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      10-11-2019, 11:59 AM   #89
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Originally Posted by MPBK View Post
Yeah, but how much did she pay the bank in interest over those 5 years?
If they borrowed the whole amount, even with a high interest rate you're looking at ~$3k in interest....still not bad. $10k over 5 years for a car is awesome (not including gas/oil changes/insurance/etc)
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      10-11-2019, 12:09 PM   #90
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The older I get the more I notice the complete lack of sound financial decision by basically 75% of the population. Whats worse - they don't seem to care. It's like the thought of retiring or what happens when they are 70 years old is someone else's problem. I can't tell you how many "fatherly" talks I have had with employees over the years, some older than me, about finances. Now I am not financial genies by any means, but I am 50 and could retire today and be OK. I don't want to be just OK, so I am still working. Plus I like my job.

I worked for a manufacturing company prior with a nice sized skilled laborer pool that made pretty decent wages. We in the offices were compensated well too, but there were a few booming years where the bonuses were staggeringly good - as in we thought the owners would cap them but did not. Everyone in the office still had the cars they had 4-5 years ago and every car in the wage roll parking lot turned over to not only new cars....but NICE new cars. Being an exec and on the HR team - I was a part of helping with the 401K program - so I saw what these people had saved. All those great years they turned down the tax safe haven and company match opportunities and instead bought brand new cars, motorcycles, and other toys. It was hard for a conservative guy like me to watch, but everyone has to walk their own path.

I never say a word unless my advice is asked, but it is very satisfying when you open the eyes on a worker early in their career and see them start making saving habits that will change their whole lives - and maybe their kids lives too.

It is scary how fast the "get it now and worry about paying for it later" ideology has progressed. Weighing the up/down sides to debt are of little concern to a majority of Americans I believe. As long as they hear a YES - they are willing to sign on the dotted line. I'm sure we have all seen the surprised look at the dealers when the light bulb just went off understanding they have a different critter in front of them that pays attention.
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      10-11-2019, 03:58 PM   #91
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Originally Posted by unluky View Post
The older I get the more I notice the complete lack of sound financial decision by basically 75% of the population. Whats worse - they don't seem to care. It's like the thought of retiring or what happens when they are 70 years old is someone else's problem. I can't tell you how many "fatherly" talks I have had with employees over the years, some older than me, about finances. Now I am not financial genies by any means, but I am 50 and could retire today and be OK. I don't want to be just OK, so I am still working. Plus I like my job.

I worked for a manufacturing company prior with a nice sized skilled laborer pool that made pretty decent wages. We in the offices were compensated well too, but there were a few booming years where the bonuses were staggeringly good - as in we thought the owners would cap them but did not. Everyone in the office still had the cars they had 4-5 years ago and every car in the wage roll parking lot turned over to not only new cars....but NICE new cars. Being an exec and on the HR team - I was a part of helping with the 401K program - so I saw what these people had saved. All those great years they turned down the tax safe haven and company match opportunities and instead bought brand new cars, motorcycles, and other toys. It was hard for a conservative guy like me to watch, but everyone has to walk their own path.

I never say a word unless my advice is asked, but it is very satisfying when you open the eyes on a worker early in their career and see them start making saving habits that will change their whole lives - and maybe their kids lives too.

It is scary how fast the "get it now and worry about paying for it later" ideology has progressed. Weighing the up/down sides to debt are of little concern to a majority of Americans I believe. As long as they hear a YES - they are willing to sign on the dotted line. I'm sure we have all seen the surprised look at the dealers when the light bulb just went off understanding they have a different critter in front of them that pays attention.
Housing prices have gotten much more expensive in recent years and many employees such as you describe can't afford a house. So they spend what they would have spent on a mortgage on a car payment.

Is that what I would do...no. But I am 74 and debt free. I feel sorry for the next generation. The US dream is rapidly failing and the new generation will have trouble living up to the standards of their predecessors.
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      10-11-2019, 04:16 PM   #92
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Originally Posted by SteveinArizona View Post
Housing prices have gotten much more expensive in recent years and many employees such as you describe can't afford a house. So they spend what they would have spent on a mortgage on a car payment.

Is that what I would do...no. But I am 74 and debt free. I feel sorry for the next generation. The US dream is rapidly failing and the new generation will have trouble living up to the standards of their predecessors.
Well when I was 20 I could not afford a house either. But instead of saying F it and buying a corvette, I started saving to have a down payment. Then I transferred so I kept saving, so instead of just a down payment, I could afford a 10 year loan on my first house which I paid off in 7. Made a little profit on that house when I sold which I rolled into my current house that I then had almost no loan for.

While I agree that times are different now, throwing their hands up and saying F it I'll just buy a new car every other year and take the depreciation up the whazzo and then go protest at how "unfair" life is will not help their situation.

You certainly did not get to 74 and debt free without sacrifices - I'd have to guess you made a lot of them. Today's generation seems to be unwilling to make any sacrifices when it comes to their long term happiness.

I worked for $3.35 per hour for a few years as a kid (minimum wage) and I bet you were paid even less at one time. They also have to look in the mirror and make wise choices. It can still be easily done, but you have to be willing to sacrifice like we did.

We hired a couple of high school kid brothers to mow our company lawn 5-6 years ago. They busted their butt with their 2nd hand equipment and did a great job and we spread the word. They worked nights, weekends, holidays (snow removal) whatever it took. Now they are in their 20's and have a crew of about 20 guys, have at least 1/2 the businesses in town and a ton of residential. They do landscaping, mowing, snow removal, etc. New nice equipment and the whole nine yards. They were not at home playing video games or leaving at 5 to go drinking - they sacrificed and busted their butts and have a thriving business now. They took the opportunities that the USA offered them and applied the right amount of sweat and made it happen.
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      10-11-2019, 04:35 PM   #93
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Originally Posted by SteveinArizona View Post
Housing prices have gotten much more expensive in recent years and many employees such as you describe can't afford a house. So they spend what they would have spent on a mortgage on a car payment.

Is that what I would do...no. But I am 74 and debt free. I feel sorry for the next generation. The US dream is rapidly failing and the new generation will have trouble living up to the standards of their predecessors.
Nope.

With exception of certain markets where housing has gone insane, overall as a country, home prices per square foot are actually cheaper today than they were 50 years ago, when adjusted for inflation.

Bottom line - it costs less to buy a home today than it ever has in modern history in the United States. People are just choosing to buy nicer and larger homes than they should be buying.

Not the fault of the costs of home ownership - the fault of people today making dumb ass financial decisions.





https://www.aei.org/carpe-diem/today...last-40-years/
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      10-11-2019, 06:57 PM   #94
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Originally Posted by Run Silent View Post
Bottom line - it costs less to buy a home today than it ever has in modern history in the United States. People are just choosing to buy nicer and larger homes than they should be buying.

Not the fault of the costs of home ownership - the fault of people today making dumb ass financial decisions.
...and then expect those of us who bought responsibly-sized homes that we could easily afford pay to bail them out through foreclosures and mortgage modification.....
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      10-12-2019, 09:17 AM   #95
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Originally Posted by Run Silent View Post
Nope.

With exception of certain markets where housing has gone insane, overall as a country, home prices per square foot are actually cheaper today than they were 50 years ago, when adjusted for inflation.

Bottom line - it costs less to buy a home today than it ever has in modern history in the United States. People are just choosing to buy nicer and larger homes than they should be buying.

Not the fault of the costs of home ownership - the fault of people today making dumb ass financial decisions.





https://www.aei.org/carpe-diem/today...last-40-years/
Well, that and states just love to have citizens buy expensive houses for the property tax revenues...
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      10-13-2019, 04:36 PM   #96
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I bought a car I couldn't afford and financed it for 5 years. Being that I was so bad with my money, the bank sent me some money back and told the DMV that they never wanted to deal with me again. DMV ended up sending me some letter to contact my insurance that the bank is no longer an interest or interested in my car.
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      10-13-2019, 04:39 PM   #97
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Not the fault of the costs of home ownership - the fault of people today making dumb ass financial decisions.
Luckily, my wife and I bought a house we couldn't afford. Years later, we have no reason to leave while our income is up.

I'd hate to house shop right now. My financial idiocy would put me in a budget that I'd never want to be in.
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      10-13-2019, 07:53 PM   #98
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Originally Posted by Run Silent View Post
Nope.

With exception of certain markets where housing has gone insane, overall as a country, home prices per square foot are actually cheaper today than they were 50 years ago, when adjusted for inflation.

Bottom line - it costs less to buy a home today than it ever has in modern history in the United States. People are just choosing to buy nicer and larger homes than they should be buying.

Not the fault of the costs of home ownership - the fault of people today making dumb ass financial decisions.





https://www.aei.org/carpe-diem/today...last-40-years/
The problem is these "certain markets" seem to be more plentiful than a normal market (I don't know if the real # is actually higher than let's say a midwest area where a mcmansion cost what a basic hoise by me would cost, but you get my point) So it is not that cut & dry.

Same with rent cost. $1500-$2k for the new blah apts being built around here as we speak. No wonder no one can save any $
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      10-14-2019, 06:49 AM   #99
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You think cars and houses are bad... look at cell phones.

Now that they are not being rolled into your minutes plan anymore and the consumer is paying full price on interest free financing, phones have nearly doubled in pricing.
My 6plus was a $750 top of the line phone 5 years ago. I paid $300 for it new 5 years ago because the monthly plan was the same buying or not buying and it was time to retire the 3GS. Still works.

But you have people getting pissed because they have to simply pay their past due $300 bill before they can finance 2-3 $1100 phones that will only be worth what I paid new for mine next year when they want to buy next years model. As if somehow their inability to keep up with their bills and being denied the ability to buy a new phone is condemning them to a life de ok’d of meaning.

And they do it. Over and over and over again.
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      10-14-2019, 11:12 AM   #100
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Nope.

With exception of certain markets where housing has gone insane, overall as a country, home prices per square foot are actually cheaper today than they were 50 years ago, when adjusted for inflation.


Not the fault of the costs of home ownership - the fault of people today making dumb ass financial decisions.
Sure this may be true for the USA as a whole, but those "certain markets" you mention are the markets that are most relevant. New York, LA, Bay Area, Austin, Atlanta, Chicago, Seattle, Denver etc. are where job growth is for the average young person. Beyond job markets, most folks don't want to live in middle-of-nowhere.

You're also seeing the "death" of suburbia, where 20-30 years ago there was plentiful demand for areas 60+ minutes outside of the main metros we simply don't see the same demand today...people want to live near the cities (where supply is low) even though there are plentiful options in the burbs.

Your data is probably accurate, but doesn't actually capture the whole picture. Not everyone can just throw down roots in the middle of nowhere. Sure, many folks are piss poor with their financial planning but it's not fair to make a general statement that "cost of living is lower" and it's "the fault of people today making dumb ass financial decisions."
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      10-14-2019, 11:19 AM   #101
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Originally Posted by Flacht3 View Post
Sure this may be true for the USA as a whole, but those "certain markets" you mention are the markets that are most relevant. New York, LA, Bay Area, Austin, Atlanta, Chicago, Seattle, Denver etc. are where job growth is for the average young person. Beyond job markets, most folks don't want to live in middle-of-nowhere.

You're also seeing the "death" of suburbia, where 20-30 years ago there was plentiful demand for areas 60+ minutes outside of the main metros we simply don't see the same demand today...people want to live near the cities (where supply is low) even though there are plentiful options in the burbs.

Your data is probably accurate, but doesn't actually capture the whole picture. Not everyone can just throw down roots in the middle of nowhere. Sure, many folks are piss poor with their financial planning but it's not fair to make a general statement that "cost of living is lower" and it's "the fault of people today making dumb ass financial decisions."

List of major metro areas that are NOT "certain markets" and have cost per square foot of homes at or less than what it was 50 years ago:

Tampa
Orlando
Jacksonville
Charlotte
Raleigh
Providence
Albany
Cincinnati
Cleveland
Louisville
Nashville
Chattanooga
Mobile
Houston
Dallas
El Paso
St Louis
Albuquerque
Indianapolis
Green Bay
Oklahoma City
Boise
Spokane
Salt Lake City
Reno
Santa Fe
Tulsa
Milwaukee
Springfield
Pittsburgh
Birmingham
Huntsville
Ann Arbor
Grand Rapids


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      10-14-2019, 11:32 AM   #102
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Quote:
Originally Posted by Run Silent View Post
List of major metro areas that are NOT "certain markets" and have cost per square foot of homes at or less than what it was 50 years ago:

Tampa
Orlando
Jacksonville
Charlotte
Raleigh
Providence
Albany
Cincinnati
Cleveland
Louisville
Nashville
Chattanooga
Mobile
Houston
Dallas
El Paso
St Louis
Albuquerque
Indianapolis
Green Bay
Oklahoma City
Boise
Spokane
Salt Lake City
Reno
Santa Fe
Tulsa
Milwaukee
Springfield
Pittsburgh
Birmingham
Huntsville
Ann Arbor
Grand Rapids


Some of those are indeed surprising, but overall I wouldn't consider any of those to be a tier 1 job market for the average young professional. Again, nothing against them, I love quite a few places on that list, but they're not exactly attracting young professionals in droves.

The other thing to think about is affordability separate from pure cost of living. Most millennials are drowning in student loans and half their paycheck goes straight to that.

I entered the job market in the middle of the financial crisis, took a crappy job and was able to build a strong network, start investing, and put myself in a great position as the economy strengthened. However most of my peers did what seemed smart at the time...went back to school and took on degree after degree...only to graduate and realize their job prospects and earnings didn't improve the way they thought.

Again, not arguing with your data, but it's definitely not the whole picture and not relevant for the most in-demand metros.
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      10-14-2019, 11:39 AM   #103
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Originally Posted by Flacht3 View Post
Some of those are indeed surprising, but overall I wouldn't consider any of those to be a tier 1 job market for the average young professional. Again, nothing against them, I love quite a few places on that list, but they're not exactly attracting young professionals in droves.

The other thing to think about is affordability separate from pure cost of living. Most millennials are drowning in student loans and half their paycheck goes straight to that.

I entered the job market in the middle of the financial crisis, took a crappy job and was able to build a strong network, start investing, and put myself in a great position as the economy strengthened. However most of my peers did what seemed smart at the time...went back to school and took on degree after degree...only to graduate and realize their job prospects and earnings didn't improve the way they thought.

Again, not arguing with your data, but it's definitely not the whole picture and not relevant for the most in-demand metros.
1) We would have to just agree to disagree regarding the job markets. While there are obviously not as many people moving to CLT for a new professional job than to LA or NYC, it is hardly a rural and uneducated market. Heck, Charlotte is the second largest banking and finance hub in the country.

2) Ah, student loan debt. Don't get me started on that. Has college gone up a bit more than inflation over the last 50 years? Yep - about 6% per annum as compared to 3.2% per annum for inflation - but most of those giant student loan balances are the result of shitty financial responsibility and not because of anything else. I graduated with 0 debt and multiple grad degrees, but I know it was hard and not everyone could have done it. But graduating with any more than $30k - $60k of student loan debt unless you are a physician is just asinine and a whole other problem that doesn't relate to this thread.
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      10-14-2019, 11:51 AM   #104
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Quote:
Originally Posted by Run Silent View Post
most of those giant student loan balances are the result of shitty financial responsibility and not because of anything else. I graduated with 0 debt and multiple grad degrees, but I know it was hard and not everyone could have done it. But graduating with any more than $30k - $60k of student loan debt unless you are a physician is just asinine and a whole other problem that doesn't relate to this thread.
For the record, this is one thing I I don't disagree on

Also getting back on track to this thread, in general I agree that people (overall) make terrible financial decisions. The average car loan length of 69 months is telling of that. And when those same people complain about lack of home affordability etc. I don't feel any pity.

But there is also a subset of the population that is simply priced out, drowning in student loans, and living in areas of the country where they could save every penny and still be out-of-luck until they consider moving elsewhere.
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      10-14-2019, 12:10 PM   #105
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Yeah, but how much did she pay the bank in interest over those 5 years?
It was only 1% interest. So the money she was able to keep in savings earned a lot more than that. Our kids have their savings in investment accounts that have been crazy good this last 7-8 years.

Trust me, she is WAY ahead of the game.
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      10-14-2019, 01:00 PM   #106
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1) We would have to just agree to disagree regarding the job markets. While there are obviously not as many people moving to CLT for a new professional job than to LA or NYC, it is hardly a rural and uneducated market. Heck, Charlotte is the second largest banking and finance hub in the country.

2) Ah, student loan debt. Don't get me started on that. Has college gone up a bit more than inflation over the last 50 years? Yep - about 6% per annum as compared to 3.2% per annum for inflation - but most of those giant student loan balances are the result of shitty financial responsibility and not because of anything else. I graduated with 0 debt and multiple grad degrees, but I know it was hard and not everyone could have done it. But graduating with any more than $30k - $60k of student loan debt unless you are a physician is just asinine and a whole other problem that doesn't relate to this thread.
I'm glad you graduated with no student debt but your anecdotal example doesn't prove anything.

"Inflation Examples
For example, the Bureau of Census reports that the average price of a new home in May 1999 was $193,900. According to the inflation calculator, that price today should be $298,774. The same report places the average sale price for May 2019 at $377,200, more than 26 percent higher than the price when accounting for inflation alone.

The same method can be applied to see if household incomes have similarly increased. The median household income in 1999 was $42,000, according to the Census Bureau. According to the inflation calculator, that price today should be $64,716. The most recent year with full data available is 2018, which places household income at $61,227, meaning that it has failed to keep up with inflation and is 5% below where it should be."

from Investopedia but note that it is citing to census bureau data. And this data doesn't account for the fact that there are many more two earner homes today than 20 years ago.
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      10-14-2019, 01:31 PM   #107
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I'm glad you graduated with no student debt but your anecdotal example doesn't prove anything.

"Inflation Examples
For example, the Bureau of Census reports that the average price of a new home in May 1999 was $193,900. According to the inflation calculator, that price today should be $298,774. The same report places the average sale price for May 2019 at $377,200, more than 26 percent higher than the price when accounting for inflation alone.
Sigh. You are looking at sales prices alone. Apple + 20 does not equal elephant. You have to calculate it based on square foot. If 10 people all bought a Honda Civic 20 years ago and then replaced it with a Lexus, you can't infer from that alone that car prices are more expensive.

Average home size in 1999: 2,213
Average home size in 2018: 2,765

Increase in home size between the two periods: 25.4%

There is your 26% percent(ish).

If you look at over a longer period of time, you will see an even more dramatic variance.

Home prices are not more now than in the past - they just appear so since people want 'more' house.
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      10-14-2019, 01:54 PM   #108
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Quote:
Originally Posted by SteveinArizona View Post
I'm glad you graduated with no student debt but your anecdotal example doesn't prove anything.

"Inflation Examples
For example, the Bureau of Census reports that the average price of a new home in May 1999 was $193,900. According to the inflation calculator, that price today should be $298,774. The same report places the average sale price for May 2019 at $377,200, more than 26 percent higher than the price when accounting for inflation alone.

The same method can be applied to see if household incomes have similarly increased. The median household income in 1999 was $42,000, according to the Census Bureau. According to the inflation calculator, that price today should be $64,716. The most recent year with full data available is 2018, which places household income at $61,227, meaning that it has failed to keep up with inflation and is 5% below where it should be."

from Investopedia but note that it is citing to census bureau data. And this data doesn't account for the fact that there are many more two earner homes today than 20 years ago.
No stop. These numbers hurt the boomer narrative that the young generations are lazy and not working hard enough!
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      10-14-2019, 08:14 PM   #109
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Btw can I get a loan for exactly 69 months? As long as I get my normal APR I would totally do it, just because I'm immature
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      10-14-2019, 08:53 PM   #110
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Drives: Smog machines
Join Date: Oct 2008
Location: Dallas, TX

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There is no way that like for like Dallas sf costs are lower now than 50 years ago. My Grandmothers house went from $50k to $2m, and that's not unusual. The house I bought 23 years ago is worth just under four times what I bought it for. I call shenanigans on your list.
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