78% of Americans live paycheck to paycheck

[mattee2264]

Eldad: might be a reverse correlation. Generally if a man is a good provider type he is more likely to get married and stay married and the same financial stability and sense of responsibility that attracted his wife is going to contribute to his continued financial success in life. 

 

[changegonnacome]

On 5/22/2024 at 1:57 PM, Gregmal said:

The biggest benefit of the mortgage is it allows the common man access to an asset they’d almost never otherwise be able to afford.

 

The biggest benefit of a mortgage is that it allows the common man to 'get short' the US dollar with nine times leverage or even more in some cases*......and given you were going to have housing costs anyway.....you pretty much also get to live inside the trade for an incrementally small amount, if anything....while the outcome over the 30yr trade is assured (~2% inflation target that is likely to be missed to upside).....IBKR is very generous to me but it has never provided me a place to stay while I hold a short or long trade!

 

* Fannie/Freddie loans with 3% down/97% LTV are just the best slow moving train ticket out of poverty for folks that I'm aware.

[Eldad]

55 minutes ago, mattee2264 said:

Eldad: might be a reverse correlation. Generally if a man is a good provider type he is more likely to get married and stay married and the same financial stability and sense of responsibility that attracted his wife is going to contribute to his continued financial success in life. 

 

Could be. Also, pretty obvious that 2 is stronger than 1 and that being on a team with someone you love is going to make you both better. 

[rkbabang]

16 hours ago, Parsad said:

 

There are definitely many legitimate people who do need help out there...both in North America and around the world...including the disaffected and disenfranchised. 

 

I'm just saying that there is some truth to many people not taking responsibility for themselves or at least managing their resources better...especially if they are earning at least the average family income or better.

 

Cheers!

 

Absolutely, but it takes work to make sure your time and/or money goes to the right place though.  It's like when you try to sell something on FB or Craigslist and get these sob stories about why you should just give the item away to someone.  If you actually believed these stories you would give the item away, but you know that they are likely just scammers looking for something for nothing.   The welfare/charity space is full of people looking to get something for nothing.  Both the recipients and the organizations claiming to help them.   My great-aunt was a nun who went on charity missions to Haiti and we used to donate money to buy food and shoes for her missions.  This was the most bang for our charity buck for many years.  We knew the money was going to the people actually in need.  Unfortunately she doesn't do this anymore (she's in her 90's now).

 

[rkbabang]

16 hours ago, mattee2264 said:

Eldad: might be a reverse correlation. Generally if a man is a good provider type he is more likely to get married and stay married and the same financial stability and sense of responsibility that attracted his wife is going to contribute to his continued financial success in life. 

 

 

There is likely a lot of that, especially in marriages where there is only 1 income.  But most families have 2 incomes. Two people with 2 incomes pooling their resources is likely much better than 1 person with 1 income trying to go it alone.

 

[TwoCitiesCapital]

1 hour ago, rkbabang said:

 

There is likely a lot of that, especially in marriages where there is only 1 income.  But most families have 2 incomes. Two people with 2 incomes pooling their resources is likely much better than 1 person with 1 income trying to go it alone.

 

 

It's going to be true of 2 income families as well. The majority of women value this in a man and WANT a man that earns more than them (not all - but more than half for sure). Men on the other hand? Don't seem to care near as much about the stability/earnings capacity of their wife. 

 

The men who get married are far more likely to have above median incomes than below median. The same may NOT be true for women where I actually think it's possible women with above median incomes are LESS likely to be married. 

 

Therefore two income families will typically be a man, and a women, both earning money. The men will have fat tails on the right side of the probability  distribution. Hers will be more of a random distribution, but likely slightly skewed to the low end of the income distribution. 

 

 

[rkbabang]

18 minutes ago, TwoCitiesCapital said:

 

It's going to be true of 2 income families as well. The majority of women value this in a man and WANT a man that earns more than them (not all - but more than half for sure). Men on the other hand? Don't seem to care near as much about the stability/earnings capacity of their wife. 

 

The men who get married are far more likely to have above median incomes than below median. The same may NOT be true for women where I actually think it's possible women with above median incomes are LESS likely to be married. 

 

Therefore two income families will typically be a man, and a women, both earning money. The men will have fat tails on the right side of the probability  distribution. Hers will be more of a random distribution, but likely slightly skewed to the low end of the income distribution. 

 

 

 

 

I agree with everything you said.  There are always exceptions though.   On my street (ave. house value ~$900K-$1.2M) there are 3 families with only 1 income where the man stays home with the kids and the wife works and supports the family.

 

[changegonnacome]

2 hours ago, rkbabang said:

On my street (ave. house value ~$900K-$1.2M) there are 3 families with only 1 income where the man stays home with the kids and the wife works and supports the family.

 

Curious what the denominator is here?....three families running the house on one income where its the woman securing the income....is it like three out of 10 such single income families just wondering what % this represents.

 

Also when you look into the mans eyes - do they seem hollowed out to you

[DooDiligence]

4 hours ago, rkbabang said:

 

 

I agree with everything you said.  There are always exceptions though.   On my street (ave. house value ~$900K-$1.2M) there are 3 families with only 1 income where the man stays home with the kids and the wife works and supports the family.

 

 

Good for him. I hope she's hot too.

[thepupil]

4 hours ago, rkbabang said:

 

 

I agree with everything you said.  There are always exceptions though.   On my street (ave. house value ~$900K-$1.2M) there are 3 families with only 1 income where the man stays home with the kids and the wife works and supports the family.

 

#lifegoals (though maybe I’ll be earning some carry every now and then)

[Longnose]

There was a time in my life where I said. I could be a stay at home dad.  Now that I have kids (which i love). I'm 100% sure I could not be a stay at home dad.

[RedLion]

19 minutes ago, Longnose said:

There was a time in my life where I said. I could be a stay at home dad.  Now that I have kids (which i love). I'm 100% sure I could not be a stay at home dad.

I figured it out around week 3 of Covid. 

[rkbabang]

38 minutes ago, changegonnacome said:

 

Curious what the denominator is here?....three families running the house on one income where its the woman securing the income....is it like three out of 10 such single income families just wondering what % this represents.

 

Also when you look into the mans eyes - do they seem hollowed out to you

 

It's like 3 out of 30.   10% has got to be an anomaly.  My wife and I talk about how weird it is all the time.  2 of the wives are Doctors and 1 is a lawyer.   In 2 of the cases the wives are far more masculine than the men.  If I had to physically fight either the husband or the wife, I'd fight the husband no question.  

[rkbabang]

29 minutes ago, Longnose said:

There was a time in my life where I said. I could be a stay at home dad.  Now that I have kids (which i love). I'm 100% sure I could not be a stay at home dad.

 

Absolutely.  I just couldn't have done it.   I think the same thing whenever I see a male elementary school teacher.  How on earth do you spend the day in a room with 30 kids? 

[rkbabang]

I read somewhere that there are now more females graduating from college than males.  I wonder if this will be more common in the future. If the wife makes more being a medical specialist or something then the husband will stay home with the kids.

 

[TwoCitiesCapital]

9 minutes ago, rkbabang said:

I read somewhere that there are now more females graduating from college than males.  I wonder if this will be more common in the future. If the wife makes more being a medical specialist or something then the husband will stay home with the kids.

 

 

Or... it'll be entry and mid-level college educated jobs displaced by AI, inordinately impacting Gen Z women, while physical labor/construction/building is unbothered and remains dominated by men. 

 

Hard to tell how that one plays out. 

[Jaygo]

5 hours ago, TwoCitiesCapital said:

 

Or... it'll be entry and mid-level college educated jobs displaced by AI, inordinately impacting Gen Z women, while physical labor/construction/building is unbothered and remains dominated by men. 

 

Hard to tell how that one plays out. 

This is my thesis for a coming baby boom. AI will render many women dominated jobs obsolete and the economic boom will fall to the the trades. Thus men with more cash and women having more babies. 

[Cigarbutt]

Interesting.

Going back to one aspect of the thread, why 78% are not saving...

The lack of saving for the bottom 90% is a fact and this trend has been worsening.

Apart from evolutionary, individual weakness, gender issues, social media etc, any other explanation?

-----) The atypical animal spirit of the typical American consumer?

Purchasing power has been increasing but there has been a significant slowdown in disposable income growth. Present consumption has been maintained by lower saving at the individual level (bottom 90%) and by higher government debt.

Going through the pandemic, the US has been a relative outlier with an extraordinary debt-financed stimulus (including printed money) and with the consumer spending that excess money and lowering savings rate (driving the consumer economy higher, domestic and international).

One has to wonder if this lower income growth is not behind the unusual resentment and anger displayed by the bottom 90%. People ('We') are getting ahead but not as much as before and not as much relatively.

A potential side effect is that real GDP growth used to require a log adjustment on the Y-axis in order to transform the exponential curve into a linear one:

Not any more. Note: a linear curve here means decreasing rates of growth:

Why?

Potential unknown unknow but one has to wonder about the crowding out effect (controversial topic , i know). Lower national savings, even if slightly mitigated by foreign savings, means, by definition, lower investments and, absent a productivity miracle, means lower growth going forward. Of course that doesn't mean stocks won't do well but perhaps something to take stock:

For the bottom 90%, some commentators have suggested that there may be a reconciliation to be made between expectations and reality.

[Luca]

13 minutes ago, Cigarbutt said:

Interesting.

Going back to one aspect of the thread, why 78% are not saving...

The lack of saving for the bottom 90% is a fact and this trend has been worsening.

Apart from evolutionary, individual weakness, gender issues, social media etc, any other explanation?

-----) The atypical animal spirit of the typical American consumer?

Purchasing power has been increasing but there has been a significant slowdown in disposable income growth. Present consumption has been maintained by lower saving at the individual level (bottom 90%) and by higher government debt.

Going through the pandemic, the US has been a relative outlier with an extraordinary debt-financed stimulus (including printed money) and with the consumer spending that excess money and lowering savings rate (driving the consumer economy higher, domestic and international).

One has to wonder if this lower income growth is not behind the unusual resentment and anger displayed by the bottom 90%. People ('We') are getting ahead but not as much as before and not as much relatively.

A potential side effect is that real GDP growth used to require a log adjustment on the Y-axis in order to transform the exponential curve into a linear one:

Not any more. Note: a linear curve here means decreasing rates of growth:

Why?

Potential unknown unknow but one has to wonder about the crowding out effect (controversial topic , i know). Lower national savings, even if slightly mitigated by foreign savings, means, by definition, lower investments and, absent a productivity miracle, means lower growth going forward. Of course that doesn't mean stocks won't do well but perhaps something to take stock:

For the bottom 90%, some commentators have suggested that there may be a reconciliation to be made between expectations and reality.

Is there that much disposable income for the bottom 80% to save? I mean, if you look at the median salary of 60k USD a year, housing prices, rent prices, health insurance and possible medication/illness expenses, basic living expenses, some fun activity with family, etc? If they take out a mortgage now the interest is insane too so there is even less possibility to save anything. Is it that complicated to understand that salaries are just not high enough to save significant amounts after living a reasonable lifestyle with the median salary? GDP per capita, GDP per person etc are all meaningless numbers. What matters is which cashflow reaches the worker and not how much the rentier class makes with increasing rents, charging absurd amounts for health insurance, reshuffling homes at higher prices etc that all gets counted as GDP but is unproductive income

Edited May 26 by Luca

[Luca]

Certainly, this board is not representative of the average worker because they don't have the time to read 10ks or do not have the education to do so, they have kids at a reasonable healthy age of 25-30, and probably mommy stays home for a while maybe, then if they are lucky and have some capital they can buy a house otherwise you will just be renting forever looking at rental prices for a family of 4-5...and then you spend some money with your kids eating out, going into parks or whatever, buying little jonny lego toys and then the salary is gone, surprise! 

 

 

 

 

Edited May 26 by Luca

[james22]

1 hour ago, Cigarbutt said:

The atypical animal spirit of the typical American consumer?

 

 

That's the best spin on it, that consumers are simply pursuing the American Dream.

 

Their spending evidence of their confidence in certain opportunity.

[nsx5200]

1 hour ago, Luca said:

Is there that much disposable income for the bottom 80% to save? I mean, if you look at the median salary of 60k USD a year, housing prices, rent prices, health insurance and possible medication/illness expenses, basic living expenses, some fun activity with family, etc? If they take out a mortgage now the interest is insane too so there is even less possibility to save anything. Is it that complicated to understand that salaries are just not high enough to save significant amounts after living a reasonable lifestyle with the median salary? GDP per capita, GDP per person etc are all meaningless numbers. What matters is which cashflow reaches the worker and not how much the rentier class makes with increasing rents, charging absurd amounts for health insurance, reshuffling homes at higher prices etc that all gets counted as GDP but is unproductive income

I don't buy that narrative, as described by the typical left, in whole.  If a janitor with sub average wage can save and invest to have a net worth of 8 mil at the end of the run way, I think the the majority of the population can find ways to save, even a couple dollars a paycheck to slowly bootstrap themselves out of a situation.  (yes, extreme frugality is, IMHO, like saving sex for when you're old, as Buffet would describe it.  In the case of the janitor, it may be like saving sex for after death).

 

https://www.ramseysolutions.com/retirement/the-national-study-of-millionaires-research  Outside of the high wage types (CEO/lawyer) typical millionaire is your everyday CPA/engineer/teacher.  What do they really have in common: financial knowledge and willingness to grind, which essentially is deliberate delayed gratification.  IMHO, the ability to fight all the forces to get you to spend and actually save is a skill that must be learned, and honed over time.  If I met my younger self today, I would admonish my younger self for a lot of the unnecessary spendings that was done (but would give my younger self a thumbs up for willingness to grind).  The power of compounding outweighs minor financial mistakes. 

 

I read somewhere that language provides the framework in which the mind thinks.  A language like Chinese has less focus on time, so Chinese speakers are forced to consider the past, present and future, whereas a language like English with clear delineation for the past, present, and future only considers one of those three states.  So a English speaker will typically think in the now, and not consider their future self, and thus affecting their default savings, which I think shows up in the difference in savings rate.

 

Edited May 26 by nsx5200

[Luca]

7 minutes ago, nsx5200 said:

I don't buy that narrative, as described by the typical left, in whole.  If a janitor with sub average wage can save and invest to have a net worth of 8 mil at the end of the run way, I think the the majority of the population can find ways to save, even a couple dollars a paycheck to slowly bootstrap themselves out of a situation.  (yes, extreme frugality is, IMHO, like saving sex for when you're old, as Buffet would describe it.  In the case of the janitor, it may be like saving sex for after death).

 

https://www.ramseysolutions.com/retirement/the-national-study-of-millionaires-research  Outside of the high wage types (CEO/lawyer) typical millionaire is your everyday CPA/engineer/teacher.  What do they really have in common: financial knowledge and willingness to grind, which essentially is deliberate delayed gratification.  IMHO, the ability to fight all the forces to get you to spend and actually save is a skill that must be learned, and honed over time.  If I met my younger self today, I would admonish my younger self for a lot of the unnecessary spendings that was done (but would give my younger self a thumbs up for willingness to grind).

 

I read somewhere that language provides the framework in which the mind thinks.  A language like Chinese has less focus on time, so Chinese speakers are forced to consider the past, present and future, whereas a language like English with clear delineation for the past, present, and future are only consider one of those three states.  So an English speaker will typically think in the now, and not consider their future self, and thus affecting their default savings, which I think shows up in the difference in savings rate.

 

Sorry, since when is an "engineer" somehow representable for the average worker? 8m net worth for a janitor? I am jealous of your worldview, people just need to buckle up, system works wonderful and you only need to stop buying your Starbucks coffee! Easy! 

[Luca]

I think that 95% of the board thinks that getting wealthy is as easy as you described (janitor can make it to 8m), people who are not wealthy just spend their money on useless junk and its their fault! Why does this thread even exist? To reconfirm your opinions and circle jerk on the dumb fucks that cant save? xD

Edited May 26 by Luca

[cubsfan]

3 hours ago, Luca said:

Certainly, this board is not representative of the average worker 

 

 

I think that's true, because this board is populated by passionate committed individuals who have figured out how to get ahead.

 

In most cases, the average worker would never consider working a second job or going to night school. In the "average" corporation, if you work 10% more hours - you likely make 40% more than the your "average". You see it all the time, especially in America. It's certainly true in sales, where I grew up. In general, the guys that sacrificed the most (in terms of time & effort) blew away their colleagues. It's going to be the same in many careers - if the company you work for doesn't recognize it - there are 10 other companies that would want you. I always worked weekends early in my career - some guys thought I was crazy, some were jealous - I just didn't care as I was out to make a lot of money. 

My father never came to any of my sports activities when i was young, only a few games in college. Dad was always working. He wasn't any genius - he always said you could outwork people. I didn't really get it until I graduated from college.

 

The opportunities in the US are tremendous, even today - especially in the tech business, those opportunities are off the charts. I'd encourage any young "naysayer" to read a book like Outliers.

 

No shortcuts, no easy way, only commitment.

Edited May 26 by cubsfan