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Burger flippers could spend less and save more if they could buy homes and stop paying a premium to make their landlords wealthy.
Of course, if you own $250k of real estate outright (live in one room and rent out the others to cover property taxes, utilities, insurance, and maintenance) you can save even on minimum wage, but so could you if you were earning dividends on a $250k stock portfolio. The problem is when you just don't have capital...
I think there are many who simply don't realize how soon they will be old. It arrived rather quickly. I've heard people say they will live on their social security. I've also heard people say they were sure a lottery win was in their future. If people have lived in relative comfort, having a huge change occur doesn't seem real.
If people have lived in relative comfort, having a huge change occur doesn't seem real.
^^This^^
Everyday consumerism is fairly pleasant. The potential pain of poverty in old age doesn't seem real. It's the way our brains are wired. We're wired for short term thinking, for valuing the present much more than the future....Unfortunately, everything in society encourages this....from the lack of financial education in the schools to the rampant consumerism on TV (both explicitly in commercials and implicitly on the shows themselves).
Also, the whole concept of the average person being able to live on investment income without having to work is a foreign one to most people, and a relatively recent possibility, historically speaking. Most people are conditioned into thinking that the only serious way to earn money is by working or by living off various forms of government transfers (Social Security, disability, welfare, etc.). Many people still don't believe investment income is a real possibility, even though investing in the stock and bond markets is now cheaper and more accessible to the average person than it has ever been.
Burger flippers making $15,000 a year can afford a 400-sf house on a 2,500-sf piece of land. Minimum lot size requirements exist pretty much everywhere except Unashack territory. How can they buy a house today?
In other words government is stopping burger flippers from buying homes.
??? How does someone without marketable job skills, and without two X chromosomes (and the appealing features that go with them), and without the financial resources for education or training, earn $40k a year?
So then move somewhere you can afford or seek education.
My pity for the burger flippers went away when I started a bookie job for an apartment owner and saw some of them getting up to $1400 a month in rental assistance every month. That's 70% of my mortgage they get free and clear every month somebody else is paying for.
Most americans budget based on their Gross income, yet they are forgetting the govt takes away 40% of their incomes.
Need to budget based on net income. Gross income is fake.
That is a ridiculous statement "most" Americans after tax paycheck is about 74 to 80 percent of their gross. 6% of that "tax" is the only retirement income a great majority will have to live off of.
Any American paying 40% to taxes is grossing so much, if they are suffering economic hardship, it is either due to extreme life circumstances or poor financial habits.
The taxes we pay are used to back an economic budget that supports a world reality where Americans can earn and consume a greater share of all wages and resources than the other 90% if the world.
That does not sound like a reality to complain about.
probably the fact that 1 out of 3 young adults live at home is a huge factor in peoples failure to prepare for retirement. the other is that most parents are paying for their adult childs college education.
You can take two people with different mindsets and motivation and stick them in the same situation and one will find a way to prosper regardless. They always do.
it is alway like that, you will have those that motivate themselves ,are creative and find away. the rest just blame everyone and everything for their failure.
i still know guys i grew up with in the projects who never amounted to anything and still live there themselves today on low low incomes. .
many of us went on to be successful or at least earn a decent adult wage.,
Job security is a myth in corporate america these days which makes the future look bleak & dreary.
Baby boomers didn't grow up in an era where jobs were scarce and the cost of living was sky high.
If anything history has taught us, the baby boomers were the most materialistic generation ever.
the mid 1960's had the cost of living rising at an alarming rate ,far higher than we have seen since the 1980's.
i also guess the double digit inflation of the 1970's and 80's don't count.
in fact the years starting from 1965 until the 1980's were some of the worst conditions we have ever had over a generation including those that had the great depression in their time frame.
in fact the only group of retirees to fail were the ones who retired in 1965-1966 and had to survive financially over the next 30 years.
the average mortgage rate of 8% during my life time was low by the standards of the last 13 years?
i don't know how old you are but in the 1970's i got dumped right into vietnam, high unemployment , high inflation and soaring energy costs.
jobs were like ice in a dessert my friend.
but 40 years later many of us turned out okay. baby boomer kids are first starting out and paying their dues like we did. they too may end up just fine.
don't forget baby boomer parents were dumped into the world wars with a world self destructing, the likes of which none of us can imagine. they too came out okay.
it always looks like those before them had it easy. the truth is our kids kids will most likly be saying that about them too one day.
our kids were dumped out into 2 back to back recessions just like were dumped out in the 1970's.
while things for them are a whole lot less bad they are getting better.
my son and daughterinlaw landed jobs earning more day 1 than i am 40 years later on my job .
in fact while the under 24 group is struggling the 25-35 age group according to the financial census is doing quite well .
Last edited by mathjak107; 01-13-2014 at 04:21 AM..
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