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I recently helped to settle several estates for elderly widows...
They were all great and gracious people that lived on $1800 to $2200 a month in the SF Bay Area and none had over 30k incomes and yet they had great lives.
All owned homes free and clear, most owned nice low mileage 15 to 20 year old cars like Corolla or Civic, they tithed to their church, did activities with full social lives...
To a last one they really didn't spend money for things... they had their furniture and clothes and loved spending each day gardening or doing other things around the house like quilting from scraps...
It really is amazing how little one needs once they are debt free and have medicare...
One of the ladies with $1900 income still tithed to her church a month's income each year and others never forgot a grandchild's birthday with a 50 or 100.
They simply loved the life they had created.
The lady across the street passed at 102 and had been a widow 21 years... her only child sold the house for 650k and the inspector marveled that no deferred maintenance was found... they bought new in 1957...
I did find it strange that all the homes were sold... no one in the family wanted them to live in or for investment... even with low Prop 13 tax base... it was really about liquidating for cash.
I have learned a lot from the seasoned citizens I have come to know... like taking in wash and borders to pay the mortgage in the Great Depression and living in the same home for 65 years...
Bay Area + <30K income = does not compute UNLESS you somehow own your home.
I'd just LOVE LOVE LOVE to see ANY of these people TRY to RENT there on $1800 to $2200 a month.
Likely have not amassed a seven figure net worth either.
I have had many tenants, who were paying me 60% of the monthly mortgage payment each month. Did that come out correct? Rent for a single apartment = 60% of the mortgage P+I for the entire building.
I paid nothing on a monthly basis to live there, and to own the building. The tenants paid me. One property we owned we had four tenants, each was paying us roughly 60% of the monthly mortgage payment for the entire property.
I have had a number of tenants whose salary income was greater than my salary income.
Nearly all of them paid into Income Taxation too. Which I obviously have not paid into for many years. Their costs were far greater than my costs, with their rent and the taxes they paid.
The majority of people will end up with nothing, living on a minimal SS check. If you have never known anything better, it shouldn't bother you.
The mere thought of paying way more to get way less housing causes me extreme chafing.
Put another way, I don't mind paying X for Y when my neighbor pays X for Y, but I intensely resent paying 2X for Y when my neighbor pays X for 2Y - and then my neighbor blames my OVERSPENDING for my paucity of net worth.
Very few people will inherit enough wealth to for a dynasty. Your strategy is to sit on your ass until someone hands you a bunch of money. Not gonna happen, Leroy. We are spiraling into insults because your strategy would only appeal to an idiot.
Who said it was a strategy? You create new strawmen at an astonishing rate, Larry.
Bay Area + <30K income = does not compute UNLESS you somehow own your home.
I'd just LOVE LOVE LOVE to see ANY of these people TRY to RENT there on $1800 to $2200 a month.
As stated they ALL own their homes Free and Clear and some have lived in them for 65+ years... so they were paid for decades ago...
They jumped in and locked in their housing costs through ownership and Prop 13 provided stability as to Property Taxes... just as promised.
My other point is even with the low Property Taxes that could have stayed with the property all of the heirs in my examples ALWAYS choose to sell and cash out... many just saw it as a process to get through... get rid of the personal items... keep a few things and sell ASAP
.
So even though Prop 13 kept Property Taxes in check, the low property taxes were not enough of an incentive to hold onto the property.
The 102 year old widow that bought her home new in 1959 was paying $2200 per year in property taxes... that jumped to $10,000 when the property was sold.... just as promised.
The California Tax Assessors are enjoying record windfalls with all the longtime owners passing and no one wanted to keep the property in the family.
As stated they ALL own their homes Free and Clear and some have lived in them for 65+ years... so they were paid for decades ago...
They jumped in and locked in their housing costs through ownership and Prop 13 provided stability as to Property Taxes... just as promised.
My other point is even with the low Property Taxes that could have stayed with the property all of the heirs in my examples ALWAYS choose to sell and cash out... many just saw it as a process to get through... get rid of the personal items... keep a few things and sell ASAP
.
So even though Prop 13 kept Property Taxes in check, the low property taxes were not enough of an incentive to hold onto the property.
The 102 year old widow that bought her home new in 1959 was paying $2200 per year in property taxes... that jumped to $10,000 when the property was sold.... just as promised.
The California Tax Assessors are enjoying record windfalls with all the longtime owners passing and no one wanted to keep the property in the family.
All I can say is that if I ever inherited a house, I would hold onto it for dear life and never sell it if I could help it. A hedge against rent inflation is the best I can hope for.
The difference with Millennials is that I think we see the writing on the wall. For someone my age (33), I can remember how "good" things looked when I was in high school during probably the greatest economy the U.S. ever had. When I was graduating high school I was pretty sure it was all going to be good.
Then it all went to crap. 9/11 happened, then the Iraq War, then 2008 & generally speaking we're still caught in the doldrums of that aftermath going on 8 years later. Looking forward, I just don't see the kind of happy times we enjoyed in the late 90s happening again. For the stock market to replicate its success from the 80s to 2000 the Dow would need to go up to, what? 60,000? by the year 2036. Does anyone think that will happen? Does anyone think interest rates will stay at 0.0% forever? When they go up to even just 1-2% the market is going to have a freak-out.
I think we see that the U.S. is on, at best, a flat trajectory. There are jobs out there but the idea we were going to be more successful than our parents has kind of dried up. Maybe this was how people felt in the 70s or the 30s, but even then, at least college and health care were cheap.
This board is also populated by super-frugal people not representative on the general population. I see older people in Starbucks buying coffee all the time.
You have a distorted view of how you make money in the stock market. I remember the early '80s. The Dow dumped to 600, the best buying opportunity since the Great Depression. I was broke. It was painful to watch. In the '90s there were a couple of crashes, and I didn't have a chance to take advantage of them either, but when 2001 rolled around I was better set. The dotcom bust irritated me enough that I switched all my stocks to cash. Then 9/11 happened, and it actually closed the NYSE for a few days. Stocks went into a death spiral, and I was able to pick up some nice bargains. For the next 5 years I just saved and invested, until gasoline hit $4 a gallon. I figured it would suck the life out of the economy, so I switched everything to cash in 2006. It was over a year before the downturn, but it happened. Then the banking crisis hit and things got immensely profitable. By 2009 I had doubled my assets. Notice I don't say, "doubled my money," because stocks are not money, they are assets. If you own twice as many shares, you have doubled your assets, but stocks are not money until you sell them and pay the capital gains tax.
There will be another panic someday. If you position yourself to take advantage of it, you can make a tidy profit.
As for college, you are playing into a saturated market. There are far too many college graduates for the economy to absorb them. Your best bet right now is to pick an occupation that requires a license or certification. That means any Joe Schmoe off the street can't compete with you for a job. Your state maintains a list of all occupations that require licensing. Pick one that pays well, get into a program and go to work. At 33 you are getting pretty old for many programs, but you should be able to find something. By the time you are in your mid-40s you should be well established, and you will have 20 years to build assets for retirement. In that 20 years there will be 2 or 3 stock market crashes that will let you get ahead. Just remember, the time to buy is when everyone else is jumping out of windows, and the time to sell is when everyone else is patting themselves on the back about how wonderful their investments are doing.
I bought 10 acres for $40,000 @6.5% interest?!?!?!??!?!?!? lol............try adding a zero to that for 2016 dollars. Those were completely different times economically back then.
But minimum wage was only $1.35 per hour. I once worked for an agency of the county government during the Summer, doing hard, adult labor and got 75 cents per hour.
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