If we can do it, anyone can?

[SmallCityDave]

It is an opinion piece citing a number of actual research studies.

And other opinion pieces in the same publication.

 

[SmallCityDave]

All opportunities IMO are here today, for everyone that wants them bad enough. You just have to be creative, and will yourself to make the goals you want. Sacrifices will have to be made at every turn but having a good retirement financially, can be accomplished where every you live and work in the US.
Just my 2¢ and I'm a believer in that, no matter how many bumps along the way you can achieve what you have set out for if you want it bad enough.

People are doing it everyday


It's still the land of opportunity!

 

[daylatedollarshort]

And other opinion pieces in the same publication.

These are some of the studies referenced in the article -

Poverty impedes cognitive function
https://scholar.harvard.edu/files/sendhil/files/976.full_.pdf

The Psychological Lives of the Poor
https://economics.mit.edu/files/11364.pdf

Does Financial Strain Lower Worker Productivity
https://www.semanticscholar.org/paper/Does-Financial-Strain-Lower-Worker-Productivity%E2%88%97-Kaur/c6d2478fed81a0fd97d4d0f1ebb8449fc1de0a5b?p2df

A Review of Consequences of Poverty on Economic Decision Making
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5641572/

Cognitive Droughts
https://scholar.harvard.edu/files/glichand/files/cognitive_droughts_nov18.pdf?m=1447880181

 

[SmallCityDave]

Food, Clothing and Shelter - these are the three things that a human really needs. Most Every thing else is a want.

We chase accumulating more electronic bits($) because we are monkey at our core. I want to have this because I see other monkey chasing it.

In my mind, someone working a low-stress, low paying job who doesn't compare himself to others is way ahead of us other monkeys chasing electronic bits.

People in Bhutan are/were happy people. They don't even have $ or 2 saved. But once they saw other countries on TV, they wanted to chase the same thing as well. And misery will spread there as well.

Simpler life is happier life. We are only making it complicated, day by day!

We also "need" a smartphone and a $7 cappuccino.

 

[Calico]

To accept that would force us to admit we'd had some advantage beyond our own industrious attitude and superior work ethic. Why embrace that when we can slap ourselves on the back instead and look down on the under achievers?

+1000

 

[jollystomper]

People can still succeed these days, but it is harder. We can point out that the kids are drinking expensive coffee and are paying too much for their phones, but the inflationary costs for the big ticket expenses of college education and housing and health insurance are a reality. When I went to the state university for my undergrad (ok, 4 decades ago), tuition and fees were a hair under $1K. It is now approaching $16K. I realize the then-year dollar versus current-year, but realistically, the starting salary of $25K 40 years ago isn't $400K today).

Using an inflation calculator and other data, I often compare what it was like for starting out after graduating from college in 1979 vs. today.

Then: Tuition + Room and Board at my Ivy League school: $6,000. Now: $76,000. Note that if that had risen at the same rate of inflation, the current cost would be around $22,000.

Then: 20.4% of males and 12.9% of females in the U.S. had college degrees. Now: 35.4% of males and 36.6% of females have college degrees. (source: https://www.statista.com/statistics...nment-of-college-diploma-or-higher-by-gender/). Having a degree does not set you apart from the crowd as much as it did back then.

Then: my loan burden from college was $4,000 for all 4 years. DW's was $10,000 for all for years. Now: a single year of college can burden you with a log more than that. And more people are taking more than 4 years to graduate.

Then: my starting salary was 16,500, for a "technical professional" job. Now: The equivalent starting salary would be about $60,200. DW, who started full time work in 1983 as an administrative assistant, earned $12,000. today that would be the equivalent of $32,000.

Then: my first apartment (1 bedroom with closet, kitchen, dining area, living room, large walk-in clost that I used as a study was I believe $300/month, and 4 years later when I moved out to buy a condo it was still less than $350/month. Now: The rent based on inflation would be $1,100 a month. Interestingly, the apartment complex still exists, and my apartment is renting for $900/month. Of course, in large cities, rent has outpaced in inflation.

Then: my first car in 1979 was a 1975 Ford Pinto (the "bombmobile" I called it, due to the exploding gas tank feature). I (over) paid $3,000 for it. Now: That would be paying $11,000 for a car.

Then: I paid $0 for health insurance, and any related health insurance costs were reasonable. I had a appendectomy in the early 80s and I think the total bill (which Megacorp completely covered) which included a 5 day stay in the hospital was maybe $1,000. Now: based on inflation that would be about $3,700. But of course those costs have risen much faster than inflation,. I have seen cost estimates of $10,000-$35,000.

Competition is clearly tougher. My school accepted slightly less than 1 in 10 applicants, now it accepts 1 in 14. More jobs are requiring college and advanced degrees. You are now competing nationwide and worldwide for jobs - back in 1979 no one was thinking about jobs moving overseas or skilled workers coming from overseas (a good thing). Women are more prevalent in the workforce (again a good thing). On the other hand, one has many more options (though some options clearly pay better than others).

These comparison are just interesting to me, I am not to making a point other than the phrase "it depends" may be the best general answer to the question of if starting out today is easier .

 

[Finance Dave]

I do believe anyone can do it, although it will be more difficult for some than others. In some ways, things are "harder" today. In other ways, things are easier.

Just a few "young" people today disadvantages:
1) Don't reach FRA until 67...and perhaps it will be raised to even higher in the near future at least for the younger folks
2) College costs are out of hand
3) Unskilled job pay has not kept up with inflation
4) The "old style" pensions from companies are largely gone

But there are some advantages:
1) New "cash balance" pensions are "mobile"...allowing workers freedom to move without losing their pension
2) "Forced" savings in 401k plans (auto enroll) has gotten people started saving earlier
3) Inflation has been relatively low for a long time now
4) Some legislative changes have favored the worker, such as family leave act, ability to stay on parents insurance until later age, gov't subsidized health care, etc.
5) Advances in medicine mean better quality of life, for a longer period (although this causes you to have to save more to fund the longer life)

I think a large part of the problem has already been mentioned by many on here...and that is that people "expect" things today or see them as "required" when they are really luxuries. A few examples:

1) My grandparents had a garage door opener, it was called their left arm

2) Being able to carry a phone around with you wherever you go? unheard of in those days...but we "need" this service now

3) used to be that 3 TV channels was sufficient...but people today can't live without 400 channels, on-demand movies, and so on

4) Today our kitchens have numerous ways to cook things such as ovens, microwaves, griddles, hot air cookers, etc. None of those are "necessary"...people lived just fine without them only 60 years ago

5) When I was growing up, my dad asked us "ok kids, we have a certain amount of money this year we can spend on something, and I'll give you two choices. We can either get a small above-ground pool in the backyard, or central air conditioning for the house...which do you like better". Today, I don't know if you can find a new house (depending on climate of course) that doesn't come with central air...at least not where I live in Indiana.

 

[pjigar]

Median household income in the US was $68k last year. If your average income, adjusted for inflation, was above that for your entire career, you were not “lower” middle class, but substantially above that.

Partly true but remember, income grow is non-linear. Biggest pay raises comes mid-career.

 

[Time2]

I think a large part of the problem has already been mentioned by many on here...and that is that people "expect" things today or see them as "required" when they are really luxuries. A few examples:

1) My grandparents had a garage door opener, it was called their left arm

2) Being able to carry a phone around with you wherever you go? unheard of in those days...but we "need" this service now

3) used to be that 3 TV channels was sufficient...but people today can't live without 400 channels, on-demand movies, and so on

4) Today our kitchens have numerous ways to cook things such as ovens, microwaves, griddles, hot air cookers, etc. None of those are "necessary"...people lived just fine without them only 60 years ago

There are so many more consumer trinkets, big, small and digital to buy now. Imagine coming from a poor third world country and going into a Michael's or a Lowes or Walmart. You would have no idea what most of the stuff was or why you would need it.

 

[LRDave]

To accept that would force us to admit we'd had some advantage beyond our own industrious attitude and superior work ethic. Why embrace that when we can slap ourselves on the back instead and look down on the under achievers?

+1

 

[Blue531]

The average annual salary I have made over 38 years is around $30,000 or less. I have managed to become financially independent within 20 years time since I began investing. I do believe anyone can, but anyone won't. I read an article that said 46% of Americans make less than $30K. 58% make less than $40K. 67% make less than $50K. I don't think wages have kept up with the cost of living for the past 30 years and that is a large reason for people not having enough money, especially if they live in high cost areas.

Some don't make enough to live let alone invest. But, for those that do, I think there are several reasons why people just don't get ahead. When I look around at the people I've worked with and people I know, they don't control their money well. They spend, drive new cars, buy big homes if they can. They don't seem to know anything about their 401k. Consumerism and lack of financial literacy. Lack of desire to learn about money or investing. Many people think just having a large salary is the "be all, end all".

I see a lot of what I call "waste"--people spending away their retirement money, especially from those who do make good money for the area and have a spouse that does, too. I see it everywhere. And these people are saying they don't know how they are going to retire. I find that ironic. I live in a very low cost area and two people with better than average salaries could invest a bundle. But they won't.

Lots of excuses. The thing is most people will never have the discipline to save or invest a portion of their income no matter how much money they make because they don't care to use the basic habit of living within your means. Everyone I know just goes with the minimum of 5% because that is what the company match is in the 401k. Most want to live large and have everything they want. And they are certainly free to do so. How they deal with that when it comes time they wish to retire is one problem I'm glad I don't have.



t

 

[Time2]

Well said.
btw, are you single, if not did your spouse earn any money?

 

[ivinsfan]

Here is a start -
https://ncd.gov/newsroom/2017/disability-poverty-connection-2017-progress-report-release

Quick Report Takes:
People with disabilities live in poverty at more than twice the rate of people without disabilities.
People with disabilities make up approximately 12 percent of the U.S. working-age population; however, they account for more than half of those living in long-term poverty.
Currently, an estimated 228,600 people with intellectual/developmental disabilities and other significant disabilities work for subminimum wage.

On the last point if you are disabled and working at below minimum wage you very likely could enrolled in a government work life program where work experience is part of the whole package. You might get assistance in other areas of your life such as housing, food, health care ie... and when consider poverty stats, I don't believe government assistance in these areas is included in the number.

 

[daylatedollarshort]

I tend to read a sense of moral superiority in these threads.

Moral superiority on steroids, like a lack of consumerism and LBYMs are 100% of the issue, regardless of research studies with hard data on factors such as social mobility over time and compared to other developed countries, college costs, increasing health costs, number of poor with physical or emotional disabilities, racial and gender discrimination, decline of middle class jobs, etc.

Even in countries with the lowest social mobility scores, some people are going to get ahead despite the odds being stacked against them. A low social or educational mobility score doesn't mean it is impossible for anyone to get ahead. It means it has gotten harder over time to get ahead or perhaps it is harder than need be compared to other relatively wealthy countries.

What it seems like people here are saying is because I got ahead, I don't believe that research from our top universities into income and poverty with factors like hard data on decreasing social and education mobility scores over for the country as a whole matters. Or I don't want to believe any of it is true, even though few / maybe none of the research studies on income and poverty, show laziness as a top factor for a lack of success in America today.

 

[SmallCityDave]

Moral superiority on steroids, like a lack of consumerism and LBYMs are 100% of the issue, regardless of research studies with hard data on factors such as social mobility over time and compared to other developed countries, college costs, increasing health costs, number of poor with physical or emotional disabilities, racial and gender discrimination, decline of middle class jobs, etc.

Even in countries with the lowest social mobility scores, some people are going to get ahead despite the odds being stacked against them. A low social or educational mobility score doesn't mean it is impossible for anyone to get ahead. It means it has gotten harder over time to get ahead or perhaps it is harder than need be compared to other relatively wealthy countries.

What it seems like people here are saying is because I got ahead, I don't believe that research from our top universities into income and poverty with factors like hard data on decreasing social and education mobility scores over for the country as a whole matters. Or I don't want to believe any of it is true, even though few / maybe none of the research studies on income and poverty, show laziness as a top factor for a lack of success in America today.

Sounds like you guys should run for office...

 

[Blue531]

To Time2:

Yes I am single. Never been married. I did this on my own. I've lived by myself for the most part though I had a partner for awhile that earned money (not a lot) who helped to pay some of the living costs.

 

[Blue531]

My Dad was laid off in the early 80s during a recession. He went on disability after being diagnosed with cancer at the age of 54. My parents moved to an affordable rural area in the south and lived on his pension and disability. My Mom stopped working so they could enjoy his last years together. They lived very frugally.

I was laid off in 2003 when 80% (as far as I've read) of the manufacturing went overseas. And then the 2008-2009 huge drop in the market and housing bubble burst, there was hardly anyone hiring. Needless to say, the first decade of 21st century was not stellar. As I went thru hiring processes, there were at times over a hundred others applying for the same job or jobs. Times were not easy. What helped me thru those times? The fact that my expenses were low. Frugality.

We are all aware that wages have not kept up with the cost of living, that health insurance costs and rents are rising. Most anyone who has lived awhile has had to cope with that. People are being left behind because of so many low paying jobs. Companies cutting costs to increase profits for their shareholders. I don't think anyone here would discount the fact that a huge portion of low income are being left behind making it harder to get ahead. With that said, yes it is hard and harder for some for various reasons.

I see more job openings now in my paper than I've seen since I got laid off in 2003. We go through difficult times in this country, that is nothing new. The 1990s were a boom. The 2000's were a bust. Recessions come and recessions go. Hard times come and hard times go. Most of us have probably experienced some of those. Not discounting the current hard times Are these times harder than any other hard time before? That's debatable, obviously. But for those not in hard times...anyone one of you can.

I'll remain frugal and live below my means and why? Because although times may not be hard for me now, I'm well aware that times may not always be good. The market and economy fluctuate through good and bad times. We go thru recessions, wars, real estate busts, inflation, good job years and bad job years, etc. Best to be prepared.

 

[Gumby]

And so ends the latest installment of this never-ending discussion. Thanks to all who made positive contributions.