Awkward Wealth

[aja8888]

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Originally Posted by EastWest Gal Just stop by a physician's parking lot at one if the hospitals around here...that's where I 'm working right now. But the BMWs aren't mine. I have a Prius. I hope you enjoyed your trip. Sent from my iPhone using Early Retirement Forum

Beautiful part of Pennsylvania and great people here. I was raised early in life in the Scranton/Wilkes Berre area (Father and grandfathers were coal miners). That area is so much different than here. Tomorrow I am in Pleasantville (Venango County) and home Friday.

[Al in Ohio]

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Originally Posted by purplesky What I said is that 20 years ago most college grads were finding good paying jobs. In the 90s. You could pay down a student loan type wages. But Now a large number of college grads are only landing a job at Starbucks or Target. These are low income jobs that high school grads can also get. Most of the new jobs being created are lower income type service jobs so I don't see why this is such a surprise. So if the avg. wage is around $20hr for college grads. That would seem to put millions of college grads in a pretty low wage demographic.

You didn't check my links I resourced for you. Over 90% of recent college grads are actually finding employment at a median salary of just under $45,000 per year. That's equivalent to almost $22/hr which is triple the pay of an average entry level job at Target or Starbucks, so your statement that "most college graduates are having to settle for lower paying work at Target or Starbucks" is totally bunk. You might live in NYC or San Fran or some other high cost of living area, but for the sake of the median salary of $45k for a 25 year old, that gets you started pretty well in most of the country. Plus as we all know, those early years from 25-40 can yield the biggest annual raises that compound quickly over those years.


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[FIREmenow]

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Originally Posted by aja8888 I firmly believe that if a person who has goals, some smarts, ambition and spark, can go through college these days and find a great job.

Bingo!

....and it doesn't even take a college degree. My son is a shining example - doing well after deciding, after 2yrs of college (whichI paid for!), that it was not for him. He's got that "thing" though.......

[Jaded salami]

just read though the posts for the last few days. My personal experience seemed much like brewer, job hopping helped to accelerate my ER. Good jobs seem as difficult to get for college grads but not all that different then when I graduated in 83, the real difference is that college costs and debt levels for grad have skyrocketed. The key is to stay current in your field (and in your network).

[purplesky]

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Originally Posted by Al in Ohio You didn't check my links I resourced for you. Over 90% of recent college grads are actually finding employment at a median salary of just under $45,000 per year. That's equivalent to almost $22/hr which is triple the pay of an average entry level job at Target or Starbucks, so your statement that "most college graduates are having to settle for lower paying work at Target or Starbucks" is totally bunk. You might live in NYC or San Fran or some other high cost of living area, but for the sake of the median salary of $45k for a 25 year old, that gets you started pretty well in most of the country. Plus as we all know, those early years from 25-40 can yield the biggest annual raises that compound quickly over those years. Sent from my iPad using Early Retirement Forum

Yes but the problem is that a huge number of college grads are now underemployed and earn below a living wage.
Because most of the new jobs being created are low wage service jobs.

So is Corporate America suddenly going to start giving raises? Doesn't appear that way?

This economy just hasn't seen any real wage growth for a LONG time.


If somebody told you back in 1990 that college grads in 2014 on average will only be making 45k would you have been impressed?

[kombat]

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Originally Posted by eta2020 if you happen to wear 100k watch don't assume that somebody else who wears 10 dollar Seiko can not easily afford your watch.

Why not? You're right that it's not a guarantee, but it certainly is a pretty good bet. The vast majority of people cannot afford to spend $100k on a wristwatch. Therefore the vast majority of people out there wearing a $10 Seiko indeed cannot afford your watch.

The fact that 0.01% of those folks might actually be wealthy and could afford that $100k watch, if they really wanted to, does not make it a bad assumption.

When I see a man pointing a gun at the clerk in the gas station and demanding money, I assume he's robbing the place and call the cops. The fact that there's a slim chance they could actually just be filming a movie doesn't make it a bad assumption.

[kombat]

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Originally Posted by purplesky This economy just hasn't seen any real wage growth for a LONG time.

It hasn't seen any real inflation, either.

[Andre1969]

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Originally Posted by aja8888 Question...which cars did the ex get?

I gave her the '88 LeBaron, and $3,000 to make her go away. It was a turbo coupe, leather interior, pretty well-loaded, so it was a nice car, but it was getting up in miles...had about 90,000 when we split. My family was miffed, said I should have given her the Dart, but I knew what I was doing. The Dart, at least, was cheap to fix when it broke. The LeBaron, not so much.

I think the LeBaron made it to around 115,000 miles or so, but along the way the power antenna broke, the a/c compressor seized up, the transmission started leaking fluid, a few other odds and ends I can't remember, and it ended up warping the head and blowing the head gasket. Her mother helped her pay for a new gasket and a used head, but the car still ran like crap. I was still in touch with her at the time, and we were on a somewhat friendly basis, so I took the car to my mechanic and had him look it over. It turns out that whoever put the head on did a bad job reattaching all the wiring and vacuum hoses that were disconnected in the process, so they got it running, about as well as could be expected, for $75. They also said compression was really bad in two cylinders, marginal in the other two, and the turbo was shot. And not to put another dime into the car!

One night, it finally died in her grandfather's driveway, which was where she was staying. And then one of the tires went flat. I ended up buying it back from her for something like $90, because she wanted two tickets to go see Faith No More at the 9:30 Club in DC or something like that. Pumped the tire up, managed to jump start it, and it was blowing white smoke out the tailpipe, and I could smell antifreeze. So apparently the head/gasket had gone again. Managed to limp it over to my grandmother's house, where I was staying at the time, and ultimately sold it for $800, to someone who wanted it for parts. It still looked like an almost new car, except for one spot in the roof where the paint was just starting to wear through to the primer...a common issue with cars of that era.

As for the Dart, it made it to around 338,000 miles, and as time went by I drove it less and less. Eventually, it wouldn't start one morning. I think it was just the fuel pump, but at the time I was still tight on funds, so I didn't have the time or money to fool around with it, and just let it sit. Eventually sold it for $400, back in 2009.

I ended up selling the Bonneville for parts, as well, and now that I think about it, I believe I got about $400 for it, too. Finally paid my uncle for the LeBaron in late 1999...4 years late, but better late than never I guess. Still got the DeSoto, although we registered it in my name years ago. It's undergoing restoration and is actually costing me more for that than the ex-wife did! But, at least I can afford it now. Still got the Catalina convertible too, although I did get the top fixed. Still keep it indoors though.

[eta2020]

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Originally Posted by kombat Why not? You're right that it's not a guarantee, but it certainly is a pretty good bet. The vast majority of people cannot afford to spend $100k on a wristwatch. Therefore the vast majority of people out there wearing a $10 Seiko indeed cannot afford your watch. The fact that 0.01% of those folks might actually be wealthy and could afford that $100k watch, if they really wanted to, does not make it a bad assumption. When I see a man pointing a gun at the clerk in the gas station and demanding money, I assume he's robbing the place and call the cops. The fact that there's a slim chance they could actually just be filming a movie doesn't make it a bad assumption.

What Kind Of Car Do Millionaires Drive? - ElevenTwo Fund Management

"The research shows an overwhelming majority [86% of the people] that we see driving luxury cars like Mercedes, BMWs, Acuras, Volvo (my personal favorite), and Lexus are not millionaires. Most of society believes that if someone is driving a Porsche, then they are a millionaire, but it’s the exact opposite. If you see someone sitting in a Cadillac at a traffic light there is an 86% chance that they are not a millionaire."

Expensive watch likewise indicates "high earner" but not necessarily "high assets".

[Andre1969]

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Originally Posted by kombat It hasn't seen any real inflation, either.

Except for a few minor details like a college education, health insurance, groceries, gasoline, some taxes, etc.

I remember not that long ago, when a gallon of milk was around $2.25-2.50 per gallon. Now it's more like $4-4.50. Gasoline, even though it's come down somewhat, is still historically high. When I first went full-time back in early 1994, my health insurance was around $10 every week and there was no co-pay. Now it's about $100 every two weeks. For awhile it was a $30 co-pay, but suddenly there's a bunch of stuff the insurance won't pick up the full tab for anymore, so on my last doctor visit I got hit with an additional bill of $63.

When I started college in the fall of 1988, at the University of Maryland, my first semester was about $900. My final semester, spring of 1993, it had gone up to $1500. Nowadays, I think it's something like $5000 per semester, just for tuition!

As for taxes, they will vary by state, but in 2008, Maryland raised its sales tax from 5 to 6%. Effectively, that's a 20% jump right there!

However, some things, such as home electronics, cars, etc, have actually come down in price, especially once inflation is factored in. But, if you're having trouble paying for college, gasoline, groceries, etc, chances are you're not able to take advantage of the fact that, adjusted for inflation and content, a 2014 Accord is actually cheaper than a 1994.

[dallas27]

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Originally Posted by eta2020 What Kind Of Car Do Millionaires Drive? - ElevenTwo Fund Management "The research shows an overwhelming majority [86% of the people] that we see driving luxury cars like Mercedes, BMWs, Acuras, Volvo (my personal favorite), and Lexus are not millionaires. Most of society believes that if someone is driving a Porsche, then they are a millionaire, but it’s the exact opposite. If you see someone sitting in a Cadillac at a traffic light there is an 86% chance that they are not a millionaire." Expensive watch likewise indicates "high earner" but not necessarily "high assets".

Wait a second. If i buy a cadillac, theres a 14% chance i'm a millionaire. That seems pretty good.

(Wife drives Porsche, bought slightly used during the big downturn)


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[eta2020]

I am not saying one should not buy BMW or Rolex if they desire so.

What I am saying it does not indicate success just as driving Civic does not indicate failure as far as NW goes.

[Lucantes]

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Originally Posted by dallas27 Wait a second. If i buy a cadillac, theres a 14% chance i'm a millionaire. That seems pretty good.

Now there is an ad campaign they should run!

[Andre1969]

I couldn't get that link to pull up, but I've heard it said elsewhere that the most common vehicle owned by millionaires is actually the Ford F-150. However, pickup trucks aren't cheap nowadays...you can easily option an F-150 into the $60,000 range. And that's just a half-ton truck...then you have the "real" trucks...3/4, 1-ton that are better suited to hauling heavy trailers and such.

A few years back (and probably more years than I'm thinking), I remember reading an article that mentioned which brand sells the most $50K plus vehicles. It wasn't the obvious players, like Benz, BMW, Audi, etc. Or even Cadillac or Lincoln. It was Chevrolet! And it was because of all the trucks...well-loaded Silverados, Tahoes, and Suburbans helped those numbers to swell up, although I imagine the Corvette helped as well.

[eta2020]

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Originally Posted by dallas27 Wait a second. If i buy a cadillac, theres a 14% chance i'm a millionaire. That seems pretty good. (Wife drives Porsche, bought slightly used during the big downturn) Sent from my iPhone using Early Retirement Forum

So do remaining 86% of buyers buy Cadillac so that they can "look" like millionaires? I wonder........

[photoguy]

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Originally Posted by eta2020 "The research shows an overwhelming majority [86% of the people] that we see driving luxury cars like Mercedes, BMWs, Acuras, Volvo (my personal favorite), and Lexus are not millionaires. Most of society believes that if someone is driving a Porsche, then they are a millionaire, but it’s the exact opposite. If you see someone sitting in a Cadillac at a traffic light there is an 86% chance that they are not a millionaire."

I liked the millionaire next door as it provided real life examples of wealthy people who LYBM. However, I'm very skeptical of these more sweeping generalizations produced by Stanley. As far as I can tell he used a tiny sample of millionaires (944) who were willing to fill out a long survey for $1. He also doesn't include people who have a pension (with estimated worth > $1M) but who haven't started taking payments.

[Amethyst]

Perhaps they do. In an older thread, I mentioned the significant number of BMWs, Benzes, and other high-end cars parked in front of $250K garageless town houses where we used to own a rental unit. Whether these cars are owned or leased, I have no way of knowing. I also can't know whether their owners are multi-millionaires, who happen to value transportation over housing. What I surmise, however, is that they can't afford a nicer house, so they make it up to themselves by leasing a car that will impress others.

Amethyst

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Originally Posted by eta2020 So do remaining 86% of buyers buy Cadillac so that they can "look" like millionaires? I wonder........

[HFWR]

Some who buy "luxury" goods are snobs. Some are "rich", and some are wannabes, or, as I like to call it, "$30000 millionaires". And, some on the other end of the scale blame "the man" or "the system" for their lack of success.

Rash generalizations are just that, rash, and general...

As for college, and the associated job market, indeed some college graduates should have been taken aside and told that their degree in basket weaving will not be worth the paper it's printed on.

[eta2020]

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Originally Posted by HFWR Some who buy "luxury" goods are snobs. Some are "rich", and some are wannabes, or, as I like to call it, "$30000 millionaires". And, some on the other end of the scale blame "the man" or "the system" for their lack of success. Rash generalizations are just that, rash, and general...

Correct. Just like somebody will buy BMW for pleasure of it and just to enjoy it (not to pretend to be rich) there will another guy who does not give damn about what he drives.

You will have better success by looking at their teeth to determine how money they have . It is just like with horses. Because people with money do tend to take care of their teeth.

[Andre1969]

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Originally Posted by eta2020 You will have better success by looking at their teeth to determine how money they have . It is just like with horses. Because people with money do tend to take care of their teeth.

Or so you'd think. I go to a lot of classic car shows over the year, and for the longest time, we'd run into this lady who had what was probably the nicest 1965 Chrysler New Yorker 4-door hardtop in existence. She put A LOT of money into that car. However, one day, one of my friends said "did you notice her teeth?!" I hadn't, but the next time we saw her, I made a point of it and yeah, they left something to be desired. Sad thing is, after my friend made that comment, I tend to notice people's teeth more than I used to.

Now, I don't know how well-off this woman was in general; maybe she just blew everything she had on her car. FWIW, a 1965 New Yorker 4-door hardtop isn't exactly a high-value car, but it can cost as much, if not more, to restore one than a more popular, valuable hardtop coupe or convertible, simply because there's more aftermarket for those more desireable body styles.

I think a lot of people are also afraid of the dentist, so no matter how well off they are, they'd rather deal with bad teeth than get them fixed.

I've heard another way to check a person's wealth is to check out their shoes. If a person is trying to put on airs, but their shoes are in need of repair or replacement, that's a sign that they're falling from grace. At least, that was the case in an episode of "The Waltons"