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That is the Harvard website. Every parent probably does send their kid to Harvard if they get in. How many people do you know turning down Harvard because they can't afford it?
I thought it was fairly common knowledge that kids with household incomes of less than 100k paid next to nothing to attend most of the Ivy's.
What would be fair is comparing a house built in 1980 to that same house with no modifications today.
It wasn't "next to nothing" when I was that age. It was still a considerable amount of money -- particularly for the students who had no financial help or family support. (And this is the student archetype I've been running with throughout this thread. What could such a hypothetical student do entirely on his or her own?) If attending Harvard is a $12K per year proposition for the bright, indigent student of 2015, well there's the solution right there. Plug half a million in assets into the financial calculator, and the costs go up to $30K per year. That's still doable for the family making $75K per year. Not easy. But doable.
As for housing, I think it would be MORE fair to compare a house that was built earlier than 1980 (because, seriously, how many young minimum-wage earning buyers were buying new construction as a first house), and comparing it to today.
The post about loan officers laughing at a minimum wage earner today is probably the reality. The reality used to be that a single wage earner (a retail clerk, for instance) could be the sole breadwinner and support a family. As time progresses, the sole breadwinner becomes dual income. And expectations have to be lowered to reflect worsening buying power over time.
And that's the crux of the matter -- worsening buying power over time. It's not just wages. It's wages compared to costs that matter. I cannot believe people are arguing about this. It's like arguing over average automobile MPG rates over time. They've been climbing. Anyone can see that. It's easily googled. And buying power has been slipping over the same period of time -- anyone can see that. It's easily googled.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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Originally Posted by ScoopLV
It wasn't "next to nothing" when I was that age. It was still a considerable amount of money -- particularly for the students who had no financial help or family support. (And this is the student archetype I've been running with throughout this thread. What could such a hypothetical student do entirely on his or her own?) If attending Harvard is a $12K per year proposition for the bright, indigent student of 2015, well there's the solution right there. Plug half a million in assets into the financial calculator, and the costs go up to $30K per year. That's still doable for the family making $75K per year. Not easy. But doable.
As for housing, I think it would be MORE fair to compare a house that was built earlier than 1980 (because, seriously, how many young minimum-wage earning buyers were buying new construction as a first house), and comparing it to today.
The post about loan officers laughing at a minimum wage earner today is probably the reality. The reality used to be that a single wage earner (a retail clerk, for instance) could be the sole breadwinner and support a family. As time progresses, the sole breadwinner becomes dual income. And expectations have to be lowered to reflect worsening buying power over time.
And that's the crux of the matter -- worsening buying power over time. It's not just wages. It's wages compared to costs that matter. I cannot believe people are arguing about this. It's like arguing over average automobile MPG rates over time. They've been climbing. Anyone can see that. It's easily googled. And buying power has been slipping over the same period of time -- anyone can see that. It's easily googled.
We bought our first house in 1978, for $50,000. Without the income from both my wife and I we would not have qualified for the $369 mortgage payment at 7%. I was making more than double minimum wage then at about $8/hour, she made a little less.
Yes, and I'm reaching back to the 1960s for when the single breadwinner could support a family. Not your particular era, but still the Boomer era.
For the umpteenth time -- 1968 was the best year to be a minimum wage earner. As we progress year to year, buying power worsens.
So let me ask you -- how would you go about buying a house today if your younger self was moved to 2015 and earned double the minimum wage ($14.50) and your wife made the minimum wage of $7.25. How much house would you two be able to afford?
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
44,642 posts, read 81,386,567 times
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Quote:
Originally Posted by ScoopLV
Yes, and I'm reaching back to the 1960s for when the single breadwinner could support a family. Not your particular era, but still the Boomer era.
For the umpteenth time -- 1968 was the best year to be a minimum wage earner. As we progress year to year, buying power worsens.
So let me ask you -- how would you go about buying a house today if your younger self was moved to 2015 and earned double the minimum wage ($14.50) and your wife made the minimum wage of $7.25. How much house would you two be able to afford?
Good point.
I couldn't afford to buy the house I'm in now with our current incomes, despite combined income in the low 6 figures. We bought at under $200k and it's now worth close to $700k. I bought my first new car for $2,500 in 1973, when I made minimum wage working full time while going to college and the payments
were $74. I had a 2 bedroom apartment for $150. Even in the 60s, though, I can't imagine buying a house on just double minimum wage. My parents bought in the early 50s and moved up to a much bigger home in 1962. Only my father worked but he had a job that was probably 7-8 times minimum wage in both cases.
First, minimum wage here is higher and going up... it will soon be $15 in several Bay Area locations.
Second, I would have savings... in my case... I sold my prized 1968 Z28 Camaro for $6,800 to a collector that flew out from the East Coast... sad to see it go, but it went to a good home... I had almost $3,000 into it and it was a show car when I was done... also, I have been working and paying into Social Security since age 12...
So start with savings or by selling assets...
Second... no bad credit... notice I did not say you need good credit. So many young people have bad credit... it takes effort to have bad credit and no credit is better than bad credit.
Third... Look for the least expensive home in your area and start there...
If you still can't swing it... look to partner with someone... a younger sibling, friend and jointly apply.
My second purchase was a duplex... I lived in the granny unit out back and rented out the 3 bedroom home up front... the rent from the 3 bedroom counted as income when calculating if I would qualify.
I helped a friend and his wife... married at age 22 buy a 4-plex... they lived in the one bedroom unit and had rent coming in from the other 2 two bedroom units... later they sold their 4-plex and bought a single family with the proceeds for their growing family...
As a side note... seems just about every kid has a $400 phone they walk around with... I know teenagers with $60 or more monthly phone bills..
Fourth... Avoid with a passion recurring monthly expenses...
This means I do not own a cell phone, never had cable TV... never bought a car on time or anything else for that matter except Real Estate with a first mortgage secured by a deed of trust...
It really is not that hard if you set realistic goals and avoid all the trapping people see as essential...
No lie... when I managed low-income units... I would have families on Section 8 that spent $200 a month on cable and cell phone... that's $2400 a year that once spent is gone forever.
When I was a kid... as in freshman year in High School... I got a Saturday job a classic car restoration shop and parts business.
There was zero connection except that I would bicycle over to the shop on Saturdays because I was fascinated being around all the old cars...
After a couple of months... the owner asked how old I was and if I wanted a job... told me to ask my parents and come back with a work permit... this was in the 70's
Anyway... it was a great job for me... met lots of well to do people.... many retired too.
I was like a sponge and would listen behind the parts counter about business deals they had going on.. in time, I asked for advice.
Almost down to the last one... these guys all told me to get an education and buy property and the sooner the better. As a sidebar... some were only high school graduates if that before going off to serve... the ones without college degrees always felt it was used against them even though they were very successful.
Many had good businesses.. they were owners of construction companies, Doctors, Lawyers, Judges, CPA, Airline Pilots, etc...
All of them said if they had it to do over again... they would have started buying property sooner instead of waiting...
One guy.. had an appliance and TV store... over the years he bought the building and eventually the city block where his business was located... in the end... he said business was good... but his wealth came from investing his company profits into the nearby real estate...
I was lucky to be in a situation earning a few bucks on Saturdays and more lucky to have made so many friends from what is called the greatest generation... these guys were more than willing to give the kid advice... they taught me the time value of money, investing in appreciating assets, the beauty of leverage, compounding, the rule of 78 and so on...
They said Real Estate is unique in that if can be bought with little down, can generate income, is taxed favorably by the government and it can all be insured against loss...
Fast forward to today and most have passed away... and the ones still around still call me the kid...
Last edited by Ultrarunner; 01-26-2015 at 02:12 PM..
I couldn't afford to buy the house I'm in now with our current incomes, despite combined income in the low 6 figures. We bought at under $200k and it's now worth close to $700k. I bought my first new car for $2,500 in 1973, when I made minimum wage working full time while going to college and the payments
were $74. I had a 2 bedroom apartment for $150. Even in the 60s, though, I can't imagine buying a house on just double minimum wage. My parents bought in the early 50s and moved up to a much bigger home in 1962. Only my father worked but he had a job that was probably 7-8 times minimum wage in both cases.
And this leads me right back to my assertion that millennials have it worse because they don't have the buying power starting out that older generations did. NOT because they're lazy, spoiled and have a grossly exaggerated sense of entitlement. (Although I'm sure many do.)
The Boomer insistence that "but but but.... our horrible dustbowl-level recession of the mid 1970s or the very early 1980s" doesn't hold water. You bought your house in 1978 -- that's a year Boomers will point to as "the horrible, awful, recession times of high interest rates and no jobs" -- and you could STILL buy a house with income that wasn't all that great. Boomers of that era STILL had it better than the person just starting out today. They just don't want to admit it because then they might need to rethink their positions about things like minimum wage or the social safety net.
When a centenarian C-D user drops by this thread and says, "Let me tell you about bad. When I quit school in the 1930s...," I will quickly concede that person had it the worst of all.
My point is, always was, and will be for the foreseeable future that Millennials have a worse economic outlook, therefore we should expect that they will have worse outcomes as a whole.
The house I bought was one no one wanted, it languished on the market for more than a year at 34k... it was the least expensive single family home in Oakland at the time with utilities on...
The Realtor that showed it to me kept pestering me for an offer... told her I was not interested... she just kept coming back looking for an offer... I kept saying no and then finally said... it's not worth any more than 11 to 12k and even that was a stretch.
To my amazement, she wrote it up at 11,500 with a $100 earnest money...
To my shock she called later that night to congratulate me!!!
They had a good laugh when she had large pictures made for the Realtor Convention that year.
My own family thought I had made a huge mistake and yet I could not have been happier... if I posted pictures... you would think it was crazy too... my step grandfather said he didn't have the heart to tell my I had just flushed my life savings.
OK... I found a couple of pictures of my first home.
As I've said to adnauseum... this home was scheduled for a condemnation hearing and I saved it.
The pictures are the graphic proof of what I did to become a homeowner and yes I bought it working minimum wage jobs and selling my car...
It's much too easy to simply dismiss by saying these opportunities are no longer available... these opportunities are always available!
30 years later I still own it and have only rented to two families since I moved on to my next "Fixer"
It's been years since I looked at my old pictures and I have City Data to thank for motivating me to dig out the old albums...
I also have pictures of the all the homes I've bought... this one was by far the worst!!!
Got to start somewhere and paying your dues is part of the process.
What it did was allow me to get my foot in the door at 22 and own my own Bay Area home and I had NO MORTGAGE... spent the better part of a year, nights and weekends fixing it up... it went from the neighborhood dumping ground to the nicest little cottage in blocks... made lots of new friends... old time neighbors were willing to give advice and some just thought it entertaining!
PS... the garage was beyond repair so I knocked it down...
Last edited by Ultrarunner; 01-26-2015 at 03:47 PM..
My point is, always was, and will be for the foreseeable future that Millennials have a worse economic outlook, therefore we should expect that they will have worse outcomes as a whole.
As expected, you did not address a word of that article I linked. Not. One. Word.
I show, again and again, that a student at ANY TIME DURING THE 1960s through 1980s could attend a great university and pay for it with the kind of minimum wage jobs available to students at that time.
The problem is that it's all BS. I did it, and I know. I started college in 1965. Room and board, tuition, fees and books at an economical state university ran $2500 a year. My summer job paid $1.25/hour. I worked 10 hour days 6 days a week, so my gross pay was $90 per week, or about $83 a week after taxes. By mooching off my parents in the summer and being frugal, I could clear about $750 in the 10 week summer vacation. I had a really good medium skill part time job as a radio station engineer that put another $1000 in my pocket during the school year. I was able to make up the $800 a year shortfall by tapping savings from work during my teen years. By the time I started my Junior year I was tapped, but made up the difference by enlisting in the Army Reserve as part of the ROTC program. That paid a stipend of $50/month not subject to social security withholding. It was a big boost, but came with a commitment to 4 years of active duty and 20 years of reserve status, so the step was not taken lightly. I almost enlisted in the regular army, because the GI Bill paid the same $50/month for every month on active duty, with no other obligation, and I could have saved myself a year on active duty.
Yes all the numbers are bigger today, but qualitatively, my experience was not much different from what is facing today's millennials. It was an 8 year commitment to get my degree, plus 5 years of summer and weekend work as a teenager to pay for it. It was nothing like the picture you paint of sailing through a 4 year degree by working part time. It's why I have trouble believing your are as old as you say you are. You seem to think the '60s were some kind of worker's utopia. It wasn't.
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