Millennials struggling to find their financial footing

[cuervo72]

I'm sure that does help considerably with the disposable part, but they're still referring to income. I'm imagining in a lot of cases investment income for retirees is outpacing working income for millenials.

[Mizzou B-ball fan]

Originally Posted by spleen1015

I was in the USAF for 4 years, learned computers and have made a decent living in the IT industry for just over 20 years.

It bothers me that there are more foreign people working in the IT department where I work then there are American citizens. We missed the boat some where.

FWIW......I made a lot of money over 12 years in IT before I moved to running the family business. I took advantage of that hole in the job market. I had a job that only paid $25k my first year or so out of school, but I worked my ass off. The higher ups noticed my work ethic and offered me the opportunity to take a six week mainframe programming course because all their current legacy programmers were dying or retiring (which is the hole in the job market that you mention where a lot of foreign contractors were brought in).

Two years later, I was making $70k. Five years later, I was making six figures and did so for the next 7 years. It helps to find a spot in the market, but I would have never had that opportunity if I wouldn't have shown I was a hard worker even when making $25k. Having just started hiring for our business expansion and now being on the other side of that hiring equation, you would be shocked at the number of prospective employees who don't realize the value of good work experience at any level.

[Arles]

Originally Posted by cuervo72

THAT's the issue. "Pensioners have seen significantly higher disposable income growth than young people" is what the chart says. They are retired and they are still seeing better growth. This isn't a case of whittling away at retirement, they're still earning.

I re-read the whole article for a 3rd time and I have to admit, it's a pretty odd thesis/conclusion. Here's my "retort":

1. People between the ages of 20 and 30 are establishing their career (ie, lower wages), paying off a ton of debt from their youth (when they made no money and/or had student loans), having kids (not cheap) and buying their first house (also not cheap). Nearly everyone I know cites their early to mid 20s as their low point for net revenue. My parents were the same. My dad got laid off when I was young and my mom worked as a social worker (making peanuts) in their 20s. When I was 22-28, I made about half what I do now and had more debt (plus a kid on the way).

2. The current baby boom generation (60+) grew up in a time that didn't have a lot of options for consumer debt. There was really no concept of "credit card" until the late 80s - and those were mostly for department stores or an American Express business card. People had to pull out money for the weekend every Friday night and didn't have a debit card. If you blew all your cash by Saturday, you either had to go to some store and try to cash a check (also not easy) or just make do until Monday. Debt was viewed as a bad thing and people (mostly) lived within their means.

So, it makes sense that retirees have an increasing income level. Many had some sort of pension or retirement that kicks in, they don't have much debt and most have their houses/cars paid off. My parents didn't make a ton of money through their 30s and 40s, but they lived within their means and now are in the process of paying off their house. They have significantly more money than they ever had because they don't have to pay for kids, have 30-35 years of making a professional salary and saving, don't have much debt and are beginning to get retirement/pension money kicking in. Isn't this a good thing?

I do think that as time passes, this will start to change. People who are in their 20s and 30s now have grown up in a time where having a ton of consumer debt, student loans and even multiple housing debt is looked on as acceptable. By the time these people reach 60, they won't have lived within their means and probably won't be as stable as current retirees. I guess the author of this article will be happy then - but I don't think it's a good thing.

[lungs]

Interesting discussion....

Even having a multi-million dollar farming operation handed to you like I have hasn't exactly been peaches and cream. After my house (owned by my dad) burned down I decided it was time to buy the new one that my dad had built (along with 4 acres of land). Because I don't pay myself a very high salary with my business, getting a loan was like pulling teeth and I couldn't even get financing for the full cost of the home. And my dad gave me a pretty damn good deal on all this but I have still have to have a side deal with him to make up for the shortfall in what the bank wouldn't loan me.

Honestly right now my dad would be completely justified in pulling the plug on the farm. He's built himself a nice financial position and I'm sitting here and leveraging that position just to keep going. But when I look back at what he went through farming in the 80's with high interest rates, I can't say that he had it much better. In fact I'd say my quality of life is better in that I'm large enough that I'm able to take time away from the farm where when he was starting out he was lucky to get one Sunday afternoon a month away.

Not complaining here by any means, but the commodity markets sure make my life much more complicated, trying to juggle personal finances along with that of the farm.

[cuervo72]

Originally Posted by Arles

1. People between the ages of 20 and 30 are establishing their career (ie, lower wages), paying off a ton of debt from their youth (when they made no money and/or had student loans), having kids (not cheap) and buying their first house (also not cheap).

Well...except that many of them are not. They're not really establishing anything career-wise, they're not buying homes, and they're not having kids. Yes, they are paying off a ton of debt, but that is something prior generations typically weren't saddled with.

[Honolulu_Blue]

Originally Posted by Arles

So, it makes sense that retirees have an increasing income level. Many had some sort of pension or retirement that kicks in, they don't have much debt and most have their houses/cars paid off. My parents didn't make a ton of money through their 30s and 40s, but they lived within their means and now are in the process of paying off their house. They have significantly more money than they ever had because they don't have to pay for kids, have 30-35 years of making a professional salary and saving, don't have much debt and are beginning to get retirement/pension money kicking in. Isn't this a good thing?

I do think that as time passes, this will start to change. People who are in their 20s and 30s now have grown up in a time where having a ton of consumer debt, student loans and even multiple housing debt is looked on as acceptable. By the time these people reach 60, they won't have lived within their means and probably won't be as stable as current retirees. I guess the author of this article will be happy then - but I don't think it's a good thing.

Wait. Isn't this one of the main points of the article? That, as a result of everything you set forth begins to unfold, as Generation Y gets older, they won't have adequate savings, they will still have debt, and will become a significant burden on society.

I don't think the author will be happy about this. I think this is exactly what he's writing about, no?

Maybe I misread it.

[JPhillips]

The reality is that no matter how good your education nor how hard you work, there aren't 100k jobs for everyone. Median income in the US is 52K. All the engineering degrees in the world aren't going to change that.

[nol]

Originally Posted by Logan

Interesting that you rant in this second paragraph about the strawman yet you threw out the bolded. What does that even mean? Where are these people living and with what degrees are they coming out of college with that makes you say there is NOTHING out there? Or does "nothing" mean something maybe a little short of the $100K/year gender studies jobs?

So, when someone elects to go to graduate school, work in a startup, etc., he or she is generally forgoing the opportunity to make more money in the immediate future in hopes of making an even larger amount of money throughout the course of his or her lifetime. Different people have different preferences. Some like going to school more than others. Some are very passionate about a particular startup and are willing to take a larger risk to see the idea through. Therefore, everybody has a different price (seeing as you are trolling/being dense and taking everything literally, 'price' can mean not only salary but can also encompass things such as flexibility, location, or any other factors than an individual considers when choosing a workplace) at which they would rather enter the workforce. When fewer jobs are available, that shifts the calculus and more people decide to invest in themselves. Also, a rant is generally longer than one sentence, so that was a pretty stupid little dig to throw in there.

My larger point was that people like AENeumann are viewing some of these statistics through the lens of the their own college and post-graduate experience of years ago when things have clearly changed. If there are twice as many students enrolled in college today, the bulk of that increase is going to be from minority students who are enrolled part-time at lower-tier or for-profit universities. It's interesting to note the contrast between the general acceptance in this thread that a college degree isn't worth as much and college isn't for everyone versus how in other threads education is seen as this magic bullet that's supposed to alleviate a wide variety of societal ills.

[Arles]

If they have a job and a college degree (which most do), they are establishing their career and work experience. In terms of home ownership, I do think the scare of 2007-2009 has created more renters. But, again, I don't think that is a bad thing. It's rare that people generate a ton of equity on their starting house. Most people outgrow their first house in 5-6 years and then are forced to try and sell it. One problem is a lot of women are having kids out of wedlock (which also puts a strain on the budget) and living separate from the father. Instead of having one house with two incomes and a kid. They have two rents, two sets of bills and so forth.

There is a path to financial viability for millennials, but it involves discipline, being smart with your major/education, not having kids out of wedlock and not racking up a ton of debt. Our parents did this and many on this forum managed this - it just seems more difficult in today's society due to what is accepted by society (or even encouraged - esp high student and consumer debt).

[Drake]

Originally Posted by cuervo72

Our unix guys are pretty much all Indian.

We did a round of hiring a couple of years ago where we ended up hiring a Turkish guy over all the American applicants...because he was the most qualified.

That he's Turkish isn't the point. That he was able to step right in and start contributing right away is.

But here was the problem: we found the right guy at the right time with the right skills for what we needed. Ten years ago, we would have been less concerned about what skills you have right at this second than "capacity to learn/grow" sorts of approaches. Which means that we interviewed a ton of interesting kids straight out of school, but we don't have the luxury of running up the standard junior coder/standard programmer/senior analyst-slash-programmer ladder (that ultimately makes them an extremely valuable member of the organizational infrastructure).

Note: I actually hired into my department as a secretary -- because I only had a BA in English. I picked up programming because i was bored and basically just started stealing work from the old guys until I made myself the resident expert in their jobs. Old guys have to retire sometime, right?

My point being: things have changed so much in my higher-education-IT niche that my department couldn't afford to hire someone like me these days. Too many variables to control. (Will s/he stay around long enough to be valuable? Are they self-motivated enough? Will they stay self-motivated? Blah. Blah.) It's just more efficient to hire the guy who knows the thing and will probably be gone in two years. Which is sort of a shame, really.

[Arles]

Originally Posted by Honolulu_Blue

Wait. Isn't this one of the main points of the article? That, as a result of everything you set forth begins to unfold, as Generation Y gets older, they won't have adequate savings, they will still have debt, and will become a significant burden on society.

I don't think the author will be happy about this. I think this is exactly what he's writing about, no?

Maybe I misread it.

I didn't get that at all. Then again, it was a pretty scattered article. One of the key points was "In the US, under-30s are now poorer than retired people." IMO, this has always been the case and SHOULD be the case. The under 30s crowd should see their wages raise and debt levels lower over the next 20 years. Retirees are much more stagnant in those areas. I just think this is a much different economy than what the baby boomers had. Back then you had to grind, grind and grind some more to get a high wage. It was based on "time served" and not really on ability. Now, you can make 6-figures in your mid 20s if you show an aptitude in a needed area. You can now start your own business a lot easier, loans are easier to obtain, there is less stigma in quitting your job and going into business for yourself and less employee loyalty. But with all of this new opportunity comes some new risk. Some young people forgo better paying situations to try their hand at their own business or a startup and it fails. There is less tolerance for non-producing employees and grinding isn't something that suits a lot of young people in our instant gratification society.

To me, the issue is more on understanding debt and how to handle the rising cost of universities. Not, whether some person in his late 20s "is poorer" than retirees. If people in their 20s lived within their means a little better, they would have many of the same opportunities that we had. But, consumer debt and student loan debt is pushed on them at every stretch and there is a way people can "have their cake and eat it to0" when they are younger and the only cost is more debt. That's a hard temptation to decline when you see older people/siblings traveling the world and you are stuck living paycheck to paycheck.

[Drake]

Oh, I meant to add: And now I'm the senior analyst/programmer for our unit...and according to HR, I couldn't even get hired to do my job, because they flat require a BS in Computer Science just to get in the door.

[molson]

Originally Posted by Arles

Retirees are much more stagnant in those areas.

They might be more stagnant than their flat income, but they generally should have more disposable wealth and income over time, which is what the article is talking about as the big problem. Once you're a homeowner, that's a pretty big source of wealth over decades, when you move, sell for more than you owe on it, scale down when you're older, etc. And the older you get, hopefully, the less you need to support your kids. And a lot of older people also aren't participating as much in the economy, they're not the greatest consumers.

[Young Drachma]

Originally Posted by Drake

My point being: things have changed so much in my higher-education-IT niche that my department couldn't afford to hire someone like me these days. Too many variables to control. (Will s/he stay around long enough to be valuable? Are they self-motivated enough? Will they stay self-motivated? Blah. Blah.) It's just more efficient to hire the guy who knows the thing and will probably be gone in two years. Which is sort of a shame, really.

I know this story well and yeah, starting now how I did in 2006..there's just no way I'd have been able to burst out of the gate like I did.

[nol]

Originally Posted by Arles

I re-read the whole article for a 3rd time and I have to admit, it's a pretty odd thesis/conclusion. Here's my "retort":

I don't think this is any more complicated than the fact that a home is the largest investment most people make, and Baby Boomers came of age when homes were as cheap and readily available as they've ever been.

[cuervo72]

Yes, yes Arles. Kids being born out of wedlock is the real reason for the Millenials' ills.

[Arles]

Originally Posted by molson

They might be more stagnant than their flat income, but they generally should have more disposable wealth and income over time, which is what the article is talking about as the big problem. Once you're a homeowner, that's a pretty big source of wealth over decades, when you move, sell for more than you owe on it, scale down when you're older, etc. And the older you get, hopefully, the less you need to support your kids. And a lot of older people also aren't participating as much in the economy, they're not the greatest consumers.

That's true, older people have much more equity/wealth because of what they have paid into over time. I don't see why that is a big problem. Older people aren't just Scrooge and hoarding their money in a mattress - they are just different consumers. Instead of buying an Xbox or going to a club on Saturday, they are taking trips to hotels, buying medical equipment/prescriptions, seeing matinee movies and hitting more happy hours. I would bet that older people spend similar money to people in their 20s, it's just not on Budweiser, Pepsi, restaurants, video games or night clubs.

I'm still trying to figure out the "solution" the writer of this article wants. Do you want older people to have less wealth? People in their 20s to have more wealth? The reality is people in their 20s have less wealth compared to people in their 60s because of that 40-year difference in earning history.

[Arles]

Originally Posted by cuervo72

Yes, yes Arles. Kids being born out of wedlock is the real reason for the Millenials' ills.

I don't think it helps. And i wouldn't even say out of pure wedlock as the main reason. It's more the single parent aspect. Nearly 1/3 of kids are living with a single parent (divorce/wedlock/...) and this rate is even higher for parents between 18 and 30. That rate has doubled since the 80s and early 90s. So, I think that does play a part in the money available. But, I would say that the cost of universities and ease of racking up consumer debt are much bigger factors.

[Honolulu_Blue]

Originally Posted by Arles

I didn't get that at all. Then again, it was a pretty scattered article. One of the key points was "In the US, under-30s are now poorer than retired people." IMO, this has always been the case and SHOULD be the case. The under 30s crowd should see their wages raise and debt levels lower over the next 20 years. Retirees are much more stagnant in those areas. I just think this is a much different economy than what the baby boomers had. Back then you had to grind, grind and grind some more to get a high wage. It was based on "time served" and not really on ability. Now, you can make 6-figures in your mid 20s if you show an aptitude in a needed area. You can now start your own business a lot easier, loans are easier to obtain, there is less stigma in quitting your job and going into business for yourself and less employee loyalty. But with all of this new opportunity comes some new risk. Some young people forgo better paying situations to try their hand at their own business or a startup and it fails. There is less tolerance for non-producing employees and grinding isn't something that suits a lot of young people in our instant gratification society.

To me, the issue is more on understanding debt and how to handle the rising cost of universities. Not, whether some person in his late 20s "is poorer" than retirees. If people in their 20s lived within their means a little better, they would have many of the same opportunities that we had. But, consumer debt and student loan debt is pushed on them at every stretch and there is a way people can "have their cake and eat it to0" when they are younger and the only cost is more debt. That's a hard temptation to decline when you see older people/siblings traveling the world and you are stuck living paycheck to paycheck.

No. That was just one data point among many. It's not one of the "key points", but rather just an indicator of where people under 30 stand with respect to other age groups. There are many other indicators cited in the article that are much more sobering.

You should read the article again. I think you are much more aligned with what they article is saying than you think.

The crux of the piece is that many in Generation Y are struggling economically as compared to other age groups, not because they are lazy, entitled, or whatever easy label people like to slap on them, but because there are economic realities that are beyond their control that are making it much more difficult than it was for prior generations to achieve the same kind of economic success they achieved at similar ages/life stages.

[AENeuman]

Originally Posted by nol

My larger point was that people like AENeumann are viewing some of these statistics through the lens of the their own college and post-graduate experience of years ago when things have clearly changed. If there are twice as many students enrolled in college today, the bulk of that increase is going to be from minority students who are enrolled part-time at lower-tier or for-profit universities.

Sorry, but you are just wrong. Here's the stats: http://nces.ed.gov/programs/coe/indicator_cha.asp Females are the biggest reason college enrollment is going up, full time more than part time, public institutions more than for profit. Perhaps my original comment was flippant and hit an nerve with you, not my intention.

By the way, my personal journey aside, I teach on a community college campus and I am part of the retention and pathways committee. My only point, that has been stated here by others, is that comparing the 20 somethings today to the 1940's-60's is way more complex than just the stat "worse off than retired people."

[nol]

Originally Posted by Arles

That's true, older people have much more equity/wealth because of what they have paid into over time.

No because for the umpteenth time, people in their 60s (probably moreso their parents, which in turn allowed them to invest more into their Boomer children) had the purchasing power to buy a home when they were in their 20s even if they only had a high school education. This doesn't take any special amount of financial discipline; a home is a pretty good thing to have, so if you can afford (and even if you can't, as the subprime crisis showed us) one you generally get one.

Originally Posted by Arles

I'm still trying to figure out the "solution" the writer of this article wants. Do you want older people to have less wealth? People in their 20s to have more wealth?

Originally Posted by the article

A two-week Guardian project, supported by the Joseph Rowntree Reform Trust, aims to explore this predicament in depth and ask what can be done.

So you probably don't need to get too worked up about what's being offered up as a solution this very second; if you're really that concerned, check back on it at some point over the next week or so. The point of this introduction is that in previous generations, societies invested much more in young people one way or another (in America, for example, a Baby Boomer has paid much, much less in taxes than his/her forebears did) and absent that sort of investment (the 'economic betrayal' the article refers to), solutions are going to be difficult.

[molson]

Originally Posted by Honolulu_Blue

The crux of the piece is that many in Generation Y are struggling economically as compared to other age groups, not because they are lazy, entitled, or whatever easy label people like to slap on them, but because there are economic realities that are beyond their control that are making it much more difficult than it was for prior generations to achieve the same kind of economic success they achieved at similar ages/life stages.

It's hard with data and charts to get a sense of what that economic struggle looks like and means. So we rely a lot on our own experiences and who we see younger people around us living today, compared to how we lived and how we knew our parents lived. I really don't know what the best measure of economic success in that context is - buying a house early, traveling, saving money, having fulfilling work, etc.

[nol]

Originally Posted by AENeuman

Sorry, but you are just wrong. Here's the stats: http://nces.ed.gov/programs/coe/indicator_cha.asp Females are the biggest reason college enrollment is going up, full time more than part time, public institutions more than for profit. Perhaps my original comment was flippant and hit an nerve with you, not my intention.

Females can come from different ethnic backgrounds as well. 538 - Race Gap Narrows in College Enrollment, but not in Graduation

I said lower-tier as well as for-profit for a reason: there are certainly not twice as many spots available in Ann Arbor or Berkeley as there were 20 years ago. It's a large number of smaller public universities trying to scale up and get in on the higher ed bubble.

I wasn't singling you out. It's just that I knew that, for many posters, bringing up the case of people who graduated college and aren't doing well financially is automatically going to conjure up 'sheltered white Bernie voter who didn't have the common sense to pick a STEM major' when that represents the tip of the iceberg in a country as diverse as America.

[digamma]

Originally Posted by Mizzou B-ball fan

FWIW.......

I like the size of my own penis too. Or in the words of Donald, "it's not an issue."

[Arles]

Originally Posted by Honolulu_Blue

The crux of the piece is that many in Generation Y are struggling economically as compared to other age groups, not because they are lazy, entitled, or whatever easy label people like to slap on them, but because there are economic realities that are beyond their control that are making it much more difficult than it was for prior generations to achieve the same kind of economic success they achieved at similar ages/life stages.

I completely disagree with that statement. I think it is different. It's harder to find well-paying, low mobility jobs now than it was 20 years ago. However, it's a lot easier to reach a 6-figure (or comparable salary in the 80s/90s) now than it was back then. The economy has become much more interested in current ability than pedigree/time served. There are a large group of early to late 30-year olds who made more money than their parents ever could have over the past 5-10 years by going into tech. There is a large demand for trade school graduates and even in IT/software for people with greater skills and a lesser degree. Business degrees can also pay well if you are good at sales or have knowledge in the area. Just look here for a ton of well-paying starting salaries if you major in certain things. Over 40 majors have a starting salary between 40 and 100K:

http://www.payscale.com/college-sala...t-pay-you-back


In terms of buying a house, interest rates are a fraction of those in the 80s and early 90s. Sure, people only had to pay $80-120K for a house, but their interest rate was 10-13%. A 100K house at 12% interest on a 30-year loan is $1050 a month. A $250K house on a 30-year loan at 4% is $1190 a month. My parents financed 85K on our first house in the 80s at 13% ($1020 base a month). My sister just bought a $220K house at 4.25% and she's paying a base amount of $1200. So, it was much more expensive for baby boomers to buy a house and loans were a lot harder to come by. People used to have to pay fees to have a bank account and there were no "0% initial credit card rates" or "balance transfers". You had a balance on your card, you were paying 20% (if they let you carry one). It was very hard to invest money (especially if you want it liquid) and mutual funds weren't nearly as good/liquid as they are now. 401Ks were minimal and there wasn't company matching or a diverse set of funds to invest in. Quite often you got company stock and if the company struggled, you may get fired as well as lose the value in your stock portfolio.

The problem I see is that people think the formula their parents had (get a 4-year degree and start with a big company and grow) is still viable. Getting a 4-year liberal arts degree is worth a lot less than a welding degree at a vocational school. Getting a psychology or history degree at a state school doesn't get you the opening job another person gets after becoming a journeyman electrician. Majors like Supply Chain Management, Engineering, Nursing and Finance pay well while ones like Sociology, Communication, History and Journalism don't. This bothers a lot of people that some traditional majors don't have jobs, but it's the new reality. Also part of the new reality is that some 20-year old kid can write an app, sell it on iTunes and make $150K. A 25-year old with experience in software development can be a consultant and make 80-90K 2-3 years out of college. A mortgage broker who is in his early 30s and works for wells fargo or some other bank can make $100K if he sells well (and doesn't have to wait behind 3-4 lesser performing 40-year olds due to seniority). A 29-year old engineer can start a gaming company with little out of pocket cost and build it into a legit business (yours truly).

There is so much more opportunity for being an entrepreneur, early 30s manager/executive, 60+K a year tradesman, vocational school graduate in an area of need and even a statistical nerd than there ever was in the 80s/90s. These just aren't the traditional routes of getting a 4-year business degree and selling mutual funds or getting a 4-year liberal arts degree and being hired on to a major company. People are now paid more on their output and acumen than their pedigree or time served. There's no "do X and Y, and you are guaranteed to make Z" equations. But, that doesn't mean it's harder on young people, it's just different and they need to take different steps than our parents did.

[cuervo72]

So simple, even a caveman can do it.

[jeff061]

However, it's a lot easier to reach a 6-figure (or comparable salary in the 80s/90s) now than it was back then.

http://www.bankrate.com/finance/pers...anymore-1.aspx

While the cost of everything has gone up, Americans still equate the six-figure milestone to wealth and prosperity. But according to the Bureau of Labor Statistics inflation calculator, for a person to have the same purchasing power in 2014 as a $100,000 income earner in 1980 did, he or she would need to earn nearly $287,000.

Now I think I am doing well, I'm happy where my career has taken me. Especially considering my age and education(HS drop outs represent!). But I have not hit 280k. It is MUCH harder to succeed at a high level now than it was 30 years ago.

All that said. I look at myself, GED, no college, yet still successful. My friends not doing as well and still paying down a massive loan doing jobs they hate. I loved tech when I was a kid. Begged myself into a minimum wage IT job when I was 17 and ran with it.

I certainly feel I was lucky, being passionate about something that could turn into a career. My father was in tech as well and no doubt was a heavy influence on me. Yet then there is the no college angle and how that effected me. Simply put, I was always focused like a laser on what I wanted to do and how it could help people signing my paycheck. As my understanding of what the business valued matured, so did my role within various organizations.

I view college as a grind that dumps you with an idealized view of self worth, questionably useful skills and a sense of entitlement. Not to mention the debt. A flawed culture and marketing machine pushing kids to feel like if you are not a college grad you are part of a lower caste.

I'm sitting here in a director level role aligned with the business side of the house despite not going to college. A job I got at 29. Skipping college was one of the single most beneficial steps in my career.

It's not my intent to tout myself, I'm sure people in this thread are significantly more successful than myself. I think my path I have taken without college is partial proof of the issues these college kids are having. When I hire someone, college education is almost 100% an afterthought. I'm all about attitude(culture fit) and practical experience.

[Arles]

I wouldn't have had half the opportunities I have now if I worked in the 1980s. I'd have been working as a grunt in IBM hoping to make a middle class salary once I entered my 40s. I look back on what my dad had to do just to make a middle class living and I feel fairly fortunate to be living in this current economy. You were in the 90th percentile if you made 100K back in 1980. The 90th percentile right now is around $200K. So, 287K is not that far off. A "rich" person in the 80s wasn't making 100K, they were making 70K (80th percentile). That corresponds to around $150K in today's money. Right now, the 80th percentile is around $110K. It's less, but it's not that drastic.

Over time, this always happens. A guy making $40K in 1965 (median 50%) would have needed to make $138K in 1985. That's much more of a stark difference than 1985 to today.

[BishopMVP]

Originally Posted by nol

It's interesting to note the contrast between the general acceptance in this thread that a college degree isn't worth as much and college isn't for everyone versus how in other threads education is seen as this magic bullet that's supposed to alleviate a wide variety of societal ills.

Better education is the goal and the solution, but I don't think college is the most efficient path to that. If we want that bottom half of kids to have the equivalent of a "college" education I think that there are ways to improve public HS education (the most obvious being to move the start time back so 87% of students aren't sleep-deprived, as I recall being every day in my HS days), and that's a more efficient use of time than encouraging people to spend and pay money for 4 more years if they're not learning any more applicable skills than they would living in the real world and having a job. But I also don't think we live in Lake Woebegon, and having some different tiers of educational attainment will always occur, and really isn't even a bad thing as a whole (as long as it's equal opportunity from the government side).

[Drake]

It's the same new reality that tells me every day, "You can write a series of scripts that replace the work of ten people that effectively makes them obsolete."

Then they get obsoleted. And I get paid the same money.

Only nobody accounts for the 90% of the rest of the shit that they did that they don't have people to do now.

So I write another app. And another. And another. And suddenly I'm supporting 40 websites and 50 apps that (hope to god) keep running in a production environment every day (until they don't). And everybody wants more efficiency still (i.e., more apps) and ignores the fact that eventually maintenance takes up all of your work week because you're supporting so much shit -- nobody ever accounts for maintenance -- and then people start complaining because it takes you so long to build new apps now.

That's the problem with IT being magic to most people. They think of it like magic instead of work, and I've yet to find a non-IT manager/administrator who understands that every new project comes with an ongoing maintenance investment until it gets retired. They just expect it to work like the magic they imagine it is.

(That's a bit of a rant. I've got people at work giving me shit right now because we're migrating all of our servers to Windows 2012, and they're pissy because I'm wasting time on the sorts of "ancillaries" that keep us PCI-DSS compliant instead of building shit that will let them obsolete more people. These are the same people who jump with joy when it only takes 3 years for central IT to build them an enterprise solution for a problem I could have solved in a month because I don't have to/have the luxury of not having to scale up to enterprise level. Given that these are the same people who write me a three sentence e-mail and assume that counts as specs, it's probably not really surprising. Welcome to IT--where you're expected to figure out what the business process is, how it's implemented, where it can be streamlined, write the code, test the code, debug the code, deploy the code, tune the databases, maintain the server, keep everything patched up, and have it all delivered within 60 days of that first e-mail or somebody is coming to chew your ass because your wand isn't glittery enough.)

[Dutch]

Sounds like an organization/company that needs some professional ITSM help.

[Drake]

It's higher education. ITSM is just the tip of the iceberg for shit higher education needs.

On the plus side, I get to ogle college girls every time I step outside. Which is cool, except I'm old enough to be their dad. It was more of a perk a decade or so ago.

(I like to tell people that we were Agile before Agile was cool. We just called it dysfunction and incompetence.)

[Dutch]

College Girls are sadly too young these days for me too....when my kids are old enough to date them....that pretty much killed it for me.

[Solecismic]

Originally Posted by Arles

I wouldn't have had half the opportunities I have now if I worked in the 1980s. I'd have been working as a grunt in IBM hoping to make a middle class salary once I entered my 40s. I look back on what my dad had to do just to make a middle class living and I feel fairly fortunate to be living in this current economy. You were in the 90th percentile if you made 100K back in 1980. The 90th percentile right now is around $200K. So, 287K is not that far off. A "rich" person in the 80s wasn't making 100K, they were making 70K (80th percentile). That corresponds to around $150K in today's money. Right now, the 80th percentile is around $110K. It's less, but it's not that drastic.

Over time, this always happens. A guy making $40K in 1965 (median 50%) would have needed to make $138K in 1985. That's much more of a stark difference than 1985 to today.

Timing is everything. After graduation, I took the grunt job at IBM everyone wanted. I don't regret it in that I learned so much about project management in the three years I was there. But there was a job fair in the EECS building a few months before graduation. Like everyone, I went to the IBM booth, signed up for their on-campus test, and waited as the offers came in.

I walked right by other booths. Like Microsoft, where everyone who stopped, listened, chose Redmond and tied themselves to that clunky pre-3.1 crap they called Windows for a few thousand less than IBM, became multi-millionaires.

Or the NSA, which sounded incredibly exciting, but they took nine months to give you security clearance and told you they'd be interviewing your neighbors. That probably wouldn't have worked out - I contacted them when I was leaving IBM and their response was unless I knew Arabic or Farsi, they weren't hiring.

So many roads not traveled. I don't envy the situation on the ground today, but it's a shame that life is so short.

[cuervo72]

Originally Posted by Arles

The 90th percentile right now is around $200K. So, 287K is not that far off.

$200k *household* income is 5%, according to this.

How close are you to the top 1%? - CNNMoney

Yeah, you can publish an app or create your own software business a little more easily these days. But how many people really succeed doing that? If you're lucky you might catch lightning in a bottle. Of course you might grow up to play in the NBA, too.

But even if you have a killer app which sells $150k, don't you have to follow that up every year for 40 years?

[Dutch]

Fair analogy.

[dubb93]

Originally Posted by Groundhog

What does the health insurance actually get you - ie. if you had to go for surgery, would there be much/any gap payment?

It is alright insurance. Deductible is higher than I would like it to be, but they did pay 28k for the birth of my son so I shouldn't really complain. The real issue is that the bill for childbirth was >30k. That bill was pretty shocking to see. None of this helps me pay less for health insurance while still having a plan I can stomach right now, though. The only cheaper options my workplace offers are those high deductible plans. They also change almost triple for family insurance. They said that almost 70% of the money they spend on healthcare last year were for spouses. It's a fairly large company, Fortune 500 company (barely, but they made it again).

All that said, like I said, they pay me well and I enjoy the job. Sometimes wish I didn't have to supervise some of the people I supervise, but I really can't complain other than the health insurance costs.

[HeavyReign]

Interesting discussion. I've debated for years whether my best path is to go back to school and chase the "dream job". The amount of debt that would be required is pretty terrifying to me though. For a while I thought about going to law school but wondered what if I don't like it.

I wish I had been able to focus all out on making new games each year as I could probably have a much bigger following and maybe it would work. Releasing stuff every now and then just doesn't pull that much in. Part of my issue was trying to stay in my hometown while trying to work a Tech job. It is hilarious around here because you'll see a job asking for a computer science degree, x years of experience, and they will pay you $12 per hour.

Instead I have currently settled for a job at an insurance company that leaves me bored out of my mind and not challenged in any way. I watch them promote people that have no clue how to correctly do the job. When I get home I'm looking for a mental break from life. That doesn't lead to the focus needed for programming, etc. Negative outlook leads to confidence lacking for things like dating so I end up feeling very alone.

Ultimately I just don't know what to do. VB6 sure isn't going to get me a job at this point so it feels like I would need to go back to school even for a tech type job. I've considered the nursing thing as well actually. The dream is out there. Get a job that doesn't suck and I'd still like to have a family but the clock is ticking.

I've actually thought about putting up an advice post in the past but never was able to follow through on it.

[Groundhog]

Originally Posted by HeavyReign

Ultimately I just don't know what to do. VB6 sure isn't going to get me a job at this point so it feels like I would need to go back to school even for a tech type job. I've considered the nursing thing as well actually. The dream is out there. Get a job that doesn't suck and I'd still like to have a family but the clock is ticking.

Nursing pays well here too, but I had a friend that focused on it for 6 years - both study and working - and the reality is that it's either something you are mentally capable of doing, or it's not. It's a tough job, that's for sure, and I have a lot of respect for nurses. She wasn't up to it, and threw all that away to join the police, then threw that away too to do something semi-nursing-related now, but not nearly as well paying.

As far as VB6 goes, have you considered something like Python? Pretty easy to pick up, and used in a lot of different fields. I went from not knowing any programming language a year and a half ago to writing desktop programs we use most days in the office.

[Dumitru Ivanov]

Originally Posted by cuervo72

So simple, even a caveman can do it.

Ha, ha... the cavemen didn't have a simple life, though...
_________________________________________________
Dumitru Ivanov
Broker consultant

[Logan]

Interesting bump.

[CrescentMoonie]

Millennials Not Buying Homes

Millennials have been the largest demographic group since 2015, but they have not been pulling their weight in buying homes.

I'll give millennials credit on this one as homes are a terrible investment. The ROI on home ownership was good during the bubble, and was okay before that once Fannie Mae started pushing mortgages to prop up the economy after WWII, but every analysis I've seen going back 100 years or more puts the average ROI at less than 1% per year once all the real costs (closing, repair, improvements) are added in. Add in the fact that the average homeowner sells at 4.5 years and owning a home is a poor choice if you think there's even a decent chance you're not going to be in a place long term.

[jeff061]

Yes, but the alternative is renting, no? I'll take 1% and something to show for my mortgage payments over a significant negative and nothing.

[BishopMVP]

Originally Posted by CrescentMoonie

Millennials Not Buying Homes



I'll give millennials credit on this one as homes are a terrible investment. The ROI on home ownership was good during the bubble, and was okay before that once Fannie Mae started pushing mortgages to prop up the economy after WWII, but every analysis I've seen going back 100 years or more puts the average ROI at less than 1% per year once all the real costs (closing, repair, improvements) are added in. Add in the fact that the average homeowner sells at 4.5 years and owning a home is a poor choice if you think there's even a decent chance you're not going to be in a place long term.

Depends where you're buying. A large part of it is re-urbanization. Classic leafy suburbs are dying, but home prices are soaring in Boston (though still well south of NYC/SF), and I have plenty of friends in their late 20's/early 30's now who have made a killing on houses or condos in the urban core without intentionally planning to flip anything, just assuming it'd make more sense to own instead of rent for the few years until they planned to move to said suburbs when starting families.

(Btw, this stat is absolutely absurd for what it means long term. "Between 2010 and 2015, Connecticut's population under seven years of age shrank 7.5 percent, while its 65-to-74 population grew 23.5 percent. The vast majority of people leaving Connecticut, Francese said, are young people." Demographics are destiny, and that pretty much spells a death spiral for that state as a whole.)

[CrescentMoonie]

Originally Posted by jeff061

Yes, but the alternative is renting, no? I'll take 1% and something to show for my mortgage payments over a significant negative and nothing.

If you rent you aren't paying any of the property tax, repairs, improvements, etc. I'll take that, and the added flexibility, over the sinkhole that a home can be.

[CrescentMoonie]

Originally Posted by BishopMVP

Depends where you're buying. A large part of it is re-urbanization. Classic leafy suburbs are dying, but home prices are soaring in Boston (though still well south of NYC/SF), and I have plenty of friends in their late 20's/early 30's now who have made a killing on houses or condos in the urban core without intentionally planning to flip anything, just assuming it'd make more sense to own instead of rent for the few years until they planned to move to said suburbs when starting families.

I know someone who did that in DC as well recently. You might end up with the luck of the draw, or just good speculation skills, allowing you to hit a local market boom, but that's likely something I'd just rent out until the prices shoot up and sell for the profit. Personally, I'm hoping to have 3-4 small condos in cities that I like so that I can move about as I please and rent them out when I'm not there.

[Groundhog]

Originally Posted by Mike Lowe

I own a home in the Chicago suburbs which I rent. I then rent myself, and keep my rent below 25% of my take home pay.

This is basically the situation of nearly everyone I know around my age who owns a property here in Australia.

Property prices in Australia are utterly insane right now, however, and it doesn't seem like that's going to change. One friend of mine bought a three-bedroom townhouse in a not particularly flashy part of Sydney 5 years ago for $500k, and sold it 3 months ago for $800k, and then bought a three bedroom house about 1 hour outside of downtown Sydney for just under 1 million.

[RainMaker]

Originally Posted by CrescentMoonie

If you rent you aren't paying any of the property tax, repairs, improvements, etc. I'll take that, and the added flexibility, over the sinkhole that a home can be.

It's built in to your rent.

Rent is 100% a sinkhole. You get nothing in return. At least with a mortgage a big chunk of your monthly costs are going into equity. There is no scenario where renting is better than buying long term even if the housing market drops off a bit.

[CrescentMoonie]

Originally Posted by RainMaker

It's built in to your rent.

Rent is 100% a sinkhole. You get nothing in return. At least with a mortgage a big chunk of your monthly costs are going into equity. There is no scenario where renting is better than buying long term even if the housing market drops off a bit.

Should I Rent or Buy?

It's Financial Suicide To Own A House

The equity earned in the first half of a mortgage is far less than taking that same amount of money and investing in a market index fund.

[molson]

Every situation can be different, but home ownership is THE way to build wealth in the U.S. Your timing can suck depending on when you're in a position to buy, but if you're in it for decades, you're going to win. I cleared $30k in cash after 6 years of owning my first house, and that was with a 5% down payment to start. I paid a little less a month than I would have paid renting, except I got a $30k check when I moved. Now I have a lot of equity in my 2nd house after a few years, and it really does just improve your long-term financial outlook, and for me, just made me feel like a grown-up finally. I'm not paycheck-to-paycheck anymore. I moved to a bigger house in a better neighborhood and my mortgage payment went down. It's like magic. If I decided to move to Europe or Asia or something I could sell my house and go there with enough money to live for a few years. That would have never happened with renting, almost all of that money is pure value increase in the house.