Inflation >4% in Latest report!

[Calico]

That's an interesting perspective given the delta between things like median incomes and home prices, wages and productivity. But sure, Flieger, it was hard back then too. Just not as hard as today.

And so sayeth every generation - ever - since time immemorial.

 

[Flieger]

From 2025 (essentially 18 months now), my total WD has been ~8%, while my portfolio decreased ~2%.

Flieger

 

[Koolau]

From 2025 (essentially 18 months now), my total WD has been ~8%, while my portfolio decreased ~2%.

Flieger

If you're like me, that means you dare not live past 105!

 

[marko]

From 2025 (essentially 18 months now), my total WD has been ~8%, while my portfolio decreased ~2%.

Flieger

An interesting data point!

Made me look. My 2 year average WD is 6.7%, my portfolio has increased 3.8% net.

For the past 20 years (I do track my annual net) the numbers have been similar with a few exceptions.

 

[sengsational]

I probably shouldn't comment about my perspective on inflation, but I didn't see it mentioned above.

Once a year I look at spending, and it's noisy enough that it's hard to tell what's really going on. I don't have the patience to tease it apart and get any definite results. For instance, is dinner out up because we went out more or went to higher end places more often? Not going there.

Inflation will hit most others much harder than it hits us, and probably most of us here. My heart goes out to those that are going to have real trouble with it. I wish them well.

 

[Gumby]

And so sayeth every generation - ever - since time immemorial.

I think what these generational comparisons seem to miss is that a whole generation of people are not the same. In every generation, there are people who grow up in poverty, with lazy, alcoholic, abusive parents, attending poor schools, intermittently at best, and who have no hope of higher education. Simultaneously in every generation, there are people who grow up with intelligent, hard working, attentive parents who are able to live in the best school districts, give them a better material standard of life, and pay for and get them into a college that will set them up for adult success. Do some in the first group overcome the obstacles and succeed despite the odds? Yes. Do some in the second group fail despite their advantages? Again, yes. It has always been this way and it probably will always be this way.

A very large number of people on this board now live upper middle class lives. Some of us grew up in that milieu and see things as fairly constant. Others, including me, succeeded despite some substantial early obstacles, but we may look around at our nice neighborhoods and conclude that life is easier now. And it is for us, but not for everyone. That's why our personal anecdotes are not data.

I think the most we can rationally deduce from the actual data we have is that there is a widening gap between the upper and lower classes, with fewer falling in the middle. We have data showing that the economic benefits from increasing productivity over the course of the last 45 years has mostly flowed to capital and not to labor.

But, over the same time, there have been momentous gains in technology, in transportation, in communication, and in medicine that have improved life for every one of us, no matter where we fall on the income scale. We all, even the poor, live longer and healthier lives, with much more day to day convenience, than our parents lived.

 

[Fermion]

^^^ Thats only if you still drive an ICE car.

My automotive fuel cost was $0.00 for 2025. What was yours?

My entire electric bill for 2025 was $125. What was yours?

The $10,000 I saved buying a ICE vehicle instead of electric I put into memory stocks and it is now $30,000. At $5 a gallon that money will power my truck 144,000 miles. Opportunity cost is real.

 

[latexman]

From 2025 (essentially 18 months now), my total WD has been ~8%, while my portfolio decreased ~2%.

Do you have income streams kicking in downstream?

 

[Mr. Tightwad]

The $10,000 I saved buying a ICE vehicle instead of electric I put into memory stocks and it is now $30,000. At $5 a gallon that money will power my truck 144,000 miles. Opportunity cost is real.

The investment could have gone down, would you still be posting about it in this discussion? Just because a few weeks ago I won $60 on a lottery ticket doesn't mean lottery tickets are a superior choice to purchase, now does it?

As for your vehicle, you left out purchase prices.

I paid $30,800 for a new Model 3 in 2/2025. If your vehicle was less, then you paid less. Add back in all the maintenance costs, oil changes, and fuel you'll be buying that I won't be paying for.

 

[Fermion]

The investment could have gone down, would you still be posting about it in this discussion? Just because a few weeks ago I won $60 on a lottery ticket doesn't mean lottery tickets are a superior choice to purchase, now does it?

As for your vehicle, you left out purchase prices.

I paid $30,800 for a new Model 3 in 2/2025. If your vehicle was less, then you paid less. Add back in all the maintenance costs, oil changes, and fuel you'll be buying that I won't be paying for.

agree that the investment could have gone down but also would you be posting this if your model three had not had the $7500 discount? My truck was $30,000 new but that was in 2017.

Today a model 3 is about $39,000 new and has no discounts. A Toyota Camry is $30,000 new (also with not much discount). That $9,000 buys 1800 gallons of gasoline at $5 a gallon and the Camry gets 50mpg. So break even is at 90,000 miles. For us that would be at least a decade of driving.

 

[Mr. Tightwad]

agree that the investment could have gone down but also would you be posting this if your model three had not had the $7500 discount? My truck was $30,000 new but that was in 2017.

Without the $7500 I would have paid $38,300.

Either way, enjoy your vehicle and I hope your memory stocks keep going up.

 

[Fermion]

Without the $7500 I would have paid $38,300.

Either way, enjoy your vehicle and I hope your memory stocks keep going up.

I sold them recently. I am not anti electric vehicle but I think people make up figures when trying to justify the benefits of not buying gasoline, especially in this post subsidy world.

 

[Mr. Tightwad]

I sold them recently. I am not anti electric vehicle but I think people make up figures when trying to justify the benefits of not buying gasoline, especially in this post subsidy world.

Here are my figures for automobile fuel expenses from 2018-2026:

Absolutely zero.

And not a made up figure.

 

[Montecfo]

I think the most we can rationally deduce from the actual data we have is that there is a widening gap between the upper and lower classes, with fewer falling in the middle.

Any evidence you wish to cite?

We have data showing that the economic benefits from increasing productivity over the course of the last 45 years has mostly flowed to capital and not to labor.

Do you think this is new?

 

[anethum]

Young kids today aren't having trouble affording things we had at our age, they are having trouble affording things that they want at this age. If they were willing to settle for the same house of the same age we had to start, they wouldn't have any problems, but they won't. They want it all, they want it now, they don't want to wait, save, scrimp or sacrifice. They don't want a car that'll get them to work they want a new car that cost today more than my first HUMBLE house cost.

I received my first university degree in 1976. Tuition at my school has since increased 2800%. I bought my first and only home in the 1980s. I still live there and its value has increased 900% in my HCOL area. Healthcare costs and health insurance costs have increased far in excess of the official cost of living increase. Pensions have disappeared for vitually all American workers in the private sector.

If I were starting out now, there is no way I could graduate from university without massive debt, and no way I would ever be able to buy the home I currently own.

 

[anethum]

Any evidence you wish to cite?


Do you think this is new?

The State of the American Middle Class

As the financial divide has grown, a smaller share of Americans now live in middle-class households. Here are key facts about this group.

www.pewresearch.org

"The share of Americans who are in the middle class is smaller than it used to be. In 1971, 61% of Americans lived in middle-class households. By 2023, the share had fallen to 51%, according to a new Pew Research Center analysis of government data."

"As a result, Americans are more apart than before financially. From 1971 to 2023, the share of Americans who live in lower-income households increased from 27% to 30%, and the share in upper-income households increased from 11% to 19%."

 

[G-Money]

And so sayeth every generation - ever - since time immemorial.

The fallacy here is that I'm not part of the young generation. MySpace has turned into MyChart. I'm older and I believe the younger generation has it harder.

 

[G-Money]

The $10,000 I saved buying a ICE vehicle instead of electric I put into memory stocks and it is now $30,000. At $5 a gallon that money will power my truck 144,000 miles. Opportunity cost is real.

I can win the argument by riding a bicycle instead of owning a car. These "savings" anecdotes are subjective and completely situational. I can go out and buy a $10k EV Chevy Bolt or a used ICE Cadillac Escalade for $100k. Where are the savings now?

What I predicted is coming true. Used Teslas have reached both ubiquity and affordium. They're appearing on buy-here, pay-here car lots. They're running to 200k without issue. People needing cheap and efficient and reliable second-hand transportation which generally isn't going to leave them with a $500/month gas bill or "replace the transmission vs declaring BK" decisions are buying them in droves. They're fast, they look good, they have a lot of comfort and safety, and they need minimal maintenance. It's also terrifying that cars with such performance are now driven by genpop.

This. Is how. Mass EV adoption. Will Happen. ICE won't disappear for a long time, but this is how it will happen.

How does this relate to the topic at hand, well, it's one way in which generations are changing the tide, and geopolitical issues around fossil energy have now been responsible for wild inflationary periods and conflict and the truth is we don't need to use so much oil for just basic passenger transport. Nations who wean themselves will win the game.

 

[Gumby]

The State of the American Middle Class

As the financial divide has grown, a smaller share of Americans now live in middle-class households. Here are key facts about this group.

www.pewresearch.org

"The share of Americans who are in the middle class is smaller than it used to be. In 1971, 61% of Americans lived in middle-class households. By 2023, the share had fallen to 51%, according to a new Pew Research Center analysis of government data."

"As a result, Americans are more apart than before financially. From 1971 to 2023, the share of Americans who live in lower-income households increased from 27% to 30%, and the share in upper-income households increased from 11% to 19%."

Thanks for the assist. Here is some data regarding the change in productivity over time versus compensation.

Source:

Loading…

www.epi.org

 

[Montecfo]

The State of the American Middle Class

As the financial divide has grown, a smaller share of Americans now live in middle-class households. Here are key facts about this group.

www.pewresearch.org

"The share of Americans who are in the middle class is smaller than it used to be. In 1971, 61% of Americans lived in middle-class households. By 2023, the share had fallen to 51%, according to a new Pew Research Center analysis of government data."

"As a result, Americans are more apart than before financially. From 1971 to 2023, the share of Americans who live in lower-income households increased from 27% to 30%, and the share in upper-income households increased from 11% to 19%."

But if you simply look at the graph in the article you linked, the most profound change is people moving from middle to upper class.

That says the primary reason for the shrinking middle class is the growing upper middle and upper class.

The actual driver of the rather modest growth of the lower class appears to be immigration which has grown dramatically over the time horizon studied.

The other major demographic shift is for rise in single parenthood.

Also, the article ignores the impact of large and growing transfer payments received by the lower class, which benefit them but is not " income" as they define it.

 

[G POP]

I received my first university degree in 1976. Tuition at my school has since increased 2800%. I bought my first and only home in the 1980s. I still live there and its value has increased 900% in my HCOL area. Healthcare costs and health insurance costs have increased far in excess of the official cost of living increase. Pensions have disappeared for vitually all American workers in the private sector.

If I were starting out now, there is no way I could graduate from university without massive debt, and no way I would ever be able to buy the home I currently own.

Covered in other threads, college education does not have to be expensive. It can actually be free and/or you can profit from it. Not everyone of course but many qualify. Who? Well, athletes #1. I officiate HS and college baseball and volleyball. Even lower level D3 and JUCO athletes receive benefits. #2. Employees at some companies. Many entry level positions offer tuition assistance or free college. #3. Military. ROTC programs and military reserves. Vast majority of military jobs are non combat arms. #4. Union schools and maritime schools. So,so many ways to get education w/out high student debt.

A bit tougher regarding home ownership. I do know of a young married couple (26 years old) living very cheaply in a nice 5th wheel (no truck) on a friend’s property.

If young people want to go the old school route of a 4 year college and pay full fair, of course that route is expensive.
So many other ways to get there.

 

[Aerides]

If young people want to go the old school route of a 4 year college and pay full fair, of course that route is expensive.
So many other ways to get there.

All those other ways (athlete, ROTC, scholarships etc.) were always there. But for the B+ non-athlete student who just wants to get a degree, it's harder than it was.

When I was going to college in the late 80's, an Ivy League expensive 4 year was about $15k all in. That's about $43k in today's dollars. Other schools ranged from $5-12, of course state and being cheaper.

So, a range of $5k to 15k. Not hard to make $5k in summer and part time jobs even then. If that were just moved for inflation it would be $15k - $43k. Most kids needing the money could - today - find their way to $15k if they had to pay for it all.

However, today the real price is $90-$100 for the ivies. $30k for state schools.

So, now a range $30k-$90k. Education has outpaced inflation over that 40 year period by double. I don't know many 18 year olds who could finance $30k per year on a summer job and part time stuff.

 

[Mr. Tightwad]

A bit tougher regarding home ownership.

When I bought the 4 bedroom home I'm living in now (back in my 20's before kids), I got 3 roommates to occupy 3 of the bedrooms. All people I knew.

Mortgage was $1707.
Rent collected was $1700.

I gleefully paid my $7 share of the mortgage to the bank every month.

I stopped having roommates after a bit, as I didn't need their $.

The home has increased in value by 1.3M.

 

[anethum]

But if you simply look at the graph in the article you linked, the most profound change is people moving from middle to upper class.

That says the primary reason for the shrinking middle class is the growing upper middle and upper class.

The actual driver of the rather modest growth of the lower class appears to be immigration which has grown dramatically over the time horizon studied.

The other major demographic shift is for rise in single parenthood.

Also, the article ignores the impact of large and growing transfer payments received by the lower class, which benefit them but is not " income" as they define it.

You ignored the growing poverty rate, which has only gotten worse since 2023, There are now more Americans without health insurance than in 2023. The concentration of wealth keeps worsening every year. There is now routine talk about the K-shaped economy. The budget deficit has gotten worse, and government debt has exploded since 2023. Inflation is now increasing every month.

I don't see how anyone can reasonably say that things are getting better overall.

 

[NW-Bound]

SRP seems to be awash in solar power from 8am to 3pm. They send me emails all the time trying to get me to switch to one of the new plans, the TOU plans with the high prices at 6-9pm or 5-10pm (this plan with a demand charge) but I am going to hold on to my EZ-3 plan (high prices from 3-6pm) as long as I can. I don't mind setting the AC up from 3-6 but I don't want to swelter at dinner time and just before bed time. Don't get me wrong, I understand why they have the new rates and SRP is, by far, the most reliable utility of any place I have lived. Eventually I guess I will have to get battery storage to take advantage of all the cheap solar.

So is California in spring and early summer when the solar power production is high, yet people are not using their AC. Unlike solar farms run by utilities that can be turned off when not needed, residential grid-tied solar installations keep pumping into the grid whether there's demand for it or not.

LA Times reported that California had to pay Arizona occasionally to take some power in order to balance the grid. Neither side talked about it, but it was reported the amount came to millions of dollars.

Even here in Arizona, a few years ago there was a report of an APS - another utility company in AZ - having a small battery installation on fire in Wickenburg. It was reported that APS built that in order to have a place to store excess energy generated by residential installations, which must be widespread there because homes there had large lots.

In the metropolitan Phoenix, I also read of a small battery installation by SRP in Gilbert or some outskirt towns also catching fire. It looks like utilities were experimenting with a distributed battery storage scheme. This can help balancing out the load on the transmission line and generation capacity. I am helping doing the same thing with my own installation.