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Old 02-10-2016, 02:16 PM   #101
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As I also noted in my post (although perhaps not clearly enough), people's expectations for living standards increased at a faster rate than their incomes, which for most households actually have been flat for the last 30 years in real terms.U.S. Household Incomes: A 47-Year Perspective - dshort - Advisor Perspectives

I doubt that most people today would accept the way we lived when we were young children. If they did, yes, they would have more money to save. But they don't, and I don't think we'll be able to jawbone them into changing their minds anytime soon.
While all this is very true, the US went through a major shift in lifestyle in the late '70's. Whether it was for independence, equality, economics, or whatever, a larger percentage of women entered the workforce and were no longer many stay-a-home moms. This has created a HUGE monetary cost for society.

Higher incomes have forced families into higher tax brackets. Taxes increased. Families needed child care options; originally some families had grandma or a neighbor watch the kids. Then regulations were demanded after the need escalated and much needed government subsidies were available. Costs increased. Mom needed a car and a wardrobe. Costs increased. School breakfast programs became mandatory after kids weren't getting fed because of poverty, or parents weren't home to feed them. Etc. Etc.

My DS and DIL pay over $10,000 for one kid alone in annual daycare; they just had their second. DW and I would cherish watching them for the day, but they're on the other side of country. They both have great professional jobs, but the costs is staggering. I'm not even going to mention HUMAN cost.
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Old 02-10-2016, 03:22 PM   #102
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The U.S. government is starting to put more college ROI information online and in one central location. The College Scorecard is a good start:

https://collegescorecard.ed.gov/
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Old 02-10-2016, 04:38 PM   #103
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My son recently told me about his cousin (on his mom's-my ex-hence I'm not terribly close).

Her dad is a great guy, made a pot full of money by studying hard, and working hard. His daughter-in-law is always complaining about how hard it is for her and his son, and how poorly society is treating them. So they moved in with 2 kids.

While living under his roof and always harping about how unfair it is that he made so much money and they can't seem to get a step ahead, she goes out and gets a tattoo that my son estimates cost at least a thousand dollars.

Ok...that's extreme, and as much as I love my ex-bro-in-law, I'd have exploded long ago, but what is not extreme, and what I see all of the time, is the decision to buy non-essential items in lieu of saving anything. I suspect that among all of those millennials we hear about struggling so mightily (with requisite tattoos and smartphones) there are quite a few NOT making those decisions, and for whom, society doesn't seem to be treating so unfairly.

And as for me, well, my dad retired in 1989 with 1M, and lived on a 15% WR, and when he bought real estate it went UP, and so I could complain that life is hard for me because it looks like I may be living with a 2 or 3% WR...and it's just not fair!
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Old 02-12-2016, 11:09 AM   #104
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I hike a lot with a mixed group of people (young, old, retired, working, etc.). So lots of interesting conversations as we tromp our way up to summits. One of the regulars, mid-40's, works PT has a daughter that will graduate HS this year. She has been in ballet since she was in grade school and gets small parts in the local dance community. She has applied to college and has been accepted into a small Seattle Arts school that will allow her to continue to dance. Cost is $33k and does not include books or room & board. She qualifies for a small scholarship and the Mom is considering this school as long as her daughter can get loans. I asked her what type of job will she get after graduation from such a program. She didn't know, but thought maybe working for a theatre group, but she really wants her daughter to go to college and still get to dance because that is all she is interested in. It will be interesting to see how this plays out.
I interviewed and hired a lot of young people my last ten years in the workforce and I was continually surprised at the degree choices.
It seems that getting a college degree that leads to a decent job isn't the goal anymore.


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Old 02-12-2016, 12:15 PM   #105
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. . . She has applied to college and has been accepted into a small Seattle Arts school that will allow her to continue to dance. Cost is $33k and does not include books or room & board.
Why does she need to go to college to learn to dance? Keep the activities separate and she might get a degree that serves her far better down the road. Not many 40YO ballerinas.

"Dear wonderful daughter: We share your ballet dream and want the best for you. Go to our very nice community college and then transfer to our state 4 year college, get a degree that is in demand. As you do that, Dad and I will pay for a good private ballet coach and all the costs of that, up to $10K per year for 4 years, provided you are a full-time student and maintain a GPA of 2.7.

A career in ballet requires physical strength, and that requires that you eat. A degree in the performing arts is a wonderful thing, but history shows it may fall short of allowing you to earn the income needed for you to actually buy food. "

Not that I was successful in getting my own DD to hew to the path I desired . . . .
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Old 02-12-2016, 12:21 PM   #106
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One of my golf buddies in Houston had a daughter that went to some fancy college in NYC to study harp.

Harps cost a ton of money.
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Old 02-12-2016, 12:36 PM   #107
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Some observations:
- The tuition may have gone up 19 fold, but the other costs of being a full-time student (books, transportation, room, board, etc) haven't gone up that much. So the increased cost of "getting there" is a LOT less than twenty times as much.
- And the "twenty times" sounds terrible, but it's because the original amount was so small. I remember, I was a full-time student at a CA state college in the early 1980s. We complained loudly about the increases in "registration fees" (i.e. tuition), but they were a small part of my expenses. Fees for a quarter were equal to my part of one month's rent for a shared rundown apartment.
At least an engineer is getting a valuable degree for his tuition. Assuming that starting salary of 60K is about double what he'd get without a degree, he'll have earned enough "extra" to pay off 4 years of tuition in just two years of work. Is this the staggering student debt load we keep hearing about? I doubt it.

But, I'm sure it seems "staggering" if our newly minted grad has a degree that leaves him/her employable only at $10/hour. And if she/he "lived well" during the college years(on borrowed money), "extended their studies" to 5 or 6 years, and didn't bother to take a part time job to offset some living expenses, then I'm positive it would feel "staggering." Poor choices . . . well, maybe that's the biggest lesson they get from college.
On the contrary, the associated costs have also risen disproportionately. Text books and housing cost increases have far exceeded the increase in pay for low wage student jobs. My late 70s book budget per quarter was roughly $100. Check prices for standard texts on Amazon. You won't find a single textbook for much less than $100. Textbooks have shot up in price. Ditto the cost of living for those newly graduated engineers.

Yes, I paid a tiny amount for my education, but that was because the older generation was supporting me through their taxes. For me to pat myself on the back for having graduated without debt (I did! No grants or other aid either!) without acknowledging that I was handed a bargain would be wrong. For me to sniff that I shouldn't have to pay taxes to support "other people's children" is equally wrong. I got to where I am (and a very nice place it is, too!) because other people paid for my education.

Edited to add that my free education allowed me to earn $30K or the equivalent of $71K this year with no student debt. That still leaves me at a better starting point than today's students graduating at a starting salary of $67K with debt to pay.
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Old 02-12-2016, 01:26 PM   #108
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One of the regulars, mid-40's, works PT has a daughter that will graduate HS this year. She has been in ballet since she was in grade school and gets small parts in the local dance community. She has applied to college and has been accepted into a small Seattle Arts school that will allow her to continue to dance. Cost is $33k and does not include books or room & board.<snip>I asked her what type of job will she get after graduation from such a program.
I can offer my niece's experience. Her dream was to be a Rockette in NYC so she got her BA in dance. What she actually did though was a different times join Ringling, Barnum & Baily circus and ride an elephant and hang by a rope tied to a harness so it looked like it was tied around her neck and spin. She did get to see Japan that way though. She was an entertainment director on a small cruise ship and is now a part time process server in Las Vegas.

Not quite the career she envisioned....
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Old 02-12-2016, 02:20 PM   #109
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Anyone in America can be a millionaire if they have enough drive, determination and ambition.

I agree with you Senator! It all starts with the individual and what they want in their life. (Barring physical health).
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Old 02-12-2016, 03:53 PM   #110
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On the contrary, the associated costs have also risen disproportionately. Text books and housing cost increases have far exceeded the increase in pay for low wage student jobs. My late 70s book budget per quarter was roughly $100. Check prices for standard texts on Amazon. You won't find a single textbook for much less than $100. Textbooks have shot up in price. Ditto the cost of living for those newly graduated engineers.

Yes, I paid a tiny amount for my education, but that was because the older generation was supporting me through their taxes. For me to pat myself on the back for having graduated without debt (I did! No grants or other aid either!) without acknowledging that I was handed a bargain would be wrong. For me to sniff that I shouldn't have to pay taxes to support "other people's children" is equally wrong. I got to where I am (and a very nice place it is, too!) because other people paid for my education.

Edited to add that my free education allowed me to earn $30K or the equivalent of $71K this year with no student debt. That still leaves me at a better starting point than today's students graduating at a starting salary of $67K with debt to pay.
well said. I think young people can still do OK if they stick to public schools, in-state. My daughter wanted to go private, and south (we live in NY State)...I said "no. School is school. Education is education. I'm not paying for your geographical adventures." It was easy to deny her this partially because she was, at best, an indifferent student. Of course, had she been a star student she'd have earned a scholarship and had more intriguing choices.
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Old 02-12-2016, 07:22 PM   #111
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On the contrary, the associated costs have also risen disproportionately. Text books and housing cost increases have far exceeded the increase in pay for low wage student jobs. My late 70s book budget per quarter was roughly $100. Check prices for standard texts on Amazon. You won't find a single textbook for much less than $100. Textbooks have shot up in price. Ditto the cost of living for those newly graduated engineers.

Yes, I paid a tiny amount for my education, but that was because the older generation was supporting me through their taxes. For me to pat myself on the back for having graduated without debt (I did! No grants or other aid either!) without acknowledging that I was handed a bargain would be wrong. For me to sniff that I shouldn't have to pay taxes to support "other people's children" is equally wrong. I got to where I am (and a very nice place it is, too!) because other people paid for my education.

Edited to add that my free education allowed me to earn $30K or the equivalent of $71K this year with no student debt. That still leaves me at a better starting point than today's students graduating at a starting salary of $67K with debt to pay.
+1
Very well put AllDone! I bet that the previous generation's investment in you paid off handsomely too, not only in the intangibles you had to offer by being a better educated citizen, but also in the increased taxes you paid because of your higher income.
I got through college too without debt and with no financial support from home, but I did not do it by myself. I have to thank that generation too for providing me with the opportunity to get an education at a reasonable expense. It pains me to say it, but I do think my baby boomer generation has failed in some respects to allow college costs get so out of hand like this.
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Old 02-12-2016, 09:38 PM   #112
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When I went to college, SF state, tuition incl books was about 1000/yr. Beginning of 1980s. Now that is about 8000/yr. The huge difference between then and now is what I got paid for part time work. I worked as a hospital janitor for 9.25/hr. A job at UPS paid 8.50/hr at the time. Not hard to pay my college fees on that. Today the jobs don't pay much more than what they paid over 30yrs ago. That's indeed a huge disadvantage for anyone trying to make it without help.


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Old 02-12-2016, 10:01 PM   #113
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+1
Very well put AllDone! I bet that the previous generation's investment in you paid off handsomely too, not only in the intangibles you had to offer by being a better educated citizen, but also in the increased taxes you paid because of your higher income.
I got through college too without debt and with no financial support from home, but I did not do it by myself. I have to thank that generation too for providing me with the opportunity to get an education at a reasonable expense. It pains me to say it, but I do think my baby boomer generation has failed in some respects to allow college costs get so out of hand like this.
+1 Though I had a full-tuition scholarship to SUNY upon HS graduation, my parents had always dreamed of moving to CA after visiting there on family vacations.

Jobs for kids were scarce in Western NY in the early '70's, so there was no way for me to earn room and board $ for college. So CA's reputation for inexpensive public colleges held even more allure for Mom and Dad.

When we moved, I gave up the SUNY scholarship and attended a CA community college while living at home and working. Transferred to a CSU (after earning a CA state scholarship which, again, covered "fees"/tuition). Finished BA in '75, teaching credential in '76, and found a teaching job. Only owed $550 on a Nat'l Defense Student Loan ($300 of which had gone to pay for a used piano, for my music minor).

Could pay off that loan in Year 1 of teaching. After Year 3, returned to school full-time, this time to earn an MA in English at a UC. Degree only cost the $ I earned as a TA, teaching one freshman comp course each quarter.

Then I returned to teaching HS English.........and some college courses PT.

But, yes, this somewhat circuitous route was possible because of the CA taxpayers of that generation. Back in the '70's, my old HS friends in NY were graduating with debt. I had very little, thanks to the CA subsidies to higher ed. I will always be grateful. Minimal debt was a great way to start-- and continue-- a teaching career. DH and I lived like typical grad students during my 2 yrs. as a TA at the UC. But that degree dramatically enhanced my career and opened many doors.

Thank you , California. I wish your students today could have a similar experience. (Before I moved to Ohio, my former students who had graduated from my Bay Area HS would return to visit and update me on their lives. It was not unusual for good students to tell me it was taking them 6 years to get through a CSU: partly because of the hours they needed to work to pay for school, partly because of limited course availability. Campuses had to reduce courses due to funding cuts.)

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Old 02-12-2016, 10:31 PM   #114
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An interesting set of dynamics at work. Starting in the 1980s, most states began to reduce funding to public colleges, and tuitions rose to make up the difference (and then some, as overall total real spending per student continued to increase). In response, the federal government (directly, and backing private lenders) made college "more affordable" by encouraging lending to students. This had the predictable result of increasing the price of education--at both public >and< private schools. And now we have a wave of loan forgiveness initiatives, which means increasing costs to taxpayers.

Would taxpayers have been better off to have just continued the pre-1980s policy of more fulsome direct funding of public institutions, rather than funneling money through students--thereby driving up costs and encouraging "revenue enhancing" behaviors by schools (easy/worthless degrees to attract more "customers, the race to build lavish facilities for the same reason, etc).

Would students have been better off? More go to college today. But it costs more to educate each one than it used to (even in inflation-adjusted terms).

Conceptually, I'm predisposed to let the market (not state or federal legislators) decide how many college seats are the right number. But when the "customers" aren't really paying the bill, it makes for bizarre incentives for all the participants and a very distorted "market." And that's what we have today. Also, in health care.
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Old 02-13-2016, 08:55 AM   #115
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I had a high school friend who pursued ballet during college. Taking dance classes at college an dancing with the city's company, during her undergraduate. But she then went and got a PhD in Chem Engineering at CalTech and has worked at JPL for her entire career. So it's possible to be a ballet dancer AND a rocket scientist.
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Old 02-13-2016, 11:41 AM   #116
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I had a high school friend who pursued ballet during college. Taking dance classes at college an dancing with the city's company, during her undergraduate. But she then went and got a PhD in Chem Engineering at CalTech and has worked at JPL for her entire career. So it's possible to be a ballet dancer AND a rocket scientist.
We went to a play a few months ago and I noticed from reading the bios one of the actors was a doctor by day and actor evening and weekends.
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Old 02-13-2016, 12:14 PM   #117
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College costs are higher these days but they also have to be considered net of factors like financial aid, scholarships, internships, work study credit, on campus tutor jobs, community college transfer credit, CLEP / AP credit, and online classes. Online classes from community colleges can be pretty cheap - there aren't even any mileage costs. Internships in hot fields can pay pretty well. Being a club president or officer doesn't cost much and can help hone public speaking and soft skills as well as help with post-college networking. In California families can get financial aid up to even $150K in household income for public schools. We read all the stories about exorbitant college costs and for our family none of that so far has turned out to be true.
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Old 02-19-2016, 06:15 PM   #118
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It's clearly an article intended to push people to advocate for the Social Security program:

"But donít count on a comfortable standard of living if you plan to live off Social Security ó the GAO says it provides only about $17,000 a year. The GAO also says this fund will be insolvent by 2034, leaving many of us with nothing at all."

Please. If half of the country is 100% dependent on SS for their retirement income, as stated later in the article, and the rest of us like SS payments rather a whole lot, as we do, politicians are going to fix SS before it goes bankrupt.
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Old 02-19-2016, 08:13 PM   #119
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It's clearly an article intended to push people to advocate for the Social Security program:

"But donít count on a comfortable standard of living if you plan to live off Social Security ó the GAO says it provides only about $17,000 a year. The GAO also says this fund will be insolvent by 2034, leaving many of us with nothing at all."

Please. If half of the country is 100% dependent on SS for their retirement income, as stated later in the article, and the rest of us like SS payments rather a whole lot, as we do, politicians are going to fix SS before it goes bankrupt.
Note that the studies show that if nothing is done in 2034 income from SS taxes alone will pay 75% of promised benefits not nothing, as SS does have income coming in.
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Old 02-19-2016, 08:27 PM   #120
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Note that the studies show that if nothing is done in 2034 income from SS taxes alone will pay 75% of promised benefits not nothing, as SS does have income coming in.
That could mean either 1) everyone gets 75% of promised benefits; 2) 75% of people get full promised benefits and 25% of people get zero; or 3) something in between.
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