Another Article on American's Debt

[Teacher Terry]

My ex had a master’s degree in math but preferred to be a tool and die maker. Made good money and lots of overtime. That job is not very hard on your body.

[Samething]

Quote:

Originally Posted by CardsFan Fully agree. I have worked them as well, tho only for a short period of time. But they ARE well paying jobs, and if someone is not inclined to go to college, there are good careers available. FWIW, one of my best friends (not the one previously referenced) worked as a tradesman (non-union) for all of his career. Started as a jack of all trades, worked into a lead position as a mechanic. Invested in his 401k. Company got sold, he left with about $1.5 million. Just a mechanic. No stock options. No "enhanced" benefits. Just worked and invested.

I worked as a tradesman for 34 years and retired May 31st. Even as a supervisor I had to work the trade as well as overseeing other tradespeople to meet the ever increasing productivity goals. Hard work and at 58 I was/am completely burned out physically and mentally.
We were non union but my mega had a ESOP and a 401k. The ESOP was just over 1M and I always put in the max allowable in the 401k and got the shi**y match from mega. I also have lived a LBYM lifestyle so I managed to save a good pile after tax. So the first mil was the nice ESOP and the next mil was me. I was fortunate the company stock did so well but I also worked my a** off.
I had a period in my life when I was first out on my own that I could barely afford to eat and keep a roof over my head. That was a great motivator. It can be done even if you are “only” a high school graduate.

[rk911]

Quote:

Originally Posted by Xelah Yet the Survey of Consumer Finances, which asks respondents for their bank account balance, found the share of households who have less than $400 in their checking or savings accounts was closer to 20%. Having spent the last 10 years of my career working for Habitat for Humanity. I can tell you many of our families had no saving or checking accounts. That way creditors could not go after any money in those accounts. Just a way of life, right or wrong.

had a guy at work like that...no bank account. when we switched everyone over to direct deposit he refused and demanded a paper check. said he cashed them at a currency exchange, paid bills with postal money order and cash for everything else. this was a guy with a good paying job, a wife and kids. he was told to get a bank account if he wanted to get paid/keep his job. he did but he wasn't happy. sadly, he passed away a few years back.

[rk911]

Quote:

Originally Posted by CardsFan Recently had a conversation with a very good friend. We do not agree, politically, but agree on a lot of the issues. He was a tradesman, I was an engineer (both retired). There is a vast shortage of trades people, painters, mechanics, welders, et. al. These jobs pay well, and, for now, have pension benefits (if union). I am at a loss as to why people don't think these are good jobs?

becuz we've been brainwashed into believing that in order to succeed every child must go to college.

[Music Lover]

Quote:

Originally Posted by CardsFan Recently had a conversation with a very good friend. We do not agree, politically, but agree on a lot of the issues. He was a tradesman, I was an engineer (both retired). There is a vast shortage of trades people, painters, mechanics, welders, et. al. These jobs pay well, and, for now, have pension benefits (if union). I am at a loss as to why people don't think these are good jobs?

There's been a decades long campaign telling everyone that a degree was the best way to get ahead. Few people questioned it.

Not only does the right trade pay very well, but working in trades also puts you in contact with other trades which allows you to build up a valuable network of contacts.

[joeea]

Quote:

Originally Posted by Music Lover There's been a decades long campaign telling everyone that a degree was the best way to get ahead. Few people questioned it. Not only does the right trade pay very well, but working in trades also puts you in contact with other trades which allows you to build up a valuable network of contacts.

I'm not sure who is running this "campaign", but most folks understand that not everyone is college material.

Still, https://www.thebalance.com/how-much-...-costs-1289838

"According to the Bureau of Labor Statistics, the pay gap between those with a four-year degree and those with a high school degree is at a record high."

As automation replaces more and more labor, college degrees will become more and more important.

Not everyone is capable or wants to go to college. Hopefully, enough military, service and trade jobs will still exist to give them a living wage.

[Spock]

I used to work with an engineer that was always broke/running on empty... sometimes to the point of not being able to pay his bills. He had a wife and a couple of kids.
One day (mid-1980's) he shows up to work driving a brand new vehicle... it cost just over a years salary (gross, not net).
When asked what he paid for it, he replied "I didn't pay anything for it. The dealer financing covered it".

[MichaelB]

My father didn’t know how to manage money, and apparently neither do his siblings. He grew up like most others his age, during the Great Depression, with very little. He worked very hard all his life and went to law school with three children. He made many smart choices and had an excellent work ethic, he just didn’t have the right “money management gene”.

To my great fortune I learned (or inherited) thrift and saving from DM. What chance do people have that don’t inherit these genes or learn them from their parents?

[ckelly78z]

It goes much deeper than just having debt as the reason there is no cash availability for most people. That double mocha grande latte from Starbux, the latest Iphone 10 loaded with all sorts of apps, wearing new designer clothes, those that still smoke/vape, the cell, and TV service charges that most folks "NEED". These folks also tend to buy alot of impulse items when shopping, and need their entertainment, and dinner out every week.

Little every day purchases are what kills the budget, but don't count towards debt.

[karen1972]

Quote:

Originally Posted by Xelah Yet the Survey of Consumer Finances, which asks respondents for their bank account balance, found the share of households who have less than $400 in their checking or savings accounts was closer to 20%. Having spent the last 10 years of my career working for Habitat for Humanity. I can tell you many of our families had no saving or checking accounts. That way creditors could not go after any money in those accounts. Just a way of life, right or wrong.

I wonder if that includes all those that dont have checking/savings? So many of the banks charge fees these days if you don't have a minimum balance, which leads to them just not having a bank and now that paychecks can come on debit cards its even worse as they charge fees on every transaction but better than a bank overdraft fee.


As for $400, not surprised, know many many of these people, and yes they do spend on things they shouldn't but at the same point when you have nothing, its almost unbearable not to treat yourself at least once in a great while to something. For many to save that $400 would take over a year and is used in the blink of an eye so you start over again.. which means for most that means NEVER getting ahead. If their salaries were going up, they may be able to eventually climb out but for many they are in small towns where jobs are limited and wages are fixed, rent is always increasing and the car is always broken.

My niece was in this cycle and I gifted the 3% down payment for $70k house which they could fix up and make a nice home.. their rent was almost $1000, so all of a sudden they are in a home where costs were fraction of that $1000 and they were right side up, have savings, was able to reduce hours so she could go back to school, now is working thru nursing degree and their future is finally secured.. but could never come up with the down payment so could have been stuck in that cycle of poverty forever. On top of it, they now grow a garden so reduce food costs, have a shop to fix their car in so save money on car repairs, their kids are in a safe environment, better school, etc. $2100 plus some closing costs is nothing for me but everything to them, and you have to wonder how many of the poor are in that same situation, where a few thousand dollars could completely right size their entire world.

This is why I would advocate a total over haul to the social safety network that would advocate a social worker that would have freedom to spend the dollars in unique ways to "right size" households.

and as for trade jobs, I can tell you while many attempt them, its is back breaking work in horrid conditions, like heat index was 110 this week and the trades people behind us are working in houses with zero working electricity so no moving air and working their butts off... you can do it for awhile but most people can't do it long term, their bodies just can't take it... same reason you can't find farm workers. the pay often doesn't offset the long term wear on the body. my x brother in law was a welder, paid per piece, mandatory # of pieces a day, got a hot piece of metal behind his eye shield and almost lost vision in that eye, so he was out.

[Jeffman52]

Quote:

Originally Posted by razztazz What would the economy look like if everyone " knew the value of a dollar" and was financially savvy and fiscally 100% responsible? If everybody saved their money to be spent on medical care or at least insurance, at least 20% down on a house, socked it away to go back to school to upgrade their skills and put their children through college, never ate out or went to a movie or bought an "Apple Crap Device of the Month" or whatever they're selling nowadays, or anything unless and until they had all that responsible stuff paid for first? I mean I want somebody Top Level, Kudlow, Krugmann, et al. Those guys. Do the math.

For good or ill, that would bankrupt an entire segment of the economy that thrives on peoples debt and lack of ability to pay that back. For a short time it would send the economy into a recession because the current economic cycle needs people spending money they don't have.

[Mr._Graybeard]

Quote:

Originally Posted by karen1972 ... my x brother in law was a welder, paid per piece, mandatory # of pieces a day, got a hot piece of metal behind his eye shield and almost lost vision in that eye, so he was out.

Yep, welding is a great career, just don't breathe while you're doing it.

And how about these people, sleeping in expensive tents when they're already under a perfectly good bridge.

[LRDave]

Quote:

Originally Posted by Jeffman52 For good or ill, that would bankrupt an entire segment of the economy that thrives on peoples debt and lack of ability to pay that back. For a short time it would send the economy into a recession because the current economic cycle needs people spending money they don't have.

I was thinking about this post too. It could be more disastrous
than even you lay out. Overall demand for consumer goods would go down permanently. I think it would result in a long recession/depression.

[marko]

Quote:

Originally Posted by Jeffman52 For good or ill, that would bankrupt an entire segment of the economy that thrives on peoples debt and lack of ability to pay that back. For a short time it would send the economy into a recession because the current economic cycle needs people spending money they don't have.

+1
I once read a Sci-Fi novel called "Interface". Premise: the President was proposing to cap the debt (essentially declaring bankruptcy). The investors in the interest on that debt (The Network) were having none of it and were moving to replace the President.

The whole concept made enough of an impression on me to have copied the following segment...

Excerpt:
The United States had borrowed ten trillion dollars over the years. A significant fraction of that debt was now owned by the Network.

Those loans were supposed to bring in a certain fixed amount of interest every
year. The cap proposed by the President would reduce that income by an
amount on the order of a few tens of billions of dollars per year - possibly even
more, if the country went into a deeper crisis and made further cuts.

In the long run, then, the Network stood to lose hundreds of billions of dollars
from the measures that the President had just proposed. [Main character] was therefore justified in spending real money here - easily in the tens of billions [to undo the President's proposal and remove him from office].

For every payer, there's a recipient buying dinner on the interest paid! Maybe some of us through our bank funds or bonds are getting a small slice of those payments every month (?)

[razztazz]

Quote:

Originally Posted by Jeffman52 For good or ill, that would bankrupt an entire segment of the economy that thrives on peoples debt and lack of ability to pay that back. For a short time it would send the economy into a recession because the current economic cycle needs people spending money they don't have.

A short time? How short do you foresee? Not being snarky at all. I would have said "total destruction."

[marko]

OR....

"The percentage you're paying is too high a price
While you're living beyond all your means
And the man in the suit has just bought a new car
From the profit he's made on your dreams..."

Low Spark of High Heeled Boys (Traffic)

[scrabbler1]

Quote:

Originally Posted by karen1972 My niece was in this cycle and I gifted the 3% down payment for $70k house which they could fix up and make a nice home.. their rent was almost $1000, so all of a sudden they are in a home where costs were fraction of that $1000 and they were right side up, have savings, was able to reduce hours so she could go back to school, now is working thru nursing degree and their future is finally secured.. but could never come up with the down payment so could have been stuck in that cycle of poverty forever. On top of it, they now grow a garden so reduce food costs, have a shop to fix their car in so save money on car repairs, their kids are in a safe environment, better school, etc. $2100 plus some closing costs is nothing for me but everything to them, and you have to wonder how many of the poor are in that same situation, where a few thousand dollars could completely right size their entire world.

Karen, what a wonderful demonstration of the "multiplier effect" on an individual level and how it so greatly improved the life of your niece and her family.

[Spock]

Quote:

Originally Posted by razztazz What would the economy look like if everyone " knew the value of a dollar" and was financially savvy and fiscally 100% responsible? If everybody saved their money to be spent on medical care or at least insurance, at least 20% down on a house, socked it away to go back to school to upgrade their skills and put their children through college, never ate out or went to a movie or bought an "Apple Crap Device of the Month" or whatever they're selling nowadays, or anything unless and until they had all that responsible stuff paid for first? I mean I want somebody Top Level, Kudlow, Krugmann, et al. Those guys. Do the math.

It would be an economy based on investing savings surpluses vs. debt fueled.
Some of the countries with the highest savings rates (in the top 20) are Switzerland, S. Korea, Ireland, Norway...
The US is 113th...

The only reason to worry about transitioning is because the debt fueled economy is like going 75mph down the interstate all day makes driving on a 45mph road feel like you're crawling.

[razztazz]

Quote:

Originally Posted by scrabbler1 Karen, what a wonderful demonstration of the "multiplier effect" on an individual level and how it so greatly improved the life of your niece and her family.

There's a charity who does this kind of thing. Not exactly spot people down-money for a house but covering a necessary car repair, missed rent payment, or other relatively small but critical unexpected economic set back that can lead to that downward spiral Lose car=lose job. Lose apartment=lose permanent address= no way or severely hampered in even looking for work. Lose job = lose everything.

The guy who started it tells his story of how when he was down and out or on the fringe some small favor from an average person kept him going and out of the economic vortex long enough to get back on track.

[ExFlyBoy5]

Quote:

Originally Posted by razztazz What would the economy look like if everyone " knew the value of a dollar" and was financially savvy and fiscally 100% responsible? If everybody saved their money to be spent on medical care or at least insurance, at least 20% down on a house, socked it away to go back to school to upgrade their skills and put their children through college, never ate out or went to a movie or bought an "Apple Crap Device of the Month" or whatever they're selling nowadays, or anything unless and until they had all that responsible stuff paid for first? I mean I want somebody Top Level, Kudlow, Krugmann, et al. Those guys. Do the math.

We all know that is never going to happen. We are a society that lives for RIGHT NOW and low, monthly payments. The producers of products have gotten very smart to this...you can subscribe for a "low monthly price" for everything from razors to dog food to dinner to underwear to well...you get the idea. Shoot, people are now LEASING mobile phone?

So the odds of this happening is about the same as everyone stops eating at McD's and starts going to the farmer's market and slaughtering their own meat.