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Old 11-01-2010, 04:37 PM
 
8,265 posts, read 11,438,033 times
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Quote:
Originally Posted by newenglandgirl View Post
The obvious answer is to not depend on jobs for survival.
Words of wisdom my friend! Be the squirrel.
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Old 11-01-2010, 06:01 PM
 
Location: Conejo Valley, CA
12,470 posts, read 18,579,965 times
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Quote:
Originally Posted by newenglandgirl View Post
Not everyone bought their home at age 25.
Most people purchased homes by the time they are 30, so with a 30-year loan it should be paid off by the time they are in their 60's. Also, 15/20-year loans were much more common back than as well.

Unlike the generation before them, the boomers kept "trading-up" in the housing market and each time they did they reset their mortgage, at least from my experience, that is the main reason so many 50~60 year old folks don't own their home.

Quote:
Originally Posted by newenglandgirl View Post
Many used their homes (wisely or unwisely) to finance their kids' education, not to take a trip to Acapulco. These people may have paid off, or paid down, their mortgage but with this kind of equity loan are right back up to where they started (no judgments, please).
I'm sure many used their equity to find their kids' education, I'm sure many used it to buy junk as well. Regardless, they are all poor financial decisions. The reason so many boomers have found themselves with little equity is because they made poor financial decisions, the generation before them did not make these same choices.


Quote:
Originally Posted by newenglandgirl View Post
you cannot understand how someone age 60 may not have their home paid off.
Of course you can, its just basic mathematics. Not to mention basic observation, I know exactly what many people in their 50~60's did with their money because I was there to witness it.


Quote:
Originally Posted by newenglandgirl View Post
* I heard last night on the news that any tax on an income of $500K per year (if there were to be one!) only applies to their first $100K. Funny how that doesn't work for the rest of us.
What are you talking about here? People stop paying social security tax after around $100k, but income taxes just get higher after $100k.
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Old 11-01-2010, 06:39 PM
 
Location: Near a river
16,042 posts, read 20,535,432 times
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[quote=user_id;16488186]Most people purchased homes by the time they are 30, so with a 30-year loan it should be paid off by the time they are in their 60's.

I would like to see a hardcore statistic that says that most people bought their home by the time they were 30. That was the previous generation, the one in which folks got traditionally married by the time they were 22 and had at least two kids by the time they were 30. That was in the 1940s and 50s, when a home was a modest proportion of a family's income.

Unlike the generation before them, the boomers kept "trading-up" in the housing market and each time they did they reset their mortgage, at least from my experience, that is the main reason so many 50~60 year old folks don't own their home.

If they traded up they were trying to stay in step with the Wall Street and corporate model of success. What was wrong with that? As long as capitalism exists you will see trading up. What they did not anticipate was the burst in the housing bubble, the bubble that was driven for the most part by the real estate industry that got quite rich in the game.

I'm sure many used their equity to find their kids' education, I'm sure many used it to buy junk as well. Regardless, they are all poor financial decisions. The reason so many boomers have found themselves with little equity is because they made poor financial decisions, the generation before them did not make these same choices.

The generation before them did not have their children paying 100 grand and more for college. The generation before them could have one working spouse and still live well. The generation before them had home costs, food costs, and all other costs in modest % proportions to their income. The generation before them also bought a heck of a lot of junk as well. So....??

Of course you can, its just basic mathematics. Not to mention basic observation, I know exactly what many people in their 50~60's did with their money because I was there to witness it.

You may know what SOME people in their 50s and 60s did with their money, and you're willing to generalize (stereotype) about it.

What are you talking about here? People stop paying social security tax after around $100k, but income taxes just get higher after $100k.

Not in the 7 states that do not pay income tax.
Google the video: "Tax the Rich" (CBS special, Oct 31)
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Old 11-01-2010, 07:17 PM
 
Location: Conejo Valley, CA
12,470 posts, read 18,579,965 times
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Quote:
Originally Posted by newenglandgirl View Post
I would like to see a hardcore statistic that says that most people bought their home by the time they were 30. That was the previous generation, the one in which folks got traditionally married by the time they were 22 and had at least two kids by the time they were 30. That was in the 1940s and 50s, when a home was a modest proportion of a family's income.
Sure, in the 80's the median age of first-time home buyers was 30:

http://www.census.gov/apsd/www/statbrief/sb93_9.pdf (broken link)

Also, the boomers got married by their mid-20's and had all their kids by their early 30's. The generation before them did things even earlier. Also its not like women can just pick when they want to have kids, after ~30 the probability of birth defects goes up.

Quote:
Originally Posted by newenglandgirl View Post
If they traded up they were trying to stay in step with the Wall Street and corporate model of success. What was wrong with that? As long as capitalism exists you will see trading up.

Right, the boomers never want to take responsibility, their poor choices were someone else's fault. Wall-Street and capitalist existed in the 40's, 50's and 60's, yet adults in those periods did not feel the need to blow all their money on new houses.

Quote:
Originally Posted by newenglandgirl View Post
The generation before them did not have their children paying 100 grand and more for college. The generation before them could have one working spouse and still live well. The generation before them had home costs, food costs, and all other costs in modest % proportions to their income.

The generation before them was able to live off one income because they made the necessary sacrifices, it would actually be easier today to have the same standard of living they did with one income, that is the natural result of increased productivity. Two income families became common with boomers, because boomers valued money and material things more than family. I'm not sure how people have such a distorted vision of things here, even I'm old enough to remember that people's standard of living use to be a lot different in the past.

Housing and food actually made up a greater share of people's income between the 30~70's than today, again the natural result of increased productivity. A farmer today can produce far more food than one could 50 years ago.


Quote:
Originally Posted by newenglandgirl View Post
You may know what SOME people in their 50s and 60s did with their money, and you're willing to generalize (stereotype) about it.
Yes that and other information, for example the housing stock over the last 1-2 decades has been geared around boomer move-up buyers, that is very apparent. Young home buyers aren't purchasing 3,000 sf McMansions, that was the boomers.


Quote:
Originally Posted by newenglandgirl View Post
Not in the 7 states that do not pay income tax.
Google the video: "Tax the Rich" (CBS special, Oct 31)
Huh? State taxes have nothing to do with federal taxes, if a state has no income tax then both the rich and poor are paying no state income tax.
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Old 11-01-2010, 07:30 PM
 
8,265 posts, read 11,438,033 times
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Quote:
Originally Posted by newenglandgirl View Post
The generation before them had home costs, food costs, and all other costs in modest % proportions to their income.



http://www.rasmusen.org/x/2006/03/16...rner-families/

Appliances tell the same picture. There is a lot of complaining about microwave ovens and espresso machines: Affluenza rails against appliances “that were deemed luxuries as recently as 1970, but are now found in well over half of U.S. homes, and thought of by a majority of Americans as necessities: dishwashers, clothes dryers, central heating and air conditioning, color and cable TV.” But manufacturing costs are down, and durability is up. Today’s families are spending 51 percent less on major appliances than their predecessors a generation ago….


I've not bothered to look but I suspect if you looked at inflation adjusted prices basic clothing costs way less than a generation ago, simply because most of it is made overseas for cheaper.

I'll grant housing costs might be more of our incomes but the houses are a hell of a lot bigger too.
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Old 11-01-2010, 07:57 PM
 
Location: Boca Raton, FL
5,996 posts, read 9,764,868 times
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Smile Being in a good position

My husband and I would be in great positions today if we had not helped our parents financially. We supported them most of our married life and now we feel like we are starting over. Don't worry - we have been working 6 1/2 days a week for over 2 years and have cut our debt by 40% but we're not done yet. We have a long ways to go but if we have to work our ***** off, we will do it.

Since we are both self employed, we are not taking jobs from anyone but actually creating them. My husband has many clients in their 80's, in great health, still working, self employed though. Great attitudes, happy, most well off.

So, don't catergorize everyone. All WW II people not created equal, neither were boomers, Gen X, Y and so on.

Back in 1994, when I was still in the credit end of things, I saw educating people on credit and debt an opportunity - couldn't get anyone interested - now you have shows all about it (Suze Orman, Clark Howard, etc.)

We just need to become fiscally responsible and have the morals that go with it.
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Old 11-02-2010, 07:11 AM
 
9,856 posts, read 14,340,926 times
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Quote:
Originally Posted by user_id View Post
Most people purchased homes by the time they are 30, so with a 30-year loan it should be paid off by the time they are in their 60's. Also, 15/20-year loans were much more common back than as well.

Unlike the generation before them, the boomers kept "trading-up" in the housing market and each time they did they reset their mortgage, at least from my experience, that is the main reason so many 50~60 year old folks don't own their home.
I can't tell you how happy I am to see someone else who realizes this. I am 24 years old and bought my first home a year ago (a smaller home for this area - 2 bedrooms/1 bathroom when most are 3-4 bedrooms/2 bathrooms). I put together a debt repayment plan and estimated I could have my home completely paid off in 10 years. I was talking to a middle-aged coworker about our respective mortgages and I mentioned offhand when I would have it paid off and this was his response...

"Well, sure, we would all own our homes that quickly, but you are going to move into a bigger house in a few years".

I told him it was 2 bedrooms which was fine with me until I had more than one kid, then I asked him why I would move into a bigger house before that. He told me that 'no one stays in their first house'.

The attitude of trading up and having a mortgage your whole life seems to be huge amongst the boomer generation...I really don't get it.
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Old 11-02-2010, 08:24 AM
 
8,265 posts, read 11,438,033 times
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Same here.

The wife and I have a two bedroom townhome just under 1100 sqft, we had it completely paid off in our 30s. No interest in taking care of or paying for anything bigger.
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Old 11-02-2010, 08:37 AM
 
Location: Near a river
16,042 posts, read 20,535,432 times
Reputation: 15749
Quote:
Originally Posted by hnsq View Post
I can't tell you how happy I am to see someone else who realizes this. I am 24 years old and bought my first home a year ago (a smaller home for this area - 2 bedrooms/1 bathroom when most are 3-4 bedrooms/2 bathrooms). I put together a debt repayment plan and estimated I could have my home completely paid off in 10 years. I was talking to a middle-aged coworker about our respective mortgages and I mentioned offhand when I would have it paid off and this was his response...

"Well, sure, we would all own our homes that quickly, but you are going to move into a bigger house in a few years".

I told him it was 2 bedrooms which was fine with me until I had more than one kid, then I asked him why I would move into a bigger house before that. He told me that 'no one stays in their first house'.

The attitude of trading up and having a mortgage your whole life seems to be huge amongst the boomer generation...I really don't get it.
I agree with all the recent posts about taking on mortgages over one's head and trading up (well, those days are probably over, and anyway, the huge wave of boomers is looking to trade down.)

I'm interested to know more about the percentages of income that basic expenses took up, between the adults of the 1950s and 60s and the adults of today. I do know that in my family (of origin) of 7 in the 1960s, only my dad worked. He did not make much as he was not college educated and not in a high-paying field. We all had a nice house (on mortgage), nice clothes, great meals with good cuts of meat, money for annual 2-week vacation, and my mother, even as a widow without much savings and certainly no investments (other than the house) was able to pay for the weddings of 4 daughters and put two through college (the tuition--no more than $2K per year at pretty good schools). And yes, my parents traded up from a 5-room house in a ghetto area to an 8-room house in a middle class neighborhood. The only debt they ever had was a "charge account" at a local dept. store.

Can someone put that into the perspective of today?
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Old 11-02-2010, 09:11 AM
 
8,265 posts, read 11,438,033 times
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Quote:
Originally Posted by newenglandgirl View Post
* I heard last night on the news that any tax on an income of $500K per year (if there were to be one!) only applies to their first $100K. Funny how that doesn't work for the rest of us.
Okay I think I finally figure out what you are referring to here. You had me dumbfounded.

Do you mean the new proposed legislation in Washington State where they would have a special tax only on the super rich? I assume that is it because the example I saw showed how a couple making $500k would pay this additional wealth tax (5% on income over $400k) on only the $100k that was over the threshold.

You do realize Washington State has no income tax so this is hardly some sneaky exception letting the rich get a special break, they are in fact adding a new tax just for the high income earners?
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