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Mr. Read was born in 1922. When people of that generation put money in the bank it accrued interest. Real interest. Today, leave $25 in your local bank for a year and they'll add a couple of dollars to it. Put $25,000 in a high interest account and it might make ... what? $200 a year? Didn't used to be like that. According to the Bureau of Labor Statistics, the minimum wage of $1.60 an hour in 1968 would be $10.90 today when adjusted for inflation, so he had money to save since he had no dependents. An expert told CNBC that to get the amount he ended up with, he would have had to invest "about $300 a month at an 8 percent interest rate over 65 years."
I'm not saying Mr. Read didn't live frugally and save like crazy. He did. But he did it in a totally different economy than the one we are experiencing today. To assume people can accomplish what he did in the current environment (especially if they have and support a family) is naive. Furthermore, most of us don't live to be 92, a long run at investing wisely.
Current reports indicate that the Vermont man wasn't putting dollar bills in his mattress. His estate included property and stock holdings in AT&T, Bank of America, CVS, John Deere, General Electric, and General Motors.
From 2010 to 2015 housing sure went up around here. Wages have not moved much. We have been getting these 2% increases each year for a few years now.
In 2010 we wanted to spend less than $300,000 for a home and ended up spending a little more.
In 2015 our budget would have to jump up to $430,000 or more for the same homes.
I realize that realestate is local, just telling you how it is in my area.
same here in ny . even at the peak our luxury manhattan co-ops we owned sold for only 10% less and wages were stagnant for more than a decade or longer. in inflation adjusted dollars they were down.
Last edited by mathjak107; 02-14-2015 at 04:49 AM..
many areas never saw anythng close to that drop. many areas also rebounded quite a bit.
while wages have been flat they have fallen quite a bit on an inflation adjusted dollar basis. in fact we have not seen a real wage increase trend since the 1980's.
what skewed much of the statistics on it is wages for women have increased and that tends to make the numbers for all look better but when broken out by male and female real wages have declined for men..
Last edited by mathjak107; 02-14-2015 at 04:49 AM..
Mr. Read was born in 1922. When people of that generation put money in the bank it accrued interest. Real interest. Today, leave $25 in your local bank for a year and they'll add a couple of dollars to it. Put $25,000 in a high interest account and it might make ... what? $200 a year? Didn't used to be like that. According to the Bureau of Labor Statistics, the minimum wage of $1.60 an hour in 1968 would be $10.90 today when adjusted for inflation, so he had money to save since he had no dependents. An expert told CNBC that to get the amount he ended up with, he would have had to invest "about $300 a month at an 8 percent interest rate over 65 years."
I'm not saying Mr. Read didn't live frugally and save like crazy. He did. But he did it in a totally different economy than the one we are experiencing today. To assume people can accomplish what he did in the current environment (especially if they have and support a family) is naive. Furthermore, most of us don't live to be 92, a long run at investing wisely.
Current reports indicate that the Vermont man wasn't putting dollar bills in his mattress. His estate included property and stock holdings in AT&T, Bank of America, CVS, John Deere, General Electric, and General Motors.
higher inflation and higher interest rates go hand in hand . for most of history 1 year cd's averaged 2% real returns before taxes.
while better than negative real return rates like now they are hardly enough to make a real difference.
in fact most folks have little money saved to even get interest on. those who do made lots of money in bonds and equities assuming they didn't make the mistake of hiding under a rock in a bank after the fed warned about that..
the typical american family has saved almost 4k a year in debt service because the rates are so low and that is more than they would ever have seen in interest on the sums of money they have,
Last edited by mathjak107; 02-14-2015 at 04:44 AM..
You're living in a fantasy world. Where I live in Santa Clara County, CA, the median household income is under 100K, and we're the highest income county in the nation.
This goes right back to people only comparing themselves to those who have more and ignoring everyone else further down the economic ladder.
median incomes does not mean middle class lifestyle. all it means is this is all they have to live on like it or not.
here in nyc the median income is 43k in queens. 43k buys you a just above poverty lifestyle. certainly it does not buy a middle class lifestyle. a true middle class lifestyle in queens not manhattan takes 2 to 3x that amount.
our rent in a rent stabilized building and healthcare costs alone ( health insurance and long term care insurance along with healthcare/dental cost) come to 43k with no real emergencies. that 43k includes nothing else in life yet.
this year dental is costing me 12k and marilyn 4k so already we will be well on to 50k in just rent and healthcare.
in no shape ,way or form do median incomes ever represent what is or isn't a middle class lifestyle .
a middle class lifestyle like the term millionaire connotates a certain way of life.
a home , two cars , 2 kids etc is all a connotation of the proverbial middle class lifestyle.
try doing that on median incomes in most areas and you will live a pretty stressful financial life if you can even do it at all.
Last edited by mathjak107; 02-14-2015 at 04:47 AM..
for an economy that counts on consumer spending for 70% of its total gdp don't underestimate the effects of major cuts in spending. consumers make or break the largest companies just by shifts in spending. look at the failure of company's like block buster , jc penny etc etc.
even microsoft stopped growing as folks stopped buying lap tops and desktops for browsing and no longer need windows. they are treading water with different attempts at different products trying to capture that consumer dollar.
He was a wise invertor who did not spend his profits but reinvested them again wisely,
which those who know how to do the same will be young millionaires.
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YUP! And I have found I make a LOT fewer financial mistakes now that I am over 60......
