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Generation Wrecked
Ryosen writes "Fortune magazine has an interesting article discussing how members of Generation X (those born between 1966 and 1975) have been damaged by the fall of the economy and the life-long ramifications of the dot.com boom-bust, stating 'No generation since the Depression has been set up for failure like this.' Particularly disturbing is the statement 'Worse yet, for some Gen Xers, their peak earning years are behind them. Buried in college and credit card debt, a lot of them won't be able to catch up as they approach their prime spending years.'
Are the best years of our lives truly behind us?"
Italy has the lowest birth rate in Europe (~1.2 births per woman)
You know that Europe's shrinking (despite Italy, France, Poland and other Catholic countries) while the US birth rate is rising, right?
They're at under replacement rate while we've just gone over 2.1 births/woman/lifetime.
Go secular humanism!
the major advances in civilization are processes which all but wreck the societies in which they occur - A.N. White
Look up "begs the question". I do not think it means what you think it means.
Written in 1997, "The Fourth Turning" stated that the U.S. was (then) in an "Unraveling" and would be entering a "Crisis" period around 2005.
It is a fascinating book, and I highly recommend it.
See their web site for more.
He's not going to buy a house with his 8 months' saved salary, because that's his cushion against unemployment.
What happens if he buys a house, spends that savings on a big down payment, and then 3 months down the road he gets laid off? If he can no longer make his house payment, he's out on the street, having lost his capital investment. If he's renting, on the other hand, he's not used that capital yet, and retains the flexibility to move to a cheaper place, as well.
Now, if he wants to start saving up separately from that 8 months' salary, then using that other saved amount to buy into a house, that would be a great idea. But it would be foolish for him to give up his position of security by using his major savings up and going into a position of debt if he doesn't have to.
Get off my launchpad!
Yes the bubble will burst in the housing market.
However in the mean time, my monthly payment GOES somewhere (part to interest (which is TAX free!) and part to equity) AND my rent doesn't raise every year.
And if you aren't going to be in a house for 5 years, DO NOT BUY! I REPEAT, DO NOT BUY!
I have a fixed cost per month. Also, I have a town house well situated close to schools in a pretty good neighborhood. When I go to sell in a few years I will have no problems.
So lets see, instead of paying 1200 for a 1 bdroom apt, I pay 1000 for a 3 level town house.
Hmmmm, do the math. Never mind equity and investment... I get more space for less money. Plus my income keeps rising while my mortgage stays fixed. Sounds like a great deal to me!
Oh, and the reason why I am not paying extra money to bring down the principal: This is the starter home. In 4-5 years when the market drops I will be in a prime position to buy a fat lot of land. All the money that I could have put towards principal will instead be in a REAL investment vehicle (short term, we're talking about 5 years here) which I will then use towards downpayment of the house- getting me a teensy-weensy mortgage.
In the future, I would want to not be isolated from my friends in the Space Station.
Yeah, I know how you feel... I really hate investing in my net worth every month.
I've owned for three years. Only 17% of my payment currently goes towards principal. I put away more than 4x my principal each month in non-house-related accounts.
I really hate how the interest rates are the lowest they have been in at least a decade.
Interest rates are tied to inflation. Inflation causes the effect where after 10 years, you are earning 25% more, your house is worth 25% more, and you are making the same monthly payments. Inflation is very low. The entire own-your-home mythos is based around that. You aren't going to like your mortgage much if the economy tips over into deflation, and you're making constant payments based on lower income for a reduced-price house...
I really hate the five digit deduction I get on my Federal income tax.
You're getting that deduction because you're investing in your bank via interest payments. It's not related to owning a house, it's related to having house-related debt. Also, everywhere I've lived, the cost of renting versus the cost of owning was always very comparable after tax considerations, so the deduction isn't a gain, it's what makes it all a wash. [Amazing how markets work to arbitrage such things away!]
And I really hate the fact that even if I sell my house for exactly what I paid for it, I will still come out at least 15% ahead.
Err, well, you must live in a different world than me. If I sell the house for exactly what I paid for it, I would be +0 in terms of cashflow (no month-to-month savings versus renting - actually, right now renting is cheaper), +0 in terms of gains, -6% for the agent's commission, and -4% for staging and prep work. I'd be +2% because part of my monthly costs goes towards principal. That's -8% or so. [Keep in mind that your down-payment is simply a return of capital, not a gain of any sort.]
Of course, I own my home, I can do whatever I want, I've already got a 20% gain as a cushion, and I plan to stay for a couple more years. But I certainly wouldn't be buying right now if I had any choice in the matter.
A HOUSE IS NOT AN INVESTMENT! IT'S A PLACE TO LIVE!
In my case, my parents basically made sure I had a job since I was 11, starting with a paper route. I had to learn in that time, how to budget my money and not to overspend or I had to wait until it was time to go collecting and then I had to figure out what I owed back to the newspaper and what I got to keep. While they helped a lot with the accounting, it did teach me early on how things work and how if you want something (Back then it was a Super Nintendo), you have to save for it and only buy it when you have enough money saved up so that you can buy it and still have a bit left over in case of a crisis.
In high school I got a job at a grocery store and also got a bank account. Now I had a little more spending power but by this time, I knew how to be conservative with my money and to keep a close eye on my accounts, using software to track my spending and keep track of checks I had written.
By the time I got a credit card, I knew well how to live within my means. I made sure to ALWAYS pay off the card in full each month unless it was an absolute emergency expenditure that I couldn't cover with one months pay. I also make sure not to have more than 2 credit cards and to try to never use more than one each month. I also make sure I can pay them in full each time unless its an extreme situation.
On top of that, I also set a "Paranoia level" on my Savings account. What that means is I choose an amount, in my case $5000 (started at $500 when I first got my bank account all those years ago) and I go VERY conservative on spending if I go below that until I've built it back up to above that level. So far that has saved me from every major disaster (car breaking down expensively, sudden big bill or need to buy something expensive like furniture) I've had in the 10 years I've had a bank account. It also reduces the need to use the credit card to cover sudden needs, as I do not like spending money I don't have at all.
Because of that, and driving a modest car ('95 Grand AM) and eeking out the most time I can from my computer (using a 5 year old Mac G3) rather than blowing it all on the latest and greatest every 6-12 months, I have managed to get a $120K home just this June and maintain over 5k in savings since then. I am going to try to raise that up to 10K soon as well as start cautiously getting into investing (maybe should have sooner but after the latest rounds of disasters in the financial world, glad I waited).
The main thing is to learn how to budget, keep a paranoia level of cash in the bank and don't spend money you don't have when you can avoid it (i.e. no credit card debt or loans unless necessary).
If you do that, you should be able to weather all but armageddon or the next great plague.
--Won't that be grand? Computers and the programs will start thinking and the people will stop. - Dr. Walter Gibbs
--if you bought a house in the last 2 years, you're going to look worse than this guy after the bubble bursts in the housing market.--
No way man. There has only been one year in which property value did not increase overall in the US and that was during the Great Depression.
Much safer than stocks. Population increases, land doesn't, it's not rocket science.
You are absolutely correct. In our division, we have 2 weeks of vacation a year. No alcohol on the premisis either. It's American, with American work ethic. We churn out products like crazy. They call us 'cowboys' because we can turn something out in months that it takes them years and much more money to do. It's ca combination of competition and work ethic.
Over there, they are not allowed to work more than 40 hours a week (35 is usual). They serve beer in the cafeteria and spend about 3 months of of work on vacation. All things get done, eventually. They have great family and social lives.
When I recommended that the people scraping by leave the US, it's not because I don't want you here. It's completely because I think you'll be happier - both in the short and long run.
Slashdot's rate-of-post filter: Preventing you from posting too many great ideas at once.
In order to reasonably support the people expected to make social security claims over the next thirty years, taxes would have to be doubled at a minimum.
Nevermind that the social security tax rate has already gone up %700!
Assuming you're talking about just doubling your social security taxes (Rather than all taxes) then that would mean social security alone would be taking %30 of your income!
(Right now it takes %15. Though only half of that is reported on your paychecks.)
http://www.ssa.gov/OACT/COLA/taxRates.html
If a private pension plan were administered in this way the perpetrators would be in jail the money returned and everyone would be really angry.
And nobody would be joining the scheme-- its reputation would be ruined.
Yet why are people paying social security now? Cause they get shot by thugs with guns if they don't.
Aint it great to be the government? You can commit widespread fraud on the people and they don't have a choice-- they HAVE to pay!
THIS is what everyone is talking about when they say the government should take care of something-- they are talking about tyranny and oppression the government will take care of it by using lethal force to coerce compliance with whatever scheme it comes up with.
Liberals are just fascists who want someone else to hold the gun for them because it scares them.
Yeah, and you guys panned the ipod too: http://apple.slashdot.org/article.pl?sid=01/10/23
But for every Gates, Jobs and McNealy, there are millions who never found a good niche.
Look at the following quote from the Fortune article for a blatent lie in this regard:
Oh really? Let's look at these graphs.Notice that age of first marriage of baby boomer females as given in http://aspe.hhs.gov/hsp/trends/change.pdf matches closely the peak cohort for 1980 as well as the peak in crude oil prices in constant (1996) dollars near 1980. Onset and drop-offs of these variables also match.
Also notice that mortgage rates, crucial for nesting and reproduction at first marriage, accurately match these same trends. Finally note the radically different way government policy affected WW II GI's seeking their first mortgages compared to the treatment of their children at the same phase of life. Those who were 30 in 1984 were subject to delayed marriages from a variety of factors, not the least of which was the 1970s "stagflation" under which early boomers and GI generation bosses applied mandated "wage and price controls" preferentially to wages but not to prices -- which hit those just entering the job market the hardest. That's when people started jumping jobs to get better pay, but even that wasn't enough given the explosion of prices in real estate, energy and interest rates toward the late 1970s.
You know "boomer" programmers born after 1950? I know quite a few and there aren't many who are looking any better than Gen-X'ers. Look around and see if they're really as good off compared to Gen-X programmers as you would think given the article in Fortune and the comments on "boomers" here at ./ -- then report here.
PS: I was born in 1954 and the only ways I feel even remotely more advantaged by my birth year over Gen-Xers are due to the fact that microprocessors may have been more "real" as a frontier opportunity than the Internet -- and herpes was merely incurable while AIDS kills you. However even that last advantage (Herpes vs AIDS) evaporates when you consider that the disco studs were far lower in number than disco whores. "She can wait if she wants... blame it a all on yourself cuz she's always a woman to me..." -- Billy Joel
Seastead this.
I would have to save 1/4 of my earnings for 10 years. Now, explain to me how you are supposed to: buy a house, pay for your car, keep out of debt, and still fucking have 100k saved by the time you are 30s?
Easy. Follow simple rules that have worked for me:
1) Never drive a car that is worth more than two months gross pay. Only drive affordable reliable cars-- the insurance is much lower the taxes are lower, and obviously the payments are lower. Early to mid 80s Toyotas run like champs and can be had for cheap.
2) DON'T BUY A HOUSE! Even when you factor in the tax savings, the costs of owning a house for most people do not make sense. It is not a wise investment for anyone who's being reasonably prudent with their money. Yes, a small apartment is chepaer. Not on a per-square feet basis, but people buy houses bigger than they need.
YES IF YOU INVEST THE DIFFERENCE you make a lot more money living in an apartment than buying a house. BTW- there are alternatives. You could buy 2 acres about 30 miles out of town for $10,000 and put a mobile home on it (you can build a house on it later)... and have a place to live that cost little and will see appreciation AND the tax advantages of owning where you live.
3) Get out of debt. Well, you shouldn't be in debt in the first place. First off, for most careers if you get a years worth of apprenticeship and a job right afterwards, you can be productive at an entry level without going to college. 8 years later you will have 8 years of experience and people your same age will only have four. But if you're in a profession where you have to go to college then work your way thru it. Don't go into debt. The best option is to work your way doing the same job you're training for.
Basically, don't spend money. If you are wise with your money, you may well be retired by the time you're 40. Otherwise, when are you going to retire? 65? Never?
I don't know your living situation but if you had a roomate and weren't able to make ends meet then you were spending too much money (by definition, actually.) Where was your money going?
Yeah, and you guys panned the ipod too: http://apple.slashdot.org/article.pl?sid=01/10/23
The other aspect of this is that if you want to "sustain the lifestyle" of someone making $100,000 you have to figure in that:
a) while making the $100,000 you we're paying taxes on the income (say 25%)
b) You we're saving $31,000 per year for retirement (that you no longer need to - $2,600 * 12)
So, $100K - 25K taxes - $31K saving = $44K
Net result is that you only need to spend less than half of $100K/year to maintain your lifestyle.
Do their calculation figure this in?