Bank of America has an interesting report on who’s living paycheck to paycheck (PTP). It’s not just the poor. Blame the Fed.
Please consider Paycheck to Paycheck: What, Who, Where, Why?
What Does It Mean?
The term ‘living paycheck to paycheck’ is a fairly frequently heard expression but can be somewhat nebulous and is not always clearly defined. Broadly, one can imagine it refers to individuals or households that regularly spend nearly all of their income, leaving little to nothing left over for savings.
By that widely used definition, over 40 percent of respondents agreed or somewhat agreed to living PTP.
BofA restricted that definition as shown in the lead chart.
BofA refines PTP as “households where necessity spending is more than 95% of their household income, leaving them relatively little left over for ‘nice to have’ discretionary spending or saving.”
Even by that definition, which I endorse, the percentage of PTP households is staggering.
More surprising is that the proportion of households appearing to live paycheck to paycheck falls only slowly as incomes rise. Around 20% of households with incomes above $150K also appear to be living paycheck to paycheck. How can this be? One reason is that higher-income households may have bought larger, more expensive, homes and consequently have bigger mortgages. And often along with bigger homes come bigger insurance costs, property taxes and utility bills. It is also possible that as household incomes rise, some households may have more varied sources of income that are hard to capture – such as cash from sales of equities paid into brokerage accounts.
Generational Paycheck to Paycheck
That chart struck me as odd. But perhaps not. Zoomers and Younger millennials are priced out of a home and forced to rent.
Then again, anyone with a mortgage should have been able to refinance at 3 percent or lower, putting extra money in their pockets every month.
How Old Are the Youngest Boomers?
AI Response: As of June 2024, the youngest baby boomers are 60–69 years old. The baby boomer generation is defined as people born between 1946 and 1964.
Some experts have given the youngest baby boomers, born between 1954 and 1964, a new name, “Generation Jones”, because they are so different from older boomers.
Has anyone heard the name “Generation Jones?”
Regardless, boomers are at retirement age. The kids are gone. So why are boomers living PTP?
One possible answer that BofA did not explore is Boomers have many assets and are prepared for the future. Besides, you can’t take it with you.
Other possible answers, such as being totally unprepared for retirement, are much more troubling.
Which is it? I suspect both reasons are in play, and that leads to the high PTP percentage shown.
The Housing Factor
Note the Hidden Costs of Homeownership.
- Bank of America aggregated deposit data suggests that fewer households are moving between cities. In the second quarter of 2024, moves across cities fell 4% year-over-year (YoY) after a 15% YoY decrease this time last year. Those that are moving, however, are skewing towards Gen Z and lower-income households, likely as more households move out of necessity as opposed to choice.
- Some households are likely deferring moves due to increased “hidden” costs of homeownership (e.g., insurance, property taxes). Bank of America aggregated payments data suggests these costs are up significantly YoY, especially in the Sun Belt. And a study by the Federal Reserve Bank of San Francisco suggests that this area is affected by another “hidden” cost: climate change.
- Gen Z and lower-income movers are likely searching for affordability, particularly in the rental market. We find those metropolitan statistical areas (MSAs) with relatively more affordable rents are seeing the fastest population growth in Q2 2024.
- The fewer overall movers and the skew to younger/lower income movers is depressing consumer spending on moving-centric categories such as furniture. But if moving rebounds, we could see a tailwind to these areas of spending.
Housing is a big factor in PTP. Insurance has soared and so have property taxes except where capped.
The home ownership rate is only 35 percent for 25–30-year-olds, compared to 66 percent across all ages according to the Census Bureau.
New Record Highs on Home Prices
On September 28, I commented Yet Another Record High for Case-Shiller Home Prices
And a quick check on Mortgage News Daily shows that 30-year mortgage rates have surged back up to 6.85 percent from 6.11 percent on September 11.
I have been talking about housing since the start of this blog in March of 2003. The Fed keeps making the same mistake over and over.
Fed Hubris
Flashback March 4, 2021: Fed Hubris: Housing Prices Show the Fed is Making the Same Inflation Mistake
Prior to 2000, home prices, Owners’ Equivalent Rent (OER), and the Case Shiller national home price index all moved in sync.
This is important because home prices directly used to be in the CPI. Now they aren’t. Only rent is. Yet, OER is the single largest CPI component with a hefty weight of 24.05% of the entire index.
The BLS explains this away by calling homes a capital expense not a consumer expense.
However, that explanation ignores easily observed and measurable inflation. And it’s inflation, not alleged consumer inflation, that is important.
BIS Study on CPI Deflation
Note that a BIS Study finds that routine consumer price deflation is not damaging in the least.
Specifically, the BIS concludes “Deflation may actually boost output. Lower prices increase real incomes and wealth. And they may also make export goods more competitive!”
Worst of all, in their attempts to fight routine consumer price deflation, central bankers, led by the Fed, create very destructive asset bubbles that eventually collapse, setting off what they should fear – asset bubble deflations.
A $150,000 House in 1988 Now Costs $707,500 Thank You Fed
Using Case-Shiller data of repeat sales, on August 10, 2024, I noted A $150,000 House in 1988 Now Costs $707,500 Thank You Fed
Mess Entirely of Fed’s Making
This is a mess entirely of the Fed’s making. And it’s what happens when the Fed, and economists in general do not count home prices as inflation.
Home prices are not directly in the CPI or PCE. The latter is the Fed’s preferred measure of inflation.
Economists consider home prices a capital expense not a consumer expense. The problem is simple: Inflation is not just a consumer price concern!
The Fed ignored obvious inflation in the Great Recession and did so again in the Covid recession.
Dual-State Economy
And so here we are. The Fed is directly responsible for a dual-state economy of the haves vs the have-nots.
The haves are the asset holders. They have largely benefitted from massive asset bubble inflation. The have-nots are those who want to buy a home but are priced out due to inflation.
The Fed created this setup via QE and mortgage security purchases driving interest rates to zero and mortgage rates below 3 percent.
Existing homeowners refinanced putting extra money in their pocket every month.
The have-nots are trapped renting, while most of the haves are trapped in their homes unwilling to trade their 3 percent mortgage for a 6.85 percent mortgage.
Meanwhile, the cost of insurance, maintenance, and property taxes on that home have jumped so much that 20 percent of people making over $150,000 a year are living paycheck to paycheck.
End the Fed
I believe I have made the case to end the Fed. Rather, the Fed made the case against itself.
This idea was a discussion focus on this blog and the Mises Institute in a series of recent posts.
Please see Fed “Playing With Fire” Take Two, Who Starts the Business Cycle? for a discussion of ideas and alternatives on ending or reigning in the Fed.
If a married couple are making 150k a year and living PTP then they’ve a spending problem. Putting aside divorces, which in this country are criminally lopsided against men, there’s something seriously wrong with this picture. It’s getting ridiculously expensive to live here, and as someone who is 62 and reaching the end of my rope in this country, it’s clear that I need to cash out and move overseas. I’m not interested in working till the day I die simply to feed the machine.
People are basically doing 2 things all wrong and 3 if they are men.
1 people presume upon the future. They assume that tomorrow’s economy will be just like yesterday and today. It won’t. Inflation, insurance, legal environment and a host other things are choking the economy more and more each passing day.
2 people don’t count the costs. The real costs, like insurance, taxes and maintenance.
and
3 men don’t figure on that sweet, loving innocent thing they married becoming a vicious monster in court that takes everything they’ve got and leaves them on the street with their wages garnished if they ever do make another dime.
– People are basically doing 2 things all wrong and 3 if they are men.
> Only 2 if Woman & 3 if Men, are doing things all wrong. Really, because I had it up to 6,347 wrong if Woman, and 6,403 if Men.
– 1 They assume that tomorrow’s economy will be just like yesterday and today.
> Anybody making that assumption is an idiot, Man OR Woman! It Never works like that, EVER!
– 2 people don’t count the costs. The real costs, like insurance, taxes and maintenance.
> These “ARE THE COST” people are counting, and it’s because These Are the issues. Government keeps raising Taxes, and Insurance has gone through the roof, and Every Man & Woman in America knows this, or there Harris and/or Biden… as They don’t have a clue!
– 3 takes everything they’ve got and leaves them on the street with their wages garnished if they ever do make another dime.
> Some Men are Fools, and so are some Woman, but what you refer to here, is simply called “A Prenup”, and all is well. You don’t have to be very smart to know this? If you “Earn It Together” then You are Both Entitled to 50%. See easy…
You obviously don’t understand how the legal system really works against men. Or maybe you intend to deceive others so that men will continue to fall into the modern marriage trap. Any sharp lawyer can defeat a prenup.
Only one done incorrectly. They are otherwise ironclad! Just ask all the Rich, who for the most part get it right, and they will “Happily” tell You!
Thank you Mish. The assumptions built in to the analysis and the conclusions are spot on. The only specious (and statistically unobservable) assumption was the B of A “moving due to climate change” variable. The conclusion that the Fed is the problem is correct. The Fed is like the doctor of old who harmed as many people as they helped in trying to remedy their illnesses. Sometimes the patient just needs to get well on their own.
The ads on this site are out of hand. I can barely read the articles any more because the pop-up windows (that don’t go away) are covering half the text.
Making 150 grand and living paycheck-to-paycheck = you’re an idiot and need a budget aka FIRST WORLD problems
Umm, or you’re a divorced male at 50 where you get half her debt, and she takes half your savings, alimony and child support.
being one of last boomers(age 63)
I have NO PENSION, limited SSI
OUR retirement is solely RENTAL income I’ve developed over past 20 years
but cost of maintaining is not cheap
38% increase insurance
20% increase property tax(theft)
rents not paid 15%
vacancy 15%
roof costs – up up and away
utilities – like food costs
and then when you finally get to end
master THIEF comes in —— I R S
and can’t sell unless give 1/2 away to master thief
Boomers are living paycheck to paycheck as they are receiving small reitrment pension benefits (relative to their previous working salaries) and are supplementing with retirement savings. This is as expected.
Another scenario are the folks still working as they do not have pensions. These would often be in lower paying jobs and again, supplementing with retirement funds.
One questionable data being presented: how can Gen Z be living paycheckcheck to paycheck in 2019? GenZ did not move out if their parents house in 2019. GenZ were too young in 2019 to be living on their own.
Leading edge of Z graduated high school in 2016, so those that did not go to college were working. Those in college might have had a part time job.
But you are right, that’s not a valid subset. Now in 2024 it probably is.
Suck it up Six Figure Losers. It ain’t the government’s fault. It ain’t the FED. It’s your own dam fault.
Bingo BANGO
“It ain’t the government’s fault. It ain’t the FED.”
Fault-Schmault…. Either way, a government and Fed which have by now succeeded in rendering America no wealthier than Zimbabwe, sure as heck doesn’t help anyone. Six figure incomes in Zimbabwe leaves you a loser as well. Life in third world dumps; ran and owned solely by the rankest idiots to ever inhale air; tends to suck, period.
Furthermore, they suck even for those so singularly indoctrinated and stupid, that they fall for the idiocy that Zimbabwe/America is still “the greatest country on earth,” or whatever jingoistic drivel is fashionable to mindlessly spew in their respective idiotistans at any given point.
Thats Gooood!
Now they get to feel a pinch of what the poor skilled ble colar men have felt all their lives.
Cry me a river from your 4000 sq ft mansion. 90% Trust Fund babies anyway , Never had a dirty fingernail.
🤣
What Does It Mean?
– The term ‘living paycheck to paycheck’ is a fairly frequently heard expression but can be somewhat nebulous and is not always clearly defined. Broadly, one can imagine it refers to individuals or households that regularly spend nearly all of their income, leaving little to nothing left over for savings.
> A perfect explanation in my opinion. (Also much referred to as “Living Day to Day” by the 30-45 crowd, from my personal experiences (my children’s age group). Not so much in a “Giving Up” sort of way, but more a “Factual Stance” I find it a bit odd, but prevalent none the less, from where I sit (I am also starting to see some of this amongst the 70-90 crowd (my parents age group), which I find even odder but, not nearly as prevalent, Yet!)
Who & Why:
– More surprising is that the proportion of households appearing to live paycheck to paycheck falls only slowly as incomes rise. > That’s called “Spending All You Get” so the amount isn’t the problem, it’s the spending. Hmm.. I wonder where they would get the idea for “That sort of Behavior “
– Some experts have given the youngest baby boomers, born between 1954 and 1964, a new name, “Generation Jones”, because they are so different from older boomers. > Interesting…
– Has anyone heard the name “Generation Jones?” > Not until this morning, AND I am one!!
– Regardless, boomers are at retirement age. The kids are gone. So why are boomers living PTP? > My personal experience (not me) from what I see and hear around me, is a few things. Some they complain about, and some they just don’t care. Some of the I don’t care, is because of what they see happening all around them, and figure if nobody else cares why should they. In fact I hear more and more, “Hey, it’s the young people’s Country now, so if they want to screw it up, take what you can, while you can, because they won’t be giving it to you” I paraphrase of course…
– One possible answer that BofA did not explore is Boomers have many assets and are prepared for the future. Besides, you can’t take it with you.> definitely the latter, and especially if the kids are all set already, or don’t exist!
– Other possible answers, such as being totally unprepared for retirement, are much more troubling. > I would guess this is the first set of Boomers with no 401K around, no online trading, financial advisors where not really a thing, except for the wealthy, and the stock market was a tad Taboo by the early Boomers IMO anyway.
The Housing Factor
– Note the Hidden Costs of Homeownership. > Property Taxes keep Rising, Maintenance Cost keep rising, Repairs are more costly, and more prevalent with age, Government Expenses coming out of your paycheck keep rising, S/S is Taxed a lot, depending on the circumstances, they set up! Many are actually “House Poor” as I was briefly (move things around but I could thankfully), and I know many others personally that are as well. Some is due to too Big of a house, and now they can’t afford to move, and people can’t afford to buy it if they could. A quagmire not easily resolved IMO…
Where / Dual-State Economy
– And so here we are. The Fed is directly responsible for a dual-state economy of the haves vs the have-nots. > 100% Agree, but are they not Responsible for most issues, problems, and headaches Americans feel each and everyday? Enough damn Rules that are BS or One Sided, so Stop Looking For Them and/or Making Them Up As You Go Along Fed!!!
– End the Fed > Exactly! Too bad it can’t be done by Presidential Decree or it could be the First Act! Not that I agree with dictate from Our President, because I don’t, so I understand, but it is needed, before we crush ourselves under are own weight…
– I believe I have made the case to end the Fed. Rather, the Fed made the case against itself. > True
Rather than blaming the Fed, maybe it is time to recognize we have a crony capitalist system that needs reform. Too much money goes to the C suite and not enough to everyone else.
That would be, because of “The Fed”
When will people become responsible for their lives and stop blaming others? When has Trump taken responsibility for a problem or admitted he made a mistake? NEVER. See the connection here?
“When will people become responsible for their lives and stop blaming others?”
Now if only those saps killed on 9/11 had learned to be responsible for themselves, instead of blaming others…..
A responsible person locks their doors to keep bad people from entering their home and taking their possessions. But locking your doors doesn’t keep the government tax agencies from stealing your livelihood.
While the FED certainly deserves its fair share of the blame, there are globalists and other forces working hard to create a one world dictatorship. They have weaseled themselves into every institution of society from the schools to the churches, to corporations and civic groups, the medical and insurance companies and to the direct seats of power in government from local city council level all the way to Washington, New York, London and even Brussels. This witchcraft is so ingrained and interspersed now that removing it can only be accomplished by Almighty God Himself.
There’s a larger story in that chart: the paycheck-to-paycheck numbers are almost all up from 2019. Yellow bars for 2024 are biggest of the bunch. Trend is not good and could impact election (in not voluntary behavior changes) as well as policy choices (if it represents a YOLO change in attitude).
Some consumers can’t consume enough to keep themselves satisfied. Women particularly value shopping as an emotional experience. When you de-link purchasing from emotional rewards, you spend less and feel better about your life.
The wealthy often get carried away with how much they can buy. Actor Nicolas Cage moved to Las Vegas from tax-heavy California because he was spending too much money to support a Cali lifestyle. Michael Jackson likewise was forced back into performing before his untimely death to support an excessively lavish life. These are only the tip of the iceberg.
Money is a tool, and treated as a tool, it can make life immeasurably better. But a broken philosophy of life will take you down the wrong road. It’s better to be middle class and viable financially than upper middle class and struggling to make your payments. (To read more of my writings, go to dark-dot-sport-dot-blog where the dots are periods.)
Every boy should be warned about the three L’s of destruction. leverage, liquor and ladies
and depending upon your age, that order changes lol.
At my age now, ladies are 3rd, actually 4th. Kids come about them now
Salaried people are salaried people. Most of them are young and they know how much money in their account consciously or unconsciously and they spend / waste completely. So its not relevant you earn 50,000 or 100,000.
When I was growing up, I learned to take responsibility for my own life. If things were not going well for me, it was my own fault; and it was time for me to do something about it.
I didn’t blame the government, the Fed, my parents or anyone else.
When did we become a nation of whiners, always looking for someone to blame for our own shortcomings?
When did we start believing that electing a politician would make our lives better?
Whatever happened to getting off your ass and working hard to make a better life? The typical American is now a candy ass whiner who seems to have lost this desire. Today, the only ones who seem to want to work hard for a better life are the immigrants.
That approach means you are ignoring serious political problems.
PapaD doesn’t vote, so he’s not concerned about political ups & downs for the most part.
Both of you make good points, though.
Yep. I focus on what I can do to improve my life rather than wasting my time on endless political bickering.
What happens is largely out of our control. Everyone can assume some control through personal responsibility. Health is available to everyone, but most assume no responsibility passing it off to doctors with pills and procedures. Give up NFL Sunday and ride your bike in the country-it’s good for the soul.
Correct. I am an exercise junkie. I work out regularly and run 20-30 miles per week. I focus on my health, wealth, family and friends. Though my reason for frequenting this blog is wealth, not health.
Sad to see people downvoting PapaDave, probably because they hate brown people and he said something positive about why immigrants come to the USA. Shame on y’all. He’s a solid American citizen, you should celebrate that.
I totally agree with Papa, and I just posted so I will answer you from “My Point of View”
We desperately need “More Accountability” and Less desire for others to come along and help fix things. We need more to look in the mirror , and to ask what “‘They Can Do”
Stop expecting Politicians to do your job, and things for You. They represent “The Country” so the decisions they make often times will have absolutely Zero to do with You OR for You. That’s called Government for the people. What we need is Much More “Personal Responsibility” IMO.
What’s wrong with that?
Well, people here complain about liberals nonstop. They seem to complain about everything that isn’t just the way they want it. It’s not as bad as Zerohedge but that stank is infringing on these comments more over time.
I was raised to be responsible, not take on unneeded debt (i.e. home mortgage ONLY), and to be accountable for my own life. I wish such good fortune on all the complainers, it’s a life better led.
Thats great. So when the secret agents come to haul you away to the FEMA prisons, you’ll probably get the part with the basketball courts, air conditioning and nice people to reprogram you to worship the coming global dictator. You probably won’t have to go to the small field portion with the patriots and those who can’t be reprogrammed where the guards take target practice before your body falls in a burn pit.
”
hey represent “The Country”
”
No they don’t.
They represent themselves.
And, indirectly, those who pay them the most for the only service they have ever rendered: Robbing, harassing, abusing, enslaving and; obviously; indoctrinating all those who do not pay them as much.
That’s it. All of it. Not one single one of them, are any, at all, improvement on absolutely nothing at all whatsoever. Just thieves.Just scum. Just useless and worthless. No exceptions.
I agree, many have turned into pathetic victims. What’s ironic is that I’m sure many here call liberals “snowflakes” when, in fact, conservatives exhibit just as many “snowflake” like tendencies as the liberals do. Hell, most people, regardless of political affiliation, do nothing but bitch and moan about someone or something anymore. It’s like being around a curmudgeonly old man 24/7. I used to be this way, then I came to my senses.
What does complaining about Trump or Harris do for you? How does it improve your life situation?
Do you want to operate under the idea that Harris or Trump must win for your life situation to improve, or do you want to operate under the idea that it doesn’t matter who wins YOU will make sure your life situation improves?
Which one of those two options puts the power in your hands?
The second option used to be the bed rock of the American way, now it’s nothing but whining and hopium that either Trump or Harris will deliver and make one’s dreams come true. SMH…..
“What does complaining about Trump or Harris do for you? How does it improve your life situation?”
It makes me feel better. In addition, I enjoy pointing out how ridiculous some people’s opinions are, and once in a blue moon, I hope to convince them that their opinion is wrong or skewed.
Our system gives the individual a voice, so I enjoy exercising my constitutional right. And obviously you do to with all of your Woodsie postings here on Mishtalk.
Cheers!
If complaining makes you feel better, good luck ever finding true happiness.
People feel the world owes them things that aren’t owed to them by anyone except their own blood, sweat, and tears. It’s the defrocking of Real Americans
Man Papa, you must hit just the right buttons some how, because many of your post that make sense, and are expressed factually, get many unexplained to Me down votes?
I suppose some of it, is that these people have been “Programmed” or “Lied to” by our (so called) Educational System, that “They Will” be taken care of. We are ALL Equal and will be taken care of as such! That is until Your NOT!!
I Agree 100% to Take Care of Yourself, and if extras come along, great, but “Don’t Expect Them”
Thanks Stu, Woodsie, Melvin.
I take pride in negative votes. No worries there.
Also, America is Still Great. And the reason is because we still have a large number of Americans who wake up each day and work their asses off to make a better life for themselves and those they care about. And in doing so, they make the country better. We need more of those folks and far few whiners and complainers.
I don’t care how Papa votes, so long as it’s true to himself and we know that is how he rolls. I respect your views on being responsible and always figuring out what we can do better as individuals, instead of wishing a nanny fixer upper government on us all.
Thanks Rando. Perhaps I will vote someday if I think it is worthwhile.
For all the people who vote: I applaud you all. Good for you. You are all “one up” on me there. I am being serious here. We are fortunate to live in a country where your votes are actually counted. And yes, I believe that they are all counted honestly.
I just prefer to focus my attention elsewhere.
Thanks for your hard work, but anyone who believes that we have honest elections in the United States is sorely deceived.
First: thanks for your compliment.
Second; Do you ever vote? And if you vote; why do you vote? If you truly believe that elections are not honest, then you should not bother to vote. Right? Since it won’t matter. I suggest you follow your statement to it’s logical conclusion and NOT vote. Don’t waste your time.
“America is Still Great.”
The Soft Bigotry of low expectations….
If ones standards are low enough, any old pond of raw sewage can technically be passed of as “great.”
NFL and wings yum yum
Regardless, boomers are at retirement age. The kids are gone. So why are boomers living PTP?
Have you seen the Joneses lately? Silver haired tykes with shiny new SUVs & sporty Jags. New bath & kitchen remodeling plus composite decks galore. The restaurants are packed to the hilt.
America crossed the 50% eating out for dinner line last year: more people eat out than at home for the first time ever, even as restaurants are the speartip of inflation.
The problem is, even as costs rise, peoples’ habits remain the same. It won’t end nicely.
Those with assets are riding the bubble – no need to save.
Those on the “die broke” approach, which is legitimate, are enjoying life while they are young enough to be able to.
The young need to save b/c they don’t have asset piles yet.
“America crossed the 50% eating out for dinner line last year: more people eat out than at home for the first time ever, even as restaurants are the speartip of inflation. ”
What are you trying to say? Certainly half the population isn’t regularly eating out for dinner – they simply can’t afford to. Perhaps providing a reference may elucidate your point.
Depends on where you live. I can see someone living in NYC living prp on 150k
Older people should spend or transfer wealth. Even with Medicare, end of life care costs can quickly eat through life savings before you get poor enough to qualify for Medicaid. Transferring assets earlier also avoids problems around determining mental capacity.
Strategically well-positioned boomers and older should have as few assets to their names as possible.
What is real estate worth if policies to slow immigration are enforced?
US citizens don’t have enough babies to maintain the population. Without immigration, the US would have the same $1 homes that you can buy in rural Italy and Japan.
Without immigration, inflation and all the other insane policies of the last 4 years, Americans would be able to own homes and have children again.
Most jobs will be replaced by robots in near-term coming years. Don’t need more people!
Toothfairy to the rescue!
And here I thought that the short-sighted luddites died out over a century ago.
Love the newsletter. Completely agree with the main point that the Fed have destroyed our World and are back in their workshop right now being worse than ever. One slight disagreement with the headline/presentation-just stating the obvious – a $150K household in NYC is not the same as a 150 K household living in Missouri or even Texas/Arizona, so the original study/underlying paper shouldn’t really be comparing across the country, or at least some kind of ‘Big Mac Index’ adjustment should be made. Point still taken- one would think you could save money on 150/ household. My point is that 150 isn’t very much in the big metros any more, and that’s before tax.
By the way is it a coincidence that 15 days before the election a mcdonalds outbreak of e coli in mostly red states? And right after trump did his ronald mcdonald routine?
Let the conspiracy theories rip!
Make sure to keep all evidence away from your hare-brained theories
Trumpo needs to start washing his hands after visiting the restroom!
Never heard of the Traditionalist generation. Is that the Silent Generation?
Well, that’s what happens when you do a 90% refi of your home 90% and then go out and buy $100K in new cars, RVs, vacations, etc.
Personally, my savings rate is about 40% of my take home pay. Hopefully, this will climb to 50%, when I pay off my $118K mortgage next January. My P&I for my home is about $628 a month.
As for homeowners insurance, I called Allstate trying to shop my car & home policies. I found out that Allstate has a 2% all peril deducible rate. So, if your house is insured for $400K replacement, then you’d have to pay the first $8K. But the annual premium was going to get cut by about 62%. I’d love to jump back on Allstate, but their auto insurance spiked 2 years ago, making it less competitive than my Geico (car) + Traveler’s (home) bundle. My auto premium with Allstate was going to be almost 2x my current Geico premium.
But I do plan to call Travelers soon & ask them if they have a similar 2% all peril policy. Fingers crossed!
Why is Scotty living paycheck to paycheck with $130k in retirement income before taxes?: 0% interest rates make finding any return in savings accounts pointless; bought bigger house that I charge rents for, but now have higher mortgage, insurance and prop taxes; more broke friends wanting to clean and mow for $; cash gifts to niece & nephew to keep their attention; past credit card purchases; need for roof ($24k) and boiler ($12k) fund to replace … ah, life in a country with static land and growing population …
Not sure where you bank but you’re missing out on 4-5% rates
Only with a 50k balance
Yes, you will need to set up a new savings account at a different bank (or brokerage) if you want to get 4-5% rates.
Just leaving your money inside your current bank’s walled garden is enabling them to commit Banker Robbery on you.
The accounts I know about all pay over 4.5%. None has a high minimum balance.
Suggest looking at Vanguard Cash Plus, CIT Bank and American Express.
Who believes these types of surveys?
Credit Card past due figures don’t lie….30 days past due is<4%.
https://fred.stlouisfed.org/series/RCCCBBALDPD30P
Yes, I live PTP and can’t afford whatever you are selling, so leave me alone.
As kids we played a game called “Monopoly” whenever we got together with family for holidays. The game is simple, you start with an avatar, roll the dice and move around the board. The objective of the game is to snap up as much properties as possible to become the main asset holder and turn every other player into a renter.
I loved playing that game and I loved winning it even more. Play it enough times and you begin to understand where the value is during game play. Get to know the players and they’ll be putty in your hands.
I lived paycheck to paycheck in my college years but soon after, I became an asset holder and learned to extract rent from others. I do that every day now so no PTP for me.
Forget the Fed, the clowns in congress and the clowns running for president and learn to play Monopoly. That’s the only real teaching you need in life.
By the way, Monopoly was created in 1902 but some people still haven’t learned a thing in all that time.
Great game, Monopoly. Pretty sure it came out in 1932, though.
Patented as Monopoly in 1935, originally created 1903 under a different name patented 1904
So you’re both partially right/close to one date or the other
“By the way, Monopoly was created in 1902..”
Yes. It was what The Fed was modeled after, 10 years later:
— Huge fresh print injections for whomever arbitrarily threw some dice numbers, or happened on a lottery ticket, letting them pass “goal”; in the process debasing everyone else.
— Bans on anyone else building a better/cheaper hotel on Boardwalk. For no other reason than entrenching whomever idiot arbitrarily landed there on account of a dice throw; and no doubt “reasoned” he must have been a “financial genius” for doing exactly the same thing everyone else above 2yo know they must do if their dice roll lands them in the same spot. IOW: Bans on competence outcompeting incompetence; heck bans on any competition whatsoever. In order to ensure all wealth ownership is instead dictated solely by debasement, dicerolls and lottery tickets. The Fed’s America indeed.
Only difference being: Monopoly’s rules are fixed forever. It’s a Theocracy. Which, despite what dumb indoctrinateds are told to mindlessly regurgitate, means it works better than “democracy.”
The Fed’s America, OTOH, is Monopoly, but with the “democracy” twist: The one who can afford the most money for lobbying, gets to change the rules, in order to ensure everybody else’s properties, dicethrows, breaths inhales etc. gets taxed, with the proceeds accruing to him.
Of course, even as late as 1902, Parker Brothers recognized that something tgatr stacked and trivially idiotic, was a no go. It took 10-15 more years, for stupidity to become so entrenched in the once-was :and-of-the-Free, that The Fed and its illiterate gaggle of progressive backers, were no longer able to even comprehend something THAT obvious.
And from there: It has only gone one way: Straight down.
—Now don’t I sound like a fun guy to have over for an afternoon of boardgames……
“Has anyone heard the name “Generation Jones?””
Yes, I’m in it. There is a Wikipedia page on it.
Basically if you hit the job market after the 1973 oil shock you had a very different experience than the earlier Boomers.
Most of the Jonesers who did get jobs with pensions had them cancelled through mergers, bankruptcies, or reorganizations. Even if you had a partial pension most plans gave you bupkis for the first five years of service, somewhat more for the next five years, etc. Hence the great push at reorganization time to push out anyone who was about to move up to the next increment.
They also have a reddit sub for Gen Jonesers.
My guess is zip code or region will play a role if making $150K per year per household and they are not saving money. Also, are both spouses working for an employer? Is one spouse the only income earner? Do they have employer provided healthcare coverage? How many dependents?
And given that many households today are not the 80s version, how many adults and children are living in a household earning $150K per year can factor in living paycheck to paycheck.
I don’t know how much of this is an economic problem versus a living-within-your-means problem.
I have it all as “a living-within-your-means problem.” The Stupidity of the Programmed masses and the love of money, debt and possessions which possess the lover. Satan laughs. I have the End of the US as near, primarily because of debt, though there are numerous other reasons that are rooted in the 1960s. I remain lost in the ’50s (Ronnie Milsap). ☮️✝️
Home & auto insurance as well as property taxes are major drivers of people’s inflation after you factor in the effects of food & gas. Home insurance in places like Florida has become crazy expensive. It’s singlehandedly causing significant parts of the coastal Florida housing markets to unwind.
So a major part of people’s inflation hit is coming from 3-4 things you have to pay with little or no substitution alternatives.
Here in GA it seems like insurance is becoming very uncompetitive as well. Progressive has great car rates, but they are extremely picky as to what homes they insure. My guess they don’t insure much of anything below $600-700K in GA. Their best 3rd-party home quote for my dinky house was $2,600 a year which is 2.6X what I’ll pay this year with Travelers.
Be that as it may, your point about living beyond your means is very prevalent, I’m sure.
aka entirely a “First World problem” as the colloquialism goes
People in their prime age have to spend on their house, two cars, schooling, colleges, divorce settlement, medical expenses, food for a family, restaurants and travel…most of it is inelastic. The higher they make, the higher their taxes, filling the gov coffer.
Restaurants and travel … inelastic?? … Houston, we have a problem.
College is elastic too … try Univ of <your home state> with good grades. Poor grades gets the two-year college named after your nearby town.
Food is expensive if not careful and takes time to plan … stew and spaghetti weekly.
$150,000 ain’t what it used to be.
I’m never going to know, as a Limey in the UK I earn a third of that and never live PtP.
Just stop buying sh*t.
“That chart struck me as odd. But perhaps not. Zoomers and Younger millennials are priced out of a home and forced to rent.
Then again, anyone with a mortgage should have been able to refinance at 3 percent or lower, putting extra money in their pockets every month.”
If you’re seen as having some wealth or a high income, you may attract the crisis-bailout requests of children and family, or you may be paying for multiple childrens college education. Often, larger incomes develop a multiplicity of semi-dependent relationships.
The cohort is too large…..the oldest ones could be parents of the youngest.
Just barely. Age of consent was 17 for girls, so it could happen.
1946-1964 is 18 years. That’s roughly 1 generation so it seems right to me.
That is the basic premise of a generation (any generation) as they are typically 15-18 years in length, the oldest can sire the youngest of any of them.
Sub-generations aren’t unique to the ‘boomers’ either.
House mortgage. Check.
Fully loaded car or truck financed. Check.
Latest TV gizmo on credit. Check.
Holiday like the Jones’s on credit. Check.
Credit tightening due to inflation due to credit splurge. Check.
Financialized-to-the-hilt ECONomy on knife’s edge. Check.
My father, in 1950, bought a 1125Sq Ft home, 3 Bedrooms, two bathrooms with a full basement, for $3200. It was on sale. Today, that home would be worth over $225,000. I will go out Zillow to look. Leaving page….$293,800! FOR SALE!
It is my exact home in Illinois, still standing and looks the same as when I was a kid, except for the new Paved Driveway.
UNREAL!
That home would be worth $1 million + here n the SF Bay Area.
Now that is UNREAL!
That’s roughly 6.3% gain a year if they get that much for it.
1.063^74 = 91.93
3200*91.93 = 294178
Paycheck-to-paycheck is a personality disorder, disconnected from income level. This includes a portion of the very low income households who have chosen to work just enough to pay the bills rather than working full time. At the other extreme are misers — another personality disorder that includes people at extremely high income levels, especially the 0.1%.
The misers never starve and leave their kids MILLIONS!
Not at all. I saved all my life, even some precious metals talked about by Mish back in the day, but you know what destroys things? Living paycheck-to-paycheck?
A divorce in Ohio when you’re ex is a spender, and you’re a saver?
You’re destroyed… at mid-life
Though things are looking up here in W PA now.
“Generation Jones”?
Yeah whatever. Found here.
https://www.beresfordresearch.com/age-range-by-generation/
*We increasingly break up Boomers into two different cohorts because the span is so large, and the oldest of the generation have different sensibilities than the younger. In the U.S., Generation Jones (Boomers II) are just young enough to have missed being drafted into war.
But 80% apparently are not. Woe are the other 20% [shrug]