were being built and the GI Bill was subsidizing mortgages as well as educations for people that would never before have had the opportunity to go to college. The economy was geared to industrial growth behind protective tariffs so labor unions could get really decent wages and benefits for their workers. The engineers educated with the GI bill provided the talent for the development of the electronics industry in this country among others. These are the people that engineered the space program and created a walk on the moon and all the technological spin-offs that led to cell phones and big screen TVs.

Since the “Regan Revolution” all these policies have changed. Now a college education is not supported, even for military veterans, to nearly the same extent. Students are expected to go into debt for their educations so they can graduate to a closed job market devalued by foreign workers and a dying industrial economy. Illegal immigrants have just about eliminated low skill jobs. For instance the Federal Forest service used to hire seasonal labor and pay them directly. They usually hired US citizens studying forestry or out of school teens. Now they use “labor contractors” (semi slavers) to provide the seasonal labor using illegal immigrants at greater costs to the government but with way fewer benefits and huge profits for the politically connected contractors. Our military hires mercenaries for embassy guards and truck drivers instead of using real soldiers for jobs that require using real weapons. This also costs the government far more but creates immense profit for politically connected companies like Halliburton and Brown & Root.

The Federal taxes have effectively increased to the point where a family just on the verge of making it to the point where they can live off their investments are taxed at nearly 40% while families already in the investor class are taxed at 15%. Property taxes have increased because federal aid to states and communities have decreased while Federal mandates have increased. The overall tax burdens have been shifted from the investor class to the working class.

These are a few of the reasons the working and middle classes of 2010 Are not doing as well as the same folks parents were doing in the 1950’s. This is not an accident but the result of carefully thought out and implemented government policies designed to enhance and protect upper class wealth and privilege.

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Old 03-21-2008, 01:25 PM
 
48,516 posts, read 83,880,155 times
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Much of it is like health insurance. To provide medical treatment to 50's level would be cheap now days. if you had cancer it usually was discovered late and they gave you pain kilers until death.By age 50 a large per centage oif people had dentures becuase so few could afford to go to the dentist but they often sent their kids. Also people saved for years to get the down paymant for a modest house that does not compare to todays average house in anyway.They also were much more likely to have a garden and do repairs to their house and other possessions.They also generally either bought used cars or kept there cars for at least ten years and a second car was unusual. They also did not buy the number of prepared foods or junk food at the supermarket.They also frequently actually prepared a written budget and many never flew in a airplane altho flying was cheaper then.They certainly never thought of taking a cruise or going to europe on vaction. Often when on vacation they prepared sandwiches for the trip and they seldom eat out except for special occasions.IMO they were just better survivers than we are now.As far as unions they still only represented a small portion of americans workers but were then the only workers that had politcal power and if you look at legistlation it showed that they made sure they had advantages other workers. Now the shoe is on the other foot and non-union workers are doing better than union workers because they moved into fields that are more in demand.Protectionism largely meant that people payed higher prices for goods and often the local stores were able to charge what they wanted.Many local owners of businesses got rich beyond what is possible in todays competitive markets because of it. Many fixed prices among themselves and kept competition from moving in to their town.We saw the unions start to go down during the investiagtions of the 60's under the kennedy administrtion for corruption within.I went from a kid to high school during the 50 thru 60's and my parents were middle class. They were very thirfty and saved for my brother and my college education.; there wre no student loans. My father always was saying that the future required a college education. He had worked for 48 years when he retired and was unusual because he was not 65 at the time but 62.Most retired at 65 and alot didn;t make it to that age.We have it made in todays world IMO.
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Old 03-21-2008, 04:35 PM
 
Location: home...finally, home .
8,235 posts, read 18,505,219 times
Reputation: 17765
It seems like pure advertising success, looks, etc. They always seem surprised about the Çonsumer Reports annual auto issue.

Totally agree about car costs. I always buy a three year old car , have bought Volvos for under $10k that last forever. I never have car payments because I pay cash. I know some people who think that I am "cheap" for doing this, but some of these people are unable to retire because they have so much debt attached to their home equity loans (a huge mistake) . They do have brand new shiny expensive cars, though.
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Old 03-21-2008, 06:19 PM
 
Location: DC Area, for now
3,517 posts, read 12,047,444 times
Reputation: 2141
Quote:
Originally Posted by nancy thereader View Post
It seems like pure advertising success, looks, etc. They always seem surprised about the Çonsumer Reports annual auto issue.

Totally agree about car costs. I always buy a three year old car , have bought Volvos for under $10k that last forever. I never have car payments because I pay cash. I know some people who think that I am "cheap" for doing this, but some of these people are unable to retire because they have so much debt attached to their home equity loans (a huge mistake) . They do have brand new shiny expensive cars, though.
Cheap? Or smart? I'd say smart! A nice coat of polish and a 3 year old car looks pretty good too.
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Old 03-24-2008, 04:36 AM
 
16,437 posts, read 19,127,002 times
Reputation: 9518
My Dad was a car dealer. He advised me to buy a two year old car with low mileage. The greatest drop in re-sale value is the first two years. So let the image junkies take the hit for the first two years depreciation and then buy it when they feel compelled to trade up. The people that call you "cheap" are probably just envious that you are debt free and comfortable with a perfectly good car that is not brand new.
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Old 03-24-2008, 07:41 AM
 
Location: Forests of Maine
30,670 posts, read 49,416,421 times
Reputation: 19124
Quote:
Originally Posted by Bideshi View Post
My Dad was a car dealer. He advised me to buy a two year old car with low mileage. The greatest drop in re-sale value is the first two years. So let the image junkies take the hit for the first two years depreciation and then buy it when they feel compelled to trade up. The people that call you "cheap" are probably just envious that you are debt free and comfortable with a perfectly good car that is not brand new.
To buy anything that depreciates like that, and not be able to use the write-off, is very spendy.

10 year old cars do not depreciate.

Over the years, I have bought a number of $500 cars. Every year I take my car to a mechanic ready to spend $500 on any repairs that he finds needed. I drove each one until it was dead.

I only sell my cars to junkyards.

It has allowed us to save more money, and to invest.

And thus to retire early.
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