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Just curious, did you see post #216 in this thread, where I had mentioned the difference in the price for a new car, circa-1980's vs. today (2014 and 2015)? The point I was trying to make was that the financial industry has made purchasing a new car, which was much more affordable in the 1980's for the average person, either extremely hard or difficult (or even impossible, for many households) in 2015. Yet another example of "moving the goal posts", and making what was once-affordable, no longer affordable or within reach financially...
Here is an excerpted quote, from the post:
And the average income in the 1980's was around $20K, so a $7K car would be 28% of your annual salary. Interest rates for new car loans in the 1980's ranged from a high of 16.5% to a low of 10% (average of 13.25%). I don't think you could get a car loan for more than 3 years at that time, but even with a 5 year term, that would mean you would be paying $207 a month for 60 months.
Tax rates in the 80's were extremely high as well. The tax tables indicate around 12.6% for 20K salary and 29.2% payroll taxes (1/2 paid by employer) which means a monthly take home pay of around $1215, so your car payment would be 17% of your take home pay.
Remember, too, that a car built in 1985 did not have the technology or standard "luxury" accessories of even the basic cars of today. Also, the longevity of cars built in 1980 were no where near that of a car of built today.
Just saying that when you factor in everything, you are really comparing apples to oranges, unless you use all of the equivalent cost factors that were in play for the 1980's, i.e., high energy costs, high interest rates, high tax rates, etc.
You know, it's really interesting how one's perspective can change over time. I used to think what you describe was a hardship. Now I don't look at it that way, because living without roommates and owning a car are luxuries I have not had since 2008.
The upside is, I do not have any debt at all. If I tried to live the way my parents do (who are quite frugal by common U.S. standards of today), I'd be taking out student loans to cover the difference between my graduate student stipend and my costs.
As it stands, I have zero debt, an emergency fund of 9 months, and an investment portfolio worth nearly 1.5 times my annual income.
It's not necessarily the little things that bite you. The biggest things for most people are housing and transportation. you can make a lot more progress by cutting the big ones out than by trimming around the edges and coupon-clipping.
Little things can add up, ie: I made a rule for myself that I would only go to Starbucks or any coffee shop if I was going to sit in there for at least 90 minutes to do work. Otherwise if I want coffee I'll make it myself. I was surprised when that rule ended up saving me hundreds per year. The $2-3 a pop I had been doing was adding up to like $400-500 a year.
Once you have money it's easier to make money AND save money. My costs are less now that I have only one job and bought a house, even taking into account home repairs. Now that I have 1 job and not 3 I'm not spending as much on gas, not needing to buy fast food in between hectic transit from one job to the other. I spend more time at home because I have a nicer place. I used to hate my apartment because of the neighbors or roommates so I'd go out to get away from them, spending on gas, food, & drink. I'm living nicer but spending less money.
When you're poor you pay a poverty premium. Most notable as far as that goes are the fees banks charge you. They charge you less when you have more money. Generally treat you better too.
Yes housing is costly. That doesn't mean that if you earn more you do not get ahead. If it is priced too high, don't buy. Rent and invest the difference. Continue to do so until prices are reasonable relative to incomes and rents.
In more than half the metros of the U.S., rental rates are more than mortgages for equivalent homes.
My metro is terrible on this. My mortgage is about $650 but I put down $750-800 on it.
To rent an equivalent house is $1000 minimum.
Again that principle holds. If you have money, you save money. If you don't have it, you spend more.
I don't think you need to live in poverty to have empathy for their plight....
My observation is that the disdain and lack of empathy for the poor is driven by a cultural phenomenon. Of course it has always existed but it is ever so more prevalent today. I personally am very concerned with where our country is headed culturally and socially in part because the self-centered obsession with "the individual".
Just look at this forum.... the vast majority of the posts along these lines equates poor with lazy and freeloading the welfare system. They ignore the fact that the majority of the poor are indeed... working poor (many don't even collect welfare)
I don't think it comes from lack of empathy, but the increase in the entitlement mentality of those who feel that government assistance is a right and is not meant for short term assistance, but as a supplement to their income.
If 47% of American households are receiving some form of government aid, it is really hard to believe that "most of the working poor" don't collect benefits. Welfare has become an all encompassing term that includes section 8 housing, Medicaid, utility assistance, clothing assistance, etc. It no longer means food stamps, like in the old days.
Historically, welfare was intended to aid "widows and orphans," meaning people who were unable to provide any necessities for themselves. The "welfare" of today includes disability payments to fat people or depressed people (who don't have any trouble going out to socialize or sit around all day, but for some reason they are incapable of doing any income creating labor) or 99 weeks of unemployment or free cell phones, etc.
The government has created an entire underclass of dependent poor by expanding entitlement programs and lowering requirements so that more and more able bodies people give up their liberty in return for servitude to the whims of government. The government has persuaded people that they are victims and are entitled to take the money of others. THAT is where you see what is perceived as a lack of empathy, but in reality, it is the reaction of people being forced by the state to turn over the fruits of their labor to others who have been told that they are entitled to it.
Before Obamacare, the childless poor got little or nothing, now they get Medicaid in some states. Food stamps were limited to 3 months every 36 months. Only a few states offer cash and that's not enough to rent a room. If they live with other people they don't qualify for a free phone (only one phone per household, plus if they live with others, everyone's income is counted and the total income is too high to qualify). It is extremely difficult for the childless poor to get subsidized housing. I was not able to even get on the waiting list for Section 8.
Pop out a kid and the world is your oyster, but the childless get little or nothing.
That is because welfare is intended to aid "widows and orphans," meaning that the aid is meant for a child. If you are single and childless, or even (especially) married and childless, there is no excuse for you not to make enough to pay for your own housing costs. Without kids, you can work 2 or three jobs to earn money. You can live in a studio apartment or even rent a single room in a house. Why the heck do you think you are entitled to any money from other taxpayers to pay for what you are responsible for?
What in the world makes you think someone coming right out of college can save that much money?
That's close to to $300/wk. In other words, close to 100%, or more than 100%, of what an entry level job pays after health insurance and taxes.
No, you start saving $20 a week and put it into an interest bearing account. You put any money you get as gifts. You put bonus money or money you make working extra jobs, etc. You sell stuff, you find ways to make extra money that you put into savings.
If you attended college and as a result you get a job that pays $30K, then you better get a second job or figure out a way to advance pretty quickly. My first job out of college paid $22K and that was in 1983.
You make a great point. I also have thought of this. When folks say that "living within their means" it can indeed be a way for a sneaky individual or group to sort of take the convo from the destruction of the middle class to trying to make people forget inequities and settle.
In my family's case being all immigrants 2 generations ago it was very important to getting ahead by my ancestors living within their means. Looking at old census records I see that my family sometimes had boarders. In one case it must have been 10 people living in one small house.
Fast forward to today, I support uncovering evil(yes I will use that strong a word), sneaky, unethical companies that want to exploit the worker and squeeze as much as they can from the individual without giving back. Many people think Texas is so great with it being a right to work state but I see how many blue color workers are exploited by it. In some ways it is good but is it an improvement? I for one do not want to go back and live like 200 years ago and feel lucky for the poor or me to get scraps for grueling labor. Many do not think of this when they support the corporations over the people. It is a confounding issue.
In more than half the metros of the U.S., rental rates are more than mortgages for equivalent homes.
My metro is terrible on this. My mortgage is about $650 but I put down $750-800 on it.
To rent an equivalent house is $1000 minimum.
Again that principle holds. If you have money, you save money. If you don't have it, you spend more.
Are you single? If so, how much does it cost to rent a room in a house or share rental expenses? Everyone can save money if they are creative in how they spend their money and opt for the choice that keeps the most money in their pocket, even if that means living in a tiny room of a house or driving a $500 K car with 130K miles on it, while saving for a better car, etc.
I don't think it comes from lack of empathy, but the increase in the entitlement mentality of those who feel that government assistance is a right and is not meant for short term assistance, but as a supplement to their income.
If 47% of American households are receiving some form of government aid, it is really hard to believe that "most of the working poor" don't collect benefits. Welfare has become an all encompassing term that includes section 8 housing, Medicaid, utility assistance, clothing assistance, etc. It no longer means food stamps, like in the old days.
Historically, welfare was intended to aid "widows and orphans," meaning people who were unable to provide any necessities for themselves. The "welfare" of today includes disability payments to fat people or depressed people (who don't have any trouble going out to socialize or sit around all day, but for some reason they are incapable of doing any income creating labor) or 99 weeks of unemployment or free cell phones, etc.
The government has created an entire underclass of dependent poor by expanding entitlement programs and lowering requirements so that more and more able bodies people give up their liberty in return for servitude to the whims of government. The government has persuaded people that they are victims and are entitled to take the money of others. THAT is where you see what is perceived as a lack of empathy, but in reality, it is the reaction of people being forced by the state to turn over the fruits of their labor to others who have been told that they are entitled to it.
47 percent of Americans don't receive government aid. The figure Romney said actually refers to the percent who pay federal income tax. But most of those people still pay sales tax, property tax and state taxes, plus payroll tax. In fact, many of them end up paying a higher tax rate than Romney!
And the majority of these people live in red states.
I'm sure you don't see yourself as entitled but by the time you factor in things like mortgage interest deductions and sheltering income in a 401K, there's a high possibility that your entitlements have reduced your proportional tax burden below what some of these people you rail against pay.
Good Lord, are you crazy? We never went hungry! We had food for fuel, we didn't have all the soda and fast food and pre-packaged crap that the "poor" people of today. Hell, you can buy pizza, burgers and slurpees with a welfare credit card today.
This is an excerpt of what you had claimed, in your earlier post (your words, not mine):
Quote:
We lived on fried baloney, potato soup and powdered milk for many years as our family of 6 lived on my dad's monthly salary of about $500 a month. Their house payment was $200 a month.
How is a continual or constant diet of fried bologna, potato soup, and powdered milk for years considered healthy and balanced, nutritionally? Bologna is not necessarily junk food per se, but a person could also put forward the legitimate point that bologna is in any event also a highly-processed food, and thus, possibly close to junk-food status as it is? How it "crazy", for me to point out that this kind of meager and limited fare could potentially represent border-line starvation? (Not to mention that another poster I had quoted had mentioned eating a lot of miracle-whip, etc., sometimes wholly without bread?)
Quote:
My parents were responsible for housing, feeding and clothing the four children they brought into this world without a hand out for the government or whining about "a living wage."
The fact that your family *wasn't* provided with a living wage was a failure by society as a whole, to your family. A fair, inflation-adjusted living wage would have only ensured that your family was compensated fairly for the hard work that you yourself had attested that they worked at, while lifting them out of poverty. Why is it considered as "shameful" or "wrong", to ask for what is just, fair, and reasonable (i.e., fair compensation for a family's hard work and labor), in the first place?
Quote:
My parents saved enough to send their children to college, so we could graduate debt free. A few fried baloney sandwiches and SOS was worth it.
Did you ever stop to consider, though, that if your family had been provided with adequate wages to afford more nutritionally-generous food, as compensation for their hard labor, that you and your siblings might have been in better health today -- instead of having to make due with years of eating highly-processed food?
Quote:
"these kinds of conditions" make people stronger and made us all want to achieve more, so we could live better than our parents and provide the same example for our children.
Surely society can afford to be a little bit more generous and compassionate though, on its least well-off citizens? What is so bad about poor- and middle-class Americans getting more of their fair share of the economic pie, every year? I'm not saying that hard work is bad, I'm just saying the fruits of everyone's labors should be more equitably-allocated, and not just weighed heavily in favor of the wealthy?
Quote:
Please tell me all about how much time you have spent in 3rd world countries? There are children in India, China and Africa who would see my childhood as paradise.
Admittedly, I have not been to any 3rd-world countries. At the same time, children in first-world countries like Sweden, Norway, and several other European countries have a higher standards of living and are happier overall than are we are here in the U.S., and they have greater social equality and parity between the various economic classes than us as well.
Quote:
You do realize that those citizens in the US that live below the poverty line, still rank among the top 1% in the world?
Maybe so, but 2 wrongs don't make a right. The fact that children in other countries are more impoverished than we are here at home isn't a valid excuse, IMO, to encourage or justify inequality and poverty, here in the U.S.
Quote:
Explain to me how someone could be poor, and still have flat screen TVs, own homes and cars, have cable and mobile phones and all the latest fashions?
Let me turn that question around: why *should* Americans who are less well-off financially intentionally be deprived of having TVs, not have cars or homes, and not have mobile phones? Why does the fact that they are poor make them inherently undeserving, of any of the above?
Quote:
I would take my upbringing, free from government handouts, over today's entitlement minded, government aid addicted, whiners of today.
If someone has a legitimate need for it, what is so wrong of people making use of government assistance like Social Security, food stamps, etc.? Working people pay into these systems, so why should they be ashamed of using a system that they have paid into, all of their working lives, when times are tough and they are in need?
Quote:
You haven't lived until you've had to press every scrap of soap in the house into a small bar, so that you could get ever last use out of it, or used Ivory dishwashing liquid on your hair when you run out of shampoo. It makes you a stronger person.
That's the point though -- no one *should have* to live in that kind of poverty, to begin with.
Last edited by Phoenix2017; 02-25-2015 at 02:02 PM..
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The point I was trying to make was that the financial industry has made purchasing a new car, which was much more affordable in the 1980's for the average person, either extremely hard or difficult (or even impossible, for many households) in 2015. Yet another example of "moving the goal posts", and making what was once-affordable, no longer affordable or within reach financially...
