Net Worth at age 55

[JOHNBROCHILL]

Life is not fair. I accept the bad breaks and move on. I take the good breaks and maximize it. My 3 kids are in private school and never sniffed public for the past 12 yrs. I paid well over 100K/yr in property tax on my properties with most going to educating other people's kids. That is a big "life is not fair" for me.

Everyone is feeling the affects of inflation. Its a combination of increasing costs and also increasing consumerism.

When our grandparents were getting out of college, they did not have expenses that most current college grads expect. Big house, New car, internet, cell phone, uber eats, food delivery, exotic travels, sporting events, the amazon consumerism tax, smart phones, laptop for everyone. So yea, income overall has outpaced inflation BUT we live in a different world. If we had the same expenses as our grandparents, we all would feel rich.

Even docs would be living in 2K sqft home, have 2 cars. If I had what most docs had 40 yrs ago with my income, I would be better off than them. But we have increased in consumerism and its an expected life expense for docs.

If your doc friend's kids are in club sports and private lessons, its hard to tell your kid that they can't have those experiences/advantages if you can afford it.

Yeah no one forced you to put your kids in private school. No one forced you to buy an expensive home in an expensive area that requires 100k/yr property taxes. Everyone in society benefits from a well educated population which requires public schools. Some "life is not fair" is going to be 100% your own decisions.

I believe the current "life is not fair" are
1. Student loans
2. Medical bills
3. Housing costs
4. Child care costs

These 4 things are out of control in this country and I don't see any of it changing until one of these systems implodes. (My bet is healthcare first although student loans is a close runner up).

These things can easily eat an entire budget. Some 21 year olds will get their first apartment and very quickly realize they can't buy lattes every day, can't order uber eats 3x/week, cant afford fancy (or even any) vacations, can't get the latest iphone, or buy concert tickets. I bet there are many docs who will be funding their kids lifestyles throughout their 20s. I just hope it's not me, but it's tough to model good behavior. I already did the whole delayed gratification thing and I like paying for convenience and nice things now.

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[Splenda88]

According to many here, inflation is a myth, or at worst, a minor inconvenience. Apparently, the economy is the best it’s ever been. Most on this site have seen their income double, triple, or even quadruple to account for that pesky, dare I say trivial, 19-20% inflation. Dummy me, I invested in TVs and have lost my shirt on them, as the prices continue to plummet.

No one here says it's a myth, but for people whose net worth have increased by > 50% (and already own homes at 2-4% interest rate), which is almost all of us here, yes it is a minor inconvenience.

Some are making it political Trump vs Biden when both of them (and covid) have contributed to it.

All my friends/families who are in the lower middle class (even middle class) told me they gonna vote for Trump because he gave them money during covid. Lol. You can't make that stuff up.

 

[Splenda88]

Biden’s economy vs. Trump’s, in 12 charts​

https://www.washingtonpost.com/business/2023/12/23/trump-biden-us-economy-compared/

 

[aneftp]

Fortunately for us. The locums market is hot if you are willing to travel 30 miles outside of big cities metro areas.

For me. Why travel downtown 20 min away (could be 30 min with traffic) and make $300-hr

When I can make $400/hr traveling 40 miles /40 minutes.

 

[rowsdower88]

According to many here, inflation is a myth, or at worst, a minor inconvenience. Apparently, the economy is the best it’s ever been. Most on this site have seen their income double, triple, or even quadruple to account for that pesky, dare I say trivial, 19-20% inflation. Dummy me, I invested in TVs and have lost my shirt on them, as the prices continue to plummet.

Low unemployment. Real wages outpacing inflation (especially low income). Markedly increasing GDP. Stock market all time highs. There's a lot of doomers on here, but I would say the economy is doing pretty well. If inflation is the only metric that matters to you, sure you can be a doomer. Perceptions of how the economy is doing are entirely media driven which always leads me to wonder what programs are on in the doctor's lounges - and of course, who benefits from everyone having distorted views of the economy.

 

[Splenda88]

Low unemployment. Real wages outpacing inflation (especially low income). Markedly increasing GDP. Stock market all time highs. There's a lot of doomers on here, but I would say the economy is doing pretty well. If inflation is the only metric that matters to you, sure you can be a doomer. Perceptions of how the economy is doing are entirely media driven which always leads me to wonder what programs are on in the doctor's lounges - and of course, who benefits from everyone having distorted views of the economy.

I believe inflation is likely higher than what the government has reported. However, the people in the asset class (like rich anesthesiologists) are not affected by inflation.

 

[MirrorTodd]

Makes me wish I'd cut off my kids the day they started college.

My daughter is in grad school now. She's taking out loans just in case there's some grossly expanded forgiveness program coming. If not, I'll pay them off.

I joined the military to avoid loans.

So it goes.


My primary objection to loan forgiveness isn't so much jealous sour grapes, but the obvious elephant in the room - it does NOTHING to fix the root problems of

1) spiraling tuition/fees because kids get blank check loans

2) kids getting blank check loans


Either fund colleges with tax dollars, or don't. Don't throw money at the problem in a way that is going to make it worse.

That just sounds like you're coddling your kids dude. If your daughter is gonna lay in the loan bed, then she has gotta make it. She's never gonna grow up if she has daddy to pay off all her debt for her (obviously correlating with the government handout plan she has).

 

[rowsdower88]

I believe inflation is likely higher than what the government is reported.

How did you arrive at this belief/vibe?

 

[pgg]

That just sounds like you're coddling your kids dude. If your daughter is gonna lay in the loan bed, then she has gotta make it. She's never gonna grow up if she has daddy to pay off all her debt for her (obviously correlating with the government handout plan she has).

Coddling? C'mon.

I told her since she was in high school I'd pay for her university and grad school.

She's only taking loans now because I'm looking to game the government for some forgiveness. If it pans out, hey free money.

 

[GassYous]

Coddling? C'mon.

I told her since she was in high school I'd pay for her university and grad school.

She's only taking loans now because I'm looking to game the government for some forgiveness. If it pans out, hey free money.

How is it free money? She will paying it off for 10 years before it gets "forgiven". at 7% interest, it's not exactly like she's just being handed a blank check unlike Medicare and Social Security where people who put little to nothing in the system got full benefits off the backs of the productive.

 

[finalpsychyear]

How did you arrive at this belief/vibe?

The government is always honest with its citizens so not sure what they are talking about.

 

[rowsdower88]

The government is always honest with its citizens so not sure what they are talking about.

If you want to be skeptical of government reports and data collection, fine. But at least have a reason for it other than vibes. He/she COULD make an argument that looking at CPI is undercounting inflation for x, y, z reasons and we should be focusing on the personal consumption expenditures index or another tool we use to assess inflation.

If you don't have reasons (ideally evidence) for your skepticism, there's nothing separating you from someone who thinks the government faked the moon landing.

 

[triggermaster]

If you want to be skeptical of government reports and data collection, fine. But at least have a reason for it other than vibes. He/she COULD make an argument that looking at CPI is undercounting inflation for x, y, z reasons and we should be focusing on the personal consumption expenditures index or another tool we use to assess inflation.

If you don't have reasons (ideally evidence) for your skepticism, there's nothing separating you from someone who thinks the government faked the moon landing.

You don’t need a research report to know that your kids’ chicken finger combo cost 8.50 in 2018 and costs $14 now and that each chicken finger is 50% smaller. It also doesn’t make you on conspiracy theorist to notice the dramatic increase.

 

[pgg]

How is it free money? She will paying it off for 10 years before it gets "forgiven". at 7% interest, it's not exactly like she's just being handed a blank check unlike Medicare and Social Security where people who put little to nothing in the system got full benefits off the backs of the productive.

We're not going to let it go for 10 years if there's nothing coming. Its an election year. I think we'll know in a few months what the future of loan forgiveness looks like.

I'll most likely pay it off in a year or so. But, I do want to give the government a chance to do something irresponsible in my favor.

 

[rowsdower88]

You don’t need a research report to know that your kids’ chicken finger combo cost 8.50 in 2018 and costs $14 now and that each chicken finger is 50% smaller. It also doesn’t make you on conspiracy theorist to notice the dramatic increase.

No one is doubting inflation is occurring. If you read above, you'll see that "splenda" was making the specific claim that the government was undercounting inflation with the further conclusion that real wages are not higher today than 2019 - especially for lower income Americans. The claim that the government is undercounting inflation should be backed up by evidence (Is it deliberate malfeasance by the actuarial civil service to make the Biden administration look better? Because that's the implication. Or is there a reason that the government is misrepresenting the data and an alternative measurement index would be more appropriate?)

If you read further back, there are multiple sources cited attesting to these real wage increases.

 

[Dr. Rude]

No one is doubting inflation is occurring. If you read above, you'll see that "splenda" was making the specific claim that the government was undercounting inflation with the further conclusion that real wages are not higher today than 2019 - especially for lower income Americans. The claim that the government is undercounting inflation should be backed up by evidence (Is it deliberate malfeasance by the actuarial civil service to make the Biden administration look better? Because that's the implication. Or is there a reason that the government is misrepresenting the data and an alternative measurement index would be more appropriate?)

If you read further back, there are multiple sources cited attesting to these real wage increases.

Compared with 30 years ago:

Low skill living wage jobs are harder to come by.
The cost of housing, child rearing, education is staggering.
One only needed do a few thing a few things right to have a decent life- Graduate high school, be willing to work, not abuse drugs or alcohol and, not have child out of wedlock. That barely gets you in the game today.

 

[BLADEMDA]

Compared with 30 years ago:

Low skill living wage jobs are harder to come by.
The cost of housing, child rearing, education is staggering.
One only needed do a few thing a few things right to have a decent life- Graduate high school, be willing to work, not abuse drugs or alcohol and, not have child out of wedlock. That barely gets you in the game today.

College degree isn't worth as much today as in the past. It's a stepping stone to an advanced degree or a career in Tech/Software.
For those seeking a decent income without a degree the demand is quite high for the trades like welding, a/c, plumbing, electrical, etc.
Those types of jobs pay over $100,000 like welding and EV repair. My German private auto repair shop is $150 per hour now for labor.

Work Ethic Scholarships

Ready to get to work? Learn more about the mikeroweWORKS Foundation Work Ethic Scholarship Program.

mikeroweworks.org

 

[rowsdower88]

Compared with 30 years ago:

Low skill living wage jobs are harder to come by.
The cost of housing, child rearing, education is staggering.
One only needed do a few thing a few things right to have a decent life- Graduate high school, be willing to work, not abuse drugs or alcohol and, not have child out of wedlock. That barely gets you in the game today.

So many negative nancies on this forum with amorphous beliefs that life was better 30-60 years ago.

Costs have increased. Yes. But the kids are alright. Average wealth per capita among millenials is in line with previous generations (inflation adjusted) and despite rising college, childcare and rent costs. Millenials are doing OK! Crime is way down from the 90's, unemployment is down from most of the 90's, and way more people are college educated (I think this is a good thing, but others are free to disagree). I think that the idea that a high prevalence of low skill jobs equates to a better situation for most people in an economy is weird. People want to be wealthier and generally getting a college degree results in you becoming wealthier, that's not a bad thing. I want my high school aged neighbor to feel like he should go for that philosophy degree because:
1. Studying philosophy is cool.
2. Philosophy degrees actually pay off well in the long run.
3. Philosophy Degree holders are less likely to commit crimes.
4. I might really enjoy reading a good philosophy paper he puts out.
(Replace philosophy with most other degrees and you'll arrive at similar conclusions with some exceptions.)

Who is the Wealthiest Generation?

Have you seen this chart? I have seen it many times. It comes from this Washington Post article, but it seems to go viral on Twitter about every 6 months or so. The implication of the chart seems t…

economistwritingeveryday.com

Will there be a Millennial Big Chill?

Millennials are finally doing OK economically. Will their politics moderate?

substack.com

Great news about American wealth

Regular Americans are getting richer.

www.noahpinion.blog

Philosophy Majors Make More Money Than Majors in any other Humanities Field - Daily Nous

Among those with bachelors degrees, the median earnings of those who majored in philosophy exceed those of majors in any other humanities field, and are the 16th highest in a study comparing salaries across 50 majors in the United States. These conclusions are based on data collected by PayScale...

dailynous.com

(Blog posts aren't my preferred method of citation, but each post cites the data and IMO provides relevant analysis.)

 

[Splenda88]

How did you arrive at this belief/vibe?

I just don't trust our government regardless which party is in the white house.

 

[rowsdower88]

I just don't trust our government regardless which party is the white house.

Fair enough

Edit: I don't think that level of skepticism is warranted. We trust quite a few administrative departments to do millions of things everyday that go unnoticed (IRS handling our taxes, CDCstaying up to date on diseases, Department of Defense, Department of Education...). I think generally skepticism about government reports should be supported by evidence for that skepticism to be warranted.

 

[Dr. Rude]

So many negative nancies on this forum with amorphous beliefs that life was better 30-60 years ago.

Costs have increased. Yes. But the kids are alright. Average wealth per capita among millenials is in line with previous generations (inflation adjusted) and despite rising college, childcare and rent costs. Millenials are doing OK! Crime is way down from the 90's, unemployment is down from most of the 90's, and way more people are college educated (I think this is a good thing, but others are free to disagree). I think that the idea that a high prevalence of low skill jobs equates to a better situation for most people in an economy is weird. People want to be wealthier and generally getting a college degree results in you becoming wealthier, that's not a bad thing. I want my high school aged neighbor to feel like he should go for that philosophy degree because:
1. Studying philosophy is cool.
2. Philosophy degrees actually pay off well in the long run.
3. Philosophy Degree holders are less likely to commit crimes.
4. I might really enjoy reading a good philosophy paper he puts out.
(Replace philosophy with most other degrees and you'll arrive at similar conclusions with some exceptions.)

Who is the Wealthiest Generation?

Have you seen this chart? I have seen it many times. It comes from this Washington Post article, but it seems to go viral on Twitter about every 6 months or so. The implication of the chart seems t…

economistwritingeveryday.com

Will there be a Millennial Big Chill?

Millennials are finally doing OK economically. Will their politics moderate?

substack.com

Great news about American wealth

Regular Americans are getting richer.

www.noahpinion.blog

Philosophy Majors Make More Money Than Majors in any other Humanities Field - Daily Nous

Among those with bachelors degrees, the median earnings of those who majored in philosophy exceed those of majors in any other humanities field, and are the 16th highest in a study comparing salaries across 50 majors in the United States. These conclusions are based on data collected by PayScale...

dailynous.com

(Blog posts aren't my preferred method of citation, but each post cites the data and IMO provides relevant analysis.)

 

[rowsdower88]

He's a glass half empty guy. I wholeheartedly agree with some of his points on housing and deaths of despair, I think reducing certain zoning/construction/environmental regulations would be beneficial in the long run. We need to build more. But I would push back on his condemnation of social security. It's responsible for keeping millions of seniors out of poverty and I'm not sure if means testing it is cost effective or terribly beneficial... but I could be persuaded. And even his arguments on housing are a little weird. For example, while housing costs have gone up dramatically, roughly 48% of millennials and gen z own homes compared to boomers/gen x at 50% (age adjusted). Is millennial homeownership that serious a problem? If there's a particular issue you feel like exemplifies his argument that we're "destroying young people's future", then we can focus on that.

The Race to Homeownership: Gen Z Tracking Ahead of Their Parents’ Generation, Millennials Tracking Behind

30% of 25-year olds owned their home in 2022, higher than the 27% rate for Gen Xers when they were the same age.

www.redfin.com

 

[triggermaster]

He's a glass half empty guy. I wholeheartedly agree with some of his points on housing and deaths of despair, I think reducing certain zoning/construction/environmental regulations would be beneficial in the long run. We need to build more. But I would push back on his condemnation of social security. It's responsible for keeping millions of seniors out of poverty and I'm not sure if means testing it is cost effective or terribly beneficial... but I could be persuaded. And even his arguments on housing are a little weird. For example, while housing costs have gone up dramatically, roughly 48% of millennials and gen z own homes compared to boomers/gen x at 50% (age adjusted). Is millennial homeownership that serious a problem? If there's a particular issue you feel like exemplifies his argument that we're "destroying young people's future", then we can focus on that.

The Race to Homeownership: Gen Z Tracking Ahead of Their Parents’ Generation, Millennials Tracking Behind

30% of 25-year olds owned their home in 2022, higher than the 27% rate for Gen Xers when they were the same age.

www.redfin.com

The national debt.

 

[rowsdower88]

The national debt.

The problem with saying the national debt is "destroying young people's future" is that it is entirely speculative. It's equivalent to saying the threat from nuclear war is "destroying young people's future". What I mean by that is: no one has currently suffered from paying back the national debt and in the future it is entirely unclear how much suffering will be required with paying it back.

This is not the case with problems like homelessness, unemployment, housing broadly, college tuition etc... We can point to people who have been harmed by those costs and based on that extrapolate on how current trends will affect the future. The same (arguably) cannot be said for the national debt.

An additional problem is the timeline for getting rid of the debt is entirely unclear. Is it a problem that will collapse the US economy in 1 year? A problem that requires relative austerity for 5 years? 10 years? 50? Will repayment affect primarily wealthy Americans or poor Americans? Will it affect primarily one sector of the economy more than others? How much will inflation reduce the impact of repayment? Will there be other mitigating or exacerbating effects?

One mitigating effect could be Biden's latest tax proposal. See sources (1) and (2). Would this entirely mitigate the threat from the national debt if enacted? Push it off a decade or two? Who knows? But the direct impact would be felt by the wealthiest (>$100 million net worth individuals) with subsequent (probably negative) impacts on those earning less.

(1) "President Joe Biden on March 11 sent Congress a fiscal year (FY) 2025 budget that proposes to increase taxes by nearly $5 trillion for corporations and for individuals with incomes above $400,000. Many of the president’s tax proposals -- including a proposal to increase the corporate tax rate to 28% and impose a 25% minimum tax on certain high-income individuals – were included in President Biden’s previous budgets. New tax proposals in the FY 2025 budget include measures to increase the recently enacted corporate alternative minimum tax rate from 15% to 21% and to deny business deductions for employee compensation above $1 million."

(2) "After accounting for all changes in revenue and spending, we estimate the net effect of the budget would be to reduce the deficit by nearly $2.2 trillion through 2034 on a conventional basis. On a dynamic basis, factoring in reduced tax revenues resulting from the smaller economy, the deficit reduction drops to $1.4 trillion."

If this was actually enacted (it won't be given the R-controlled House) this would absolutely reduce the national debt. If you believe the national debt is the existential threat to this country you say you do, a Biden and a D-controlled Congress has made reducing it a priority. There is no such commitment from Republicans. When measures like these tax increases are on the table (which in all fairness, they might not be even with a D trifecta... entirely possible they would renege on this plan) it's very hard for me to take seriously the threat of the national debt.

1. President Biden’s FY 2025 budget again calls for corporate and individual tax increases

2. President Biden’s FY 2025 Budget Proposal: Details & Analysis

 

[anonperson]

proposes to increase taxes by nearly $5 trillion for corporations and for individuals with incomes above $400,000

I pay enough taxes. I have no desire to pay more.

I'm guessing most other people who make more than $400k feel the same way.

 

[rowsdower88]

I pay enough taxes. I have no desire to pay more.

I'm guessing most other people who make more than $400k feel the same way.

-shrug-

Polling would suggest it's a popular proposal. It wouldn't be a big enough factor to change my vote one way or the other though. Paying taxes is a civic duty I'm happy to do. I would be in the 5% of upper income individuals who believe I pay "less than my fair share" according to this polling (62% of upper income Americans believe they pay "more than their fair share").

If you're concerned about the national debt, increasing taxes is a viable (and probably the best) way of resolving the issue. I don't see the Conservative desire to gut the Federal Government as good for either the economy or society broadly.

Top tax frustrations for Americans: The feeling that some corporations, wealthy people don’t pay fair share

61% of adults now say that the feeling that some corporations don’t pay their fair share bothers them a lot. 60% say this about some wealthy people.

www.pewresearch.org

 

[anonperson]

-shrug-

Polling would suggest it's a popular proposal. It wouldn't be a big enough factor to change my vote one way or the other though. Paying taxes is a civic duty I'm happy to do. I would be in the 5% of upper income individuals who believe I pay "less than my fair share" according to this polling (62% of upper income Americans believe they pay "more than their fair share").

Top tax frustrations for Americans: The feeling that some corporations, wealthy people don’t pay fair share

61% of adults now say that the feeling that some corporations don’t pay their fair share bothers them a lot. 60% say this about some wealthy people.

www.pewresearch.org

You and I both know that's only popular because people are all too happy to tax OTHER people. If there was a blanket tax increase on ALL people, I doubt there would be support for a tax increase.

Most normal people aren't really thrilled about paying more taxes.

And how are you going to post a BS study claiming that people "feel" the wealthy don"t pay their fair share of taxes. You keep squawking about objective data when trying to support that the current economy is fine but you post subjective junk like this?

The top 1% pay nearly half of the federal taxes. That has consistently increased over the last 20 plus years.

Summary of the Latest Federal Income Tax Data, 2024 Update

The Tax Cuts and Jobs Act (TCJA) made many significant, but temporary, changes to the individual income tax code to lower tax rates, widen brackets, increase the standard deduction and child tax credit, and more.

taxfoundation.org

A significant percent pay no taxes. Something like 40%. Of course they wouldn't mind if taxes increased.

 

[mentos]

Low unemployment. Real wages outpacing inflation (especially low income). Markedly increasing GDP. Stock market all time highs. There's a lot of doomers on here, but I would say the economy is doing pretty well. If inflation is the only metric that matters to you, sure you can be a doomer. Perceptions of how the economy is doing are entirely media driven which always leads me to wonder what programs are on in the doctor's lounges - and of course, who benefits from everyone having distorted views of the economy.

The economy is doing well for people in this thread, but 44% of Americans can't cover a $1,000 emergency much less invest in stocks. This thread really is out of touch with "normal" people.

 

[sevoflurane]

Interesting blog I came across.

10 Million Dollars: The Ideal Net Worth Amount For Retirement?

Curious to know the ideal net worth for retirement? As someone fake retired in 2012 at age 34 with $3 million, let me tell you. $10 million sounds like the ideal amount of money to retire with. I was talking to a tennis friend of mine who said his sister checked out once she cleared

www.financialsamurai.com

 

[rowsdower88]

You and I both know that's only popular because people are all too happy to tax OTHER people. If there was a blanket tax increase on ALL people, I doubt there would be support for a tax increase.

Most normal people aren't really thrilled about paying more taxes.

The poll was trying to see if taxing wealthy people and corporations more was popular. Most people aren't wealthy. So I agree that the result is intuitive. I suspect you're right that if it was asking a broader question about taxing everyone at higher rates that wouldn't be popular.

And how are you going to post a BS study claiming that people "feel" the wealthy don"t pay their fair share of taxes. You keep squawking about objective data when trying to support that the current economy is fine but you post subjective junk like this?

The top 1% pay nearly half of the federal taxes. That has consistently increased over the last 20 plus years.

You posted your opinion about how you felt about taxing wealthy people and how you thought other wealthy people would feel about it. I showed you a poll (a collection of opinions) that proved you correct in a sense - most wealthy people don't want to pay higher taxes. I wouldn't use a poll to tell me if a policy is good or not for the country, that would be dumb. The poll doesn't support my argument except in the sense that it shows some democratic strength behind taxing wealthier people more, which on its own doesn't make it right. I think it's right for different reasons.

Given that most income gains since the Reagan administration have gone to the top 1% (they've been the largest beneficiaries of American government) it does make some sense that their responsibility to keep the government funded should increase accordingly.

 

[Splenda88]

The economy is doing well for people in this thread, but 44% of Americans can't cover a $1,000 emergency much less invest in stocks. This thread really is out of touch with "normal" people.

That was the case before covid. Most Americans are just stupid with money

 

[Splenda88]

The top 1% pay nearly half of the federal taxes. That has consistently increased over the last 20 plus years.

Summary of the Latest Federal Income Tax Data, 2024 Update

The Tax Cuts and Jobs Act (TCJA) made many significant, but temporary, changes to the individual income tax code to lower tax rates, widen brackets, increase the standard deduction and child tax credit, and more.

taxfoundation.org

A significant percent pay no taxes. Something like 40%. Of course they wouldn't mind if taxes increased.

The top 1% of American earners now own more wealth than the entire middle class

More than one-quarter of all household wealth, 26.5%, belongs to the super rich, and their wealth is growing.

www.usatoday.com

 

[rowsdower88]

The economy is doing well for people in this thread, but 44% of Americans can't cover a $1,000 emergency much less invest in stocks. This thread really is out of touch with "normal" people.

The next question you should ask is: "What percentage of Americans couldn't cover a $1,000 emergency 20 years ago?" (inflation adjusted)

I suspect you're getting that stat from the Bankrate survey? I think that survey only goes back to 2014 per a quick google search. It seems like that 44% figure is steady for the past three years +/- 2%, but I can't find info going back to 2014. Maybe they conducted the study differently then? In any case, yes, I agree it is absolutely troubling that many Americans can't afford a $1,000 emergency. But the question should be: is that stat improving or getting worse? Was it 50% of Americans in 2004?

I should add, that stat comes from a survey of around 1,000 people... so take it with a grain of salt.

Bankrate's Annual Emergency Fund Report | Bankrate

Among high interest rates, a new Bankrate poll shows that a growing number of people have more credit card debt than emergency savings.

www.bankrate.com

Edit: lol, it was 60% of Americans in 2019, so some progress has been made on this metric.

Most Americans don't have enough in savings to cover a $1,000 emergency expense

60% of Americans don't have $1,000 in emergency savings, a survey says. If things go wrong and you're not ready, the consequences can be drastic.

kslnewsradio.com

 

[Angus Avagadro]

The next question you should ask is: "What percentage of Americans couldn't cover a $1,000 emergency 20 years ago?" (inflation adjusted)

I suspect you're getting that stat from the Bankrate survey? I think that survey only goes back to 2014 per a quick google search. It seems like that 44% figure is steady for the past three years +/- 2%, but I can't find info going back to 2014. Maybe they conducted the study differently then? In any case, yes, I agree it is absolutely troubling that many Americans can't afford a $1,000 emergency. But the question should be: is that stat improving or getting worse? Was it 50% of Americans in 2004?

I should add, that stat comes from a survey of around 1,000 people... so take it with a grain of salt.

Bankrate's Annual Emergency Fund Report | Bankrate

Among high interest rates, a new Bankrate poll shows that a growing number of people have more credit card debt than emergency savings.

www.bankrate.com

Edit: lol, it was 60% of Americans in 2019, so some progress has been made on this metric.

Most Americans don't have enough in savings to cover a $1,000 emergency expense

60% of Americans don't have $1,000 in emergency savings, a survey says. If things go wrong and you're not ready, the consequences can be drastic.

kslnewsradio.com

From Jan 2017, seems about the same. 56% . 66% to 76% Live paycheck to paycheck today, depending on what you read. Credit card debt is over 1 trillion for the first time. People aren't feeling better off if you talk to them or.look at polls. I have several friends with adult children who have jobs and can't afford a home with avg price being 420k last I looked.

A $500 surprise expense would put most Americans into debt

Six out of 10 in the U.S. lack the savings to cover a modest emergency expense, highlighting their financial insecurity

www.cbsnews.com

 

[Splenda88]

From Jan 2017, seems about the same. 56% . 66% to 76% Live paycheck to paycheck today, depending on what you read. Credit card debt is over 1 trillion for the first time. People aren't feeling better off if you talk to them or.look at polls. I have several friends with adult children who have jobs and can't afford a home with avg price being 420k last I looked.

A $500 surprise expense would put most Americans into debt

Six out of 10 in the U.S. lack the savings to cover a modest emergency expense, highlighting their financial insecurity

www.cbsnews.com

Is that a reflection of the economy or it is a reflection of how financially irresponsible most people are?

 

[rowsdower88]

From Jan 2017, seems about the same. 56% . 66% to 76% Live paycheck to paycheck today, depending on what you read. Credit card debt is over 1 trillion for the first time. People aren't feeling better off if you talk to them or.look at polls. I have several friends with adult children who have jobs and can't afford a home with avg price being 420k last I looked.

A $500 surprise expense would put most Americans into debt

Six out of 10 in the U.S. lack the savings to cover a modest emergency expense, highlighting their financial insecurity

www.cbsnews.com

I've had trouble accepting the "paycheck to paycheck" numbers.

"even 4 in 10 high-income Americans, or those earning more than $100,000, say they're in the same position, the research found."

While it might be true as a survey response, I think the variation in what counts as "paycheck to paycheck" for people is quite dramatic. The inability for many to avoid a $500 expense without going into debt is alarming. Would be interesting to see comparisons with other countries. Is it a uniquely American phenomenon of "keeping up with the Joneses" or is inequality everywhere else resulting in similar responses. There's probably plenty of data out there on savings rates and savings rates would definitely be a better metric than this.

 

[Angus Avagadro]

I've had trouble accepting the "paycheck to paycheck" numbers.

"even 4 in 10 high-income Americans, or those earning more than $100,000, say they're in the same position, the research found."

While it might be true as a survey response, I think the variation in what counts as "paycheck to paycheck" for people is quite dramatic. The inability for many to avoid a $500 expense without going into debt is alarming. Would be interesting to see comparisons with other countries. Is it a uniquely American phenomenon of "keeping up with the Joneses" or is inequality everywhere else resulting in similar responses. There's probably plenty of data out there on savings rates and savings rates would definitely be a better metric than this.

Personal savings rate is 3.2 % for March 2024, down from 4.1% in Jan 2024

Personal Saving Rate | U.S. Bureau of Economic Analysis (BEA)

Personal Saving Rate Monthly

www.bea.gov

 

[rowsdower88]

Personal savings rate is 3.2 % for March 2024, down from 4.1% in Jan 2024

Personal Saving Rate | U.S. Bureau of Economic Analysis (BEA)

Personal Saving Rate Monthly

www.bea.gov

Good website. Looks like "personal savings as a percentage of disposable income" has been tracked since the 60's and was around 10% until the late 90's at which point is dipped and has hovered around 3-6% ever since except for the pandemic where it shot up to 20-32% (stimulus checks?).

There's probably people smarter than me who could analyze this and arrive at different conclusions, but it does suggest Americans are saving less disposable income starting about 25 years ago.

Here's another interesting trend wrt international savings rates:

Spending Down Pandemic Savings Is an “Only-in-the-U.S.” Phenomenon - Liberty Street Economics

Household saving soared in the United States and other high-income economies during the pandemic, as consumers cut back on spending while government policies supported incomes. More recently, saving behavior has diverged, with the U.S. saving rate dropping below its pre-pandemic average while...

libertystreeteconomics.newyorkfed.org

 

[Angus Avagadro]

That's interesting. Good website. Looks like "personal savings as a percentage of disposable income" has been tracked since the 60's and was around 10% until the late 90's at which point is dipped and has hovered around 3-6% ever since except for the pandemic where it shot up to 20-32% (stimulus checks?).

There's probably people smarter than me who could analyze this and a million different conclusions, but it does suggest Americans are saving less disposable income starting about 25 years ago.

Here's another interesting trend wrt international savings rates:

Spending Down Pandemic Savings Is an “Only-in-the-U.S.” Phenomenon - Liberty Street Economics

Household saving soared in the United States and other high-income economies during the pandemic, as consumers cut back on spending while government policies supported incomes. More recently, saving behavior has diverged, with the U.S. saving rate dropping below its pre-pandemic average while...

libertystreeteconomics.newyorkfed.org

I guess its an interesting exercise to see how other countries are doing, but I'm not too concerned about how they are saving. Saying we are doing better than them merely implies we suck less than they do. We are going to need some lackluster growth for a couple quarters before interest rates come down. I do believe we are starting to see some early effects from the FEDs monetary policies

 

[makemoney2024]

I've had trouble accepting the "paycheck to paycheck" numbers.

"even 4 in 10 high-income Americans, or those earning more than $100,000, say they're in the same position, the research found."

While it might be true as a survey response, I think the variation in what counts as "paycheck to paycheck" for people is quite dramatic. The inability for many to avoid a $500 expense without going into debt is alarming. Would be interesting to see comparisons with other countries. Is it a uniquely American phenomenon of "keeping up with the Joneses" or is inequality everywhere else resulting in similar responses. There's probably plenty of data out there on savings rates and savings rates would definitely be a better metric than this.

America has gotten ridiculously expensive in most places where people want to live.
That being said, Americans live on credit and have always overspent. Many do try to keep up with the Joneses but many just don’t know how to budget because it’s so easy to get t credit in this country.
So you now have a twofold problem. But the overspending has always been there.

 

[rowsdower88]

I guess its an interesting exercise to see how other countries are doing, but I'm not too concerned about how they are saving. Saying we are doing better than them merely implies we suck less than they do. We are going to need some lackluster growth for a couple quarters before interest rates come down. I do believe we are starting to see some early effects from the FEDs monetary policies

I'm going to withhold judgement on whether or not "Low American Savings" is a modern (last decade or two) phenomenon that is affecting millennials/gen z to a disproportionate degree. Depending on which metric you're concerned about, it has been an issue debated since at least the 80's. I would tentatively say the problem has gotten worse, but savings rates are only one aspect of how Americans are doing financially.

https://www.brookings.edu/wp-content/uploads/1987/06/1987b_bpea_summers_carroll_blinder.pdf

 

[pgg]

I'm going to withhold judgement on whether or not "Low American Savings" is a modern (last decade or two) phenomenon that is affecting millennials/gen z to a disproportionate degree. Depending on which metric you're concerned about, it has been an issue debated since at least the 80's. I would tentatively say the problem has gotten worse, but savings rates are only one aspect of how Americans are doing financially.

https://www.brookings.edu/wp-content/uploads/1987/06/1987b_bpea_summers_carroll_blinder.pdf

Whether savings rates are substantially different now compared to the 1980s is only part of the story.

It's undeniable that the consequences of low savings rate are much worse now, compared to then. Very few people in the workforce now have any kind of employer-funded retirement plan. The military is a notable exception, but even that has been seriously watered down in the last few years. New joins since 2018 who stay for 20 get a pension plan with a 2% base multiplier instead of 2.5%. In 1986 they also made significant changes (cuts) to it. The deal I got in 2022 is waaaaay worse than what my dad got in 1972.

To be doing "as well as" a 1980s American the modern family needs to be saving far, far more. They're not.

 

[mentos]

My friend has 7 rental properties. They used to all pay on time but within the past year, 3 of the tenants have been late with rent. In one small complex, 2 of the owner occupied units have been late with HOA payments.

So that's my metric for how things are going.

 

[rowsdower88]

It's undeniable that the consequences of low savings rate are much worse now, compared to then. Very few people in the workforce now have any kind of employer-funded retirement plan.

I have questions about the consequences and maybe some indirect pushback:

If the savings rate drop has been going on since at least the 80's (over 40 years), why aren't we seeing increases in elder poverty specifically (1) or poverty generally (2)?

It is true that pensions have gone away for the most part and I agree that 401ks are a poor replacement (not what they were designed to do), but over 70% of people have access to one and over 50% take advantage of it. (3) So it seems like people are adapting to not having pensions available? Which does have some positives (ex. More fluid labor market). I don't know if pensions were ever adopted by over 50% of the working population? I can't find a source on that, but one source did say that in 1975 27 million people participated in one compared to only 13 million in 2019. (4) Population of the total civilian US labor force in 1975 was 93M, so about 29% of American workers with pensions by napkin math? There is probably a better source out there so take that with a huge grain of salt. There are probably issues with male workers being the primary breadwinners for families in 1975 that make this figure artificially low among other things.

Contributions to 401ks generally aren't considered part of "disposable income" (at least two sources suggest that) so that might be leading to undercounting of what we might consider "true savings rates" from previous posts?

One consequence of lower savings rates we could count as getting worse would be eviction rates. This database only goes back to 2020, but other sources suggest 2023 has been an especially bad year. (5) It doesn't seem like there is a good website tracking this prior to 2020 though and there was an eviction moratorium in place around 2020-2021 so that does result in 2022-2023 being artificially high to some extent.

Credit card (6) and mortgage (7) delinquencies aren't especially high relative to 2009-2010 and prior (although credit card delinquencies are increasing the past 2 years, we're still below 1990's percentages).

Elderly employment (people over 65 who are still working) is up (8). I personally don't want to be working that long, but I'm hesitant to prescriptively say it's a bad thing... I don't know if there is any research on those "unhappily working" past 65? (This is further complicated by the elderly being generally healthier today than in previous decades. Ex. Grandpa's shoulder surgery allowed him to keep his manager job for another couple years.)

I'm saying all this to get to a broader point. When you say "the consequences of low savings are much worse now", what consequences are you referring to?

Edit: I promise I'm not this Panglossian in real life. I do think America has a lot of problems, but compared to the past we are moving in generally positive directions.

1. https://www.google.com/url?sa=t&sou...UQFnoECEsQAQ&usg=AOvVaw0mgwyBbY73LMTtSVS5-r4k

2. National Poverty in America Awareness Month: January 2024.

3. 73 percent of civilian workers had access to retirement benefits in 2023 : The Economics Daily: U.S. Bureau of Labor Statistics.

4. Americans love pensions. Where did they go? Will they ever return?.

5. Eviction Tracking System | Eviction Lab

6. Delinquency Rate on Credit Card Loans, All Commercial Banks

7. Delinquency Rate on Single-Family Residential Mortgages, Booked in Domestic Offices, All Commercial Banks

8. Older Workers Are Growing in Number and Earning Higher Wages.

 

[rowsdower88]

To be doing "as well as" a 1980s American the modern family needs to be saving far, far more.

Why?

How did you arrive at this conclusion? I'm not sure how I would attempt to justify this statement if I tried, but you seem confident in it. There's just so many variables to consider.

If the focus is inflation, then in the late 70s it was much higher than today and generally higher throughout the 80s than the 2000s and 2010s were. There are indications that inflation, as high as it is currently, is decreasing as well. One could make the argument that lower savings rates are a reflection of a lower inflationary environment? Maybe Americans will respond accordingly in the next couple years and we'll see an increase in savings rates? Interest rates don't always reflect inflation so that's another complicating factor...

If the question was "Should Americans save more today than they did in the 1980's?" I don't know how I would answer.

This just seems like a really complicated question that could be hotly debated.

 

[BLADEMDA]

 

[pgg]

If the savings rate drop has been going on since at least the 80's (over 40 years), why aren't we seeing increases in elder poverty specifically (1) or poverty generally (2)?

I think we aren't seeing that because -

Elderly employment (people over 65 who are still working) is up (8)

But admittedly I haven't examined the evidence as thoroughly as you have.

If life expectancy was way up then maybe working later in life would be a good thing, as old, healthy, fit people continued their productive and happy work. But few people ever work for purely or even majority "self actualization" reasons. And old people are less healthy and less fit than they've ever been. And life expectancy really isn't up (perhaps even declining in the USA), and I think most people who are working into their late 60s or longer are either doing so out of necessity, or workaholism / mental illness.


I do freely admit that much of my feeling on the subject is anecdote and perception. I don't think things are really all that bad. Wages are up, especially on the low end, which you argue fairly convincingly more than offsets recent inflation. But again subjectively I feel like these recent wage increases are just barely denting the deficit of wage growth that has compounded since at least the 90s, and instead of being truly ****ed those people are just still modestly screwed in this environment (same as they were 10 years ago).

I do think the spiraling debt matters and will hurt us all, badly, in the long run. The doomers and crypto cultists think it'll all crash sometime between next Thursday and the next few years. I suspect there's decades of can kicking still possible but you never can tell when some black swan event will tip the equilibrium enough to topple it all.

 

[Gern Blansten]

Fair enough

Edit: I don't think that level of skepticism is warranted. We trust quite a few administrative departments to do millions of things everyday that go unnoticed (IRS handling our taxes, CDCstaying up to date on diseases, Department of Defense, Department of Education...). I think generally skepticism about government reports should be supported by evidence for that skepticism to be warranted.

You just listed 4 government agencies who have been consistently under fire for corruption. They do millions of corrupt things that don't go unnoticed, but they do go ignored. The IRS wants to hire 87,000 new agents to better enforce their policies, which they have apparently walked back since they had such push back. The CDC has been under constant fire for their decisions related to COVID, as the statements by the "conspiracy theorists" have mostly been found to be true. The department of defense is one of the most fiscally irresponsible and fraudulent entities in the history of the world (see Carson, Hayes, and Flores and the $7 million fraud as one example). The Department of Education is generally just a mess for a huge variety of reasons.

 

[rowsdower88]

View attachment 386688

My thesis is that Americans are "feeling worse" despite doing materially neutral or better than the past (timescale 1980's-now) on most metrics.

This probably varies along racial and age demographics and across income levels.

Therefore, I'm not surprised by this survey. Not only because it's only over 3 years, but because it aligns with my thesis. The next question should be: if Americans feel this way, do their retirement account balances (or expected future income in the case of pensions) reflect that relative to past Americans?

Even though materially the median American might be doing better today in various metrics than in 1980, inequality has worsened while simultaneously we have more access through media to see just how much better the wealthy live. (1)

Just going to cite this relevant article on generational wealth and vibes. (2)

(1) A Guide to Statistics on Historical Trends in Income Inequality | Center on Budget and Policy Priorities

(2) The Myth of the Broke Millennial

 

[nimbus]

In the 1980s I drove a POS Dodge Omni that broke down all the time. In the 1990s, I was carrying quarters everywhere and needed to know the locations of all the nearby pay phones in case my pager went off. My life is better than it’s ever been.