For those of you 55+

[rescueme]

The decade of the 1970's was probably the least appealing decade in my memory.

I'm the same age of you and will agree with your assessment (except for 68-69, when I was in Nam ).

I left the military in early 1971. Went in by myself in 1967 when I turned 19. In 1971 at the age of 23 I was discharged, and I also had responsibility for a young family (DW & DS).

Unemployed, no degree, and no family support (from my parents or in-laws) meant I had to hit the ground running and take whatever I could to put food on the table and a roof over our head.

My first job (after being unemployed a few months) paid $120/week. I left that job after a few months to reduce commute time (50 miles, one way) and get a "raise" to $125/week ....

Times were tough. As you said, interest rates (for homes) were high. We could not afford a "regular" home, so we purchased a single-wide trailer (18% interest on the loan, since it fell under vehicle financing). We stayed there four years (till 1975) till we purchased our first "stick built" home - an old center-city home built in 1906. For the age, it was a nice home since it was originally built in an area that was "wealthy" in the prior century. For that 25-year fixed note/mortgage, we paid 10%.

In 1979 we purchased our next home (a small 2-BR ranch), again on a 10% fixed rate.

1979 was the end of the decade and the start of a new j*b which turned out quite well. I was there till I retired, a bit over 28 years later.

Anyway, that's the story of my 70's as related to financial "stuff" for us. And no, we did not have a penny to save in that decade...

 

[crispus]

I was working at my grandfathers printing company, and listening to him talk about his CD's. I think times were good for us, because everybody needed printing in those days. I played a lot of golf and got my handicap down to a one. My wake up came in the late 80's and 90's when desktop publishing got started. Since then there has been a slow attrition of demand for print and design.

For me this is a much worse time. Low interest rates, stock market in a cyclical bear market, housing equity down, high unemployment, and a general malaise. I think if you are young it is a great time to invest, if you have cash and a lot of time that is.

 

[oldtrig]

I turn 63 in 30 days so I remember those high interest days. My Dad sold me his business in late 1979. I was paying him $500 a month, he had $100,000 in CD's and he was getting SS. If I remember correct he get around 15% on the CD's in 1980. I am sure glad I am no longer in business. Times are bad here. So many people have lost jobs in this small town. I think we are already in depression. I know many parts on the US are in good shape but others are not. I think it will take 10 to 20 years to get out of this mess. Oh how I would like to see those 15% CD's now. oldtrig

 

[beowulf]

I have different memories of the 1970s. I got married at age 21 in 1969, went into the Army and spent the next 6 years dressed in green. Missed what happened from 70-73 in the states completely as we were stationed overseas. Other than Stars and Stripes which carried home news, we didn't get much info from the US - no internet and only military radio in English. Our kids were both born during those years and we spent 73-76 on military posts in the US. You're very insulated when you live and work on post. Plus there are a lot less money worries. We did succumb to one of the pitchment selling mutual funds (with a 6% load) early on and made a big monthly contribution of $50 for several years.

Finally bought our first home in 78 and the interest rate was 9%, if I remember corectly. The really high rates didn't start until about 1980. For us, the 1970s were a good time - got to travel a lot and experience life. Those of you in your early 50's were really young for most of the 70s and going to school. I spent all the the 60s in junior high school, high school and college, so I never really had much responsibility.

I'd rather have low interest rates and low inflation - the 80s were really screwy money wise.

 

[Bestwifeever]

Without 24/7 news, especially financial news, and the easy access to the markets we have today, earlier hard times went right by without us noticing them--and refinancing/taking equity out of a house? Unheard of back then.

 

[Ed_The_Gypsy]

After the army, graduated in '74. Started contributing to company savings plans (later to be called 401k's), 100% stack mutual funds. Could not get permission from DW to max out the contribution.

I have not worried about the economy, ever. I only worry about my ability to stay employed.

I can live with a little inflation. I cannot live with a little unemployment. (Well, I have, but I much prefer inflation.)

 

[Onward]

As for the stock market, in my view few in my age group at that time had any investments at all.

I guess my thread title should have been "For those of you 75+."

My main interest in the 70s was losing my virginity, and investing was a (sadly) foreign concept. But I have to believe the sentiment among investors (in stocks, anyway) was worse than today, what with a prominent national magazine proclaiming the death of equities.

Investors in hard assets were probably feeling better. Wasn't there an antiques craze also?

BTW, these days I am much more interested in investing than in losing my virginity.

 

[CuppaJoe]

....

Was the ... investor sentiment worse in the 70s, or today?

...

I opened an account with a stockbroker friend in 1972, bought into a managed mutual fund and kept it a secret from friends and family because they were so opposed to investing. The mantra I remember was, "investors will lose their shirts." I expected nothing from my funds and still am surprised they did well 35 years along the way. In my small circle the investment sentiment was worse in the '70s. One of the people I knew then is now a wealthy hedge fund manager.

 

[CuppaJoe]

....

BTW, these days I am much more interested in investing than in losing my virginity.

Hope you don't lose your shirt. nm, one thing leads to another.

 

[CyclingInvestor]

I was young in the 70's (12-22), but already reading the paper everyday and interested in the stock market.

Overall, I think the mood was much worse then.

-Worse then

We were facing a much bigger army than ours and Western Europe combined (more troops, tanks, and planes) in Europe, another huge 'horde' in China, and were suffering our embarassment in Vietnam. Now we have the most powerful military by far.

We were facing 000s of Russian nukes that could be launched any day. Now we are worried that someday Iran or North Korea may develop a nuke and delivery/smuggling system that might deliver 1 here.

We has major market crashes in 70 and 73-74. While Japan's market tripled in the seventies, ours had gone nowhere in 15 years (1965-1980). Inflation and interest rates were ramping way up.

The oil price shocks of the 70s were much worse than recent ones. US oil production peaked in 1970, and import levels skyrocketed. Prices increased about 1000% in the decade, with the biggest shock in 1973.

-Better then

Our deficit was under control (national debt as a % of GDP flat in the 70s). Much worse now.

 

[donheff]

Remember Carter's Crisis in Confidence speech - pretty sad really ...

+1 Yeah, in the late 70s we were in a malaise, now we have fears of a long term recession and possible deflation. The big fear in the 70s was inflation. It seemed to me that those of us with a job adjusted pretty well to low double digit inflation. The current situation feels a bit worse but I had a lot less to lose back then. But, later in the 80s, the specter of hyper inflation as experienced in Brazil was truly frightening.

 

[Rustic23]

Stagflation, WIN (wip inflation now) buttons, and Warren Buffet became rich. Not real sure when Warren became rich, but it seems like most of his wealth accumulation would have been through the 70's. I did not get interested in the market until the 80's.

 

[Independent]

Nobody has mentioned the Business Week cover "The Death of Equities" from August '79. It made a lot of sense given the horrible performance of the stock market over the prior 14 years.

But fixed income investments also looked lousy because of inflation.

Remember the "Misery Index"? We struggled with stagflation for most of the decade.

The smart people said that we didn't have the political will to do the things that we needed to do to get out of the trap.

That said, the great majority of Americans would have said they were consuming more and better stuff than their parents or grandparents did at similar ages. I think there was still a feeling that somewhere American ingenuity would find a fix to our problems. We weren't resigned to becoming the world's second biggest economy. Unemployment was mostly a blue-collar phenomenon, if you had a management job you assumed you would ride out a recession.

 

[FinanceDude]

I bought my first car in 1982, and because I had "excellent credit" I got a "super rate" of only 15%...........

 

[Bikerdude]

I bought my first car in 1982, and because I had "excellent credit" I got a "super rate" of only 15%...........

Yeah, I bought a new 81 Honda Civic to beat high gas prices and paid 16% interest.

Average gasoline price nears 1981 record - USATODAY.com

 

[bobcat]

By 1970, I was working as a young physician, very fortunate to have a "decent" income. I had invested in the stock market in 1969, lost almost everything, and never went back to the market until 1990. In 1979, I accumulated enough down payment to purchase a small condo in LA at a 13% mortgage rate. Prices were escalating rapidly. Just wish I had bought some of those 16% treasury bonds back then.....I had to take time off work to wait in gas lines, just to make hospital calls. Even so, my life was easier than most. And now, I am retired thank goodness. While the future is uncertain, the future of medicine is grim for all of us, especially young physicians and patients.

 

[TONASKET]

Yep.. bought my first house with a 13% mortgage too. Opened my IRA with a 15% 2 year CD. Didn't have a credit card till late in the 70's. Lived paycheck to paycheck just like alot of folks today.

 

[haha]

Hope you don't lose your shirt. nm, one thing leads to another.

For sure if a man loses his shirt in middle age he will have little further opportunity to renew his virginity loss ceremony. Remember, losing your virginity is a bit like a tetanus shot- it has to be periodically renewed. If your finances are rocky or you plan a very early retirement, lose the V quickly or you may die with it. I recommend a making a video to remind you later on of what it was like.

Ha

 

[ziggy29]

I'm not 55+, but even if the national mood in the 1970s was worse in the general sense -- with respect to the specific issue of retirement, how did it compare? I can't imagine it could have been worse than today with respect to more and more people thinking they can never retire, but I could be wrong. With SS set to face losses without reforms to make it a worse deal, with pensions going the way of the dodo and personal investments going nowhere, that's a trifecta that seems hard to top.

 

[rescueme]

I can't imagine it could have been worse than today with respect to more and more people thinking they can never retire, but I could be wrong.

Many folks in those years in the private sector did not have to worry about saving/investing for retirement since they had a pension (defined benefit), along with SS and any other savings/investments.

Heck, I even had a retirement pension and I was only making $125/week ...

However, vesting for the pension meant that you had to be with the company for at least 10 years (federal rule at the time). I left after 7+ years and gave it up for a better j*b, that paid much better and also had a pension plan. Of course, by the early 80's, that pension program was gone, replaced by the "superior" 401(k), along with the "make & hope" retirement vehicle of the IRA.

My parents/grandparents retired and had a good life, with their pensions and SS, and never saved a cent for retirement. Of course like pensions, they are no longer around....

 

[antmary]

In the 70's investing was another world for me. It was an exciting time in Santa Cruz, where I lived. As long as the rent was paid, and we had food, that was enough. There was no concept of tomorrow. My world was populated with people interested in inner growth and helping others. I am very thankful for those experiences. Of course, there was all that partying in the early 70's - before I got a clue.

In the early 80's I went through a divorce, and found out about the real world re: money and investing. I have been saving, living below my means, and working to improve my lot ever since. I remarried, and we have both stayed on a financially steady path. Now I am grateful for that "awful" lesson when I found myself broke, single, etc. I took heed, and was young enough to recover.

I think the mood is more negative now, because the outlook for young people seems to be pretty bleak - even college grads. I feel sorry for many of the younger generation. But, if one has a job, there are good opportunities for investing with a long time horizon.

 

[CuppaJoe]

....Remember, losing your virginity is a bit like a tetanus shot- it has to be periodically renewed....
Ha

My doc recommends every ten years for the shot. Note to self: seek second opinion.

 

[Walt34]

I didn't pay much attention to national economics at all. Started with the police dept. when I was a week shy of 23, still living with my parents at the time, and didn't know what to do with all the money. The day I started I was making half again as much as my father had at his peak.

By the time I was out of the academy, which lasted almost six months, I'd saved about $3,500 simply because the classwork was so intense and studying took so much time there wasn't time to even think about partying.

In 1974 I got my first apartment and with the money I'd saved, did the wise and sensible thing, and bought an airplane. Many people know how expensive boats can be. Airplanes are worse.

The recession of 1973-74 was something I read about in the newspaper - I was rolling in dough. Savings? That was what I did to pay for the annual inspection on the airplane.

Married in 1978, divorced in 1983-84, I ended up with two pickup trucks worth of furniture and $7,400 in the bank and felt grateful that I wasn't looking at child support and alimony payments. I do remember thinking about saving hard for a house because the interest rates and housing prices were going up fast and we did buy a house after a year in an apartment, living on one paycheck and saving the other.

Moved into my own house in January 1986, more than just a bit awed that between the two years remaining on a loan for a pickup truck and the house I was a bit over six figures in debt on a gross income of $38k.

So who had time to think about the national economy?

 

[kcowan]

I held a job in the oil-rich country in Alberta. Things were going well. I joint-ventured a multi-unit apartment building with a builder and doubled my money in 18 months. However, after eight years of excellent earnings, I let my ego get in the way of greed and acepted of position in HQ back east.

Held a bridge loan of $250k to buy a house until the last one sold. Interest peaked at 22%. Since then I have had a healthy view on saving and paying with cash.

We were not immune to the malaise, but just could not relate to it.

 

[FIYes]

I graduated from college in the 70's and started my career. I didn't think about investing then---but I was concerned about ever being able to buy a house---lots of inflation and mortgage rates of 14%. I did buy a small house in a working class neighborhood. When mortgage interest rates dropped to 10% I sold that house and bought the house I now live in----started out with the 10% mortgage, refinanced at 7.3% and paid off years early. It was definitely a different interest rate environment. It was a good time to have money in savings, but at that point in my life, just starting out, I was a borrower not a saver.