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So, it looks like renting your whole life is a stupid decision, then. Makes sense. If you buy a house, eventually, it gets paid off. Once a retirement/limited income deal rears it's ugly head, you need to have your $hit paid for, so you can still live in the situation to which you've become accustomed. Easy to spot a product of the public school system...
It's not true for many city residents. My friend lived in a rental controlled apartment which was actually better than a house - no property taxes.
In Westchester, NY my property taxes began at $12,000 a year and increased to $16,000 in a decade. And, that is cheap for my area. People in lower Westchester pay over $30,000 a year in property taxes. It's the same for Illinois, Connecticut, New Jersey, Wisconsin, etc.
So, yes these people have some saving in their homes. However, it's only their house as long your the taxes are paid.
I've purchased/sold five houses. Some homes were good investments - no major repairs, purchased at a low price, and when the market went up - sold at a profit. I also brought a home in 2007 which promptly dropped in value in 2008 and needed constant repairs. If I had taken my previous real estate profits and invested it in the Stock Market, I would have made significantly more money. Real estate is a mixed bag.
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Easy to spot a product of the public school system
Sure is.
Last edited by YorktownGal; 07-02-2022 at 06:50 AM..
If you are lucky to live along enough, then inflation/col is out of your control.
Disagree. If one budgets for inflation and keeps that budget with inflation factored in when inflation is low, they come out ahead in the long run. But if a person foolishly believes inflation wont hit or their fixed benefit payments will always keep up with inflation or it's going to remain at this lower level from now on, that's just poor financial planning.
One of our buildings is located in a property tax capped area to stem the runaway tax hikes based on over inflated value. Property taxes on luxury high-rise rentals can only rise to a maximum level year after year based on a increase government service cost. Some years it reached the top, others in-between. I have the PMC budget for max tax increase each year. So when tax increases were low, more money for discretionary purposes. When tax increase hit the top, didn't have any impact on the budget.
Of course there now comes unexpected high inflation in other areas. That now becomes the crux of my distain for these entitlement discussion for a right to housing/roof over my head arguments. I have to make a choice, keep rents as is and lower the standard of the building or raise rents to cover the cost. If my tenants base is 100% capable of absorbing the maximum increase allowed by law, (regardless how shockingly high it may seem to the poor), why don't I have the right to raise it and why doesn't my tenants have the right to freely pay it without being made into some evil entity by those who haven't risen to this level?
Disagree. If one budgets for inflation and keeps that budget with inflation factored in when inflation is low, they come out ahead in the long run. But if a person foolishly believes inflation wont hit or their fixed benefit payments will always keep up with inflation or it's going to remain at this lower level from now on, that's just poor financial planning.
Okay - so when my father made $26,000 in the late 1960's that was considered an upper middle class income for a family of four. I remember my mother's weekly food shopping came to $80 per week in 1968. I spend $80 on two days food for two people in 2022.
My dear friend's husband was a New York City Policeman. I guarantee he didn't make as much as $26,000 a year in 1968.
If my father saved 10% of their gross income a year. On a $26,000 salary, the amount would be $2,600. It's nothing in terms of today's dollars. There was no way my father could have saved enough money for retirement - end of story. His wealth was sheer luck from good years of the stock market.
So your basic argument is
(1) My dear friend's husband did not invest in the stock market, BECAUSE - before 1974, there were no IRA retirement accounts.
(2) Her bank saving did not keep up with inflation - due to the interest rates set by the Federal Reserve during her retirement years.
(3) Her husband was a NYC policemen with a lower salary.
How was her poverty her fault?
I remember my grandmother sold her stock six months before the stock market crash of 1939. After the crash, they brought a two family house. It was almost new and had been forecasted on. The house generated additional income.
As most men had a professional shave before job interviews. Great because my grandfather owned a barber shop. His shop earned more money during the Great Depression. However, when WWII broke out, his business lost out from the number of men shipped out.
So my grandparents were lucky that they sold their stock before the crash. They were lucky there were so many almost new houses foreclosed on. They were smart to have brought a two family home to generate income. So much of their fortune came from luck. Until the early 1970's, my grandfather as a small business owner never had a pension and inflation ate their saving.
Really, I don't see what my dear friend or my grandmother could have done differently.
I'm a boomer. Yes, we worked hard for our retirement money We made four moves across the country for my husband's career. No joke, it was so exhausting, I doubt I would have done over again.
However, we were just plain lucky that the government made IRA's which made investment easy. We were just plain lucky the S&P 500 has gained in 40 of the last 50 years and the return after inflation was 7%.
For fun, search baby boomers lucky generation. There are dozens of articles on "Why baby boomers are the lucky generation" or “Lucky Generation”? How the baby boomers have prospered."
There is a mixture of luck and hard work in everyone's life. If someone like (OP) PhinneyWalker's friend is about to be homeless, then it behoves us to understand how upsetting and how hard it is for so many people.
There but for the Grace of God, I go!
Last edited by YorktownGal; 07-02-2022 at 09:27 AM..
Wow. It was a middle class area with second generation Americans vs poor immigrants. The immigrants played loud music into the early morning, threw trash in the street, and increased crime and drugs. Better?
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There is no way to account for an increase in inflation from 1960's to 2000.
If you are lucky to live along enough, then inflation/col is out of your control.
You could have said “went from a nice neighborhood to a not-so-nice one.” German or Irish means nothing. Where I grew up, there were large areas ruled by thuggy Irish and Italian descendants. Skin color is irrelevant to “niceness.”
......If you are lucky to live along enough, then inflation/col is out of your control.
If you are old enough to retire in this country, you know darn good and well about inflation and what it does to both salaries and the cost of living. If you have any thought process going on at all, you have at least made your best effort to account for inflation in your retirement plans. Inflation is not some great big unexpected surprise disaster.
Wow. It was a middle class area with second generation Americans vs poor immigrants. The immigrants played loud music into the early morning, threw trash in the street, and increased crime and drugs. Better?
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There is no way to account for an increase in inflation from 1960's to 2000.
If you are lucky to live along enough, then inflation/col is out of your control.
Respect. It is a matter of respect for oneself, one's community, and one's adopted country. Too many immigrants today lack respect. I totally understand what you are saying because I have witnessed it over and over again.
Anyone who wants to read a very even handed, knowledgeable, and well written authority on this sort of thing should read Mexifornia: A State of Becoming by Prof. Victor Davis Hanson. You should be able to find a copy of it at your local public library.
Okay -........My dear friend's husband was a New York City Policeman. I guarantee he didn't make as much as $26,000 a year in 1968.
.....How was her poverty her fault? ......
I'm sorry. I missed the part where she was wheel chair bound and had a severely under par intellect. Sad for her that she was never able to work and qualify for SS or able to put anything aside for retirement. If she is so badly handicapped, I am surprised she doesn't get disability and food stamps that would at least help with the expenses. She already has some unlucky landlord who is required by law to pay a big chunk of her housing expenses for her.
She counted on a husband to provide 100% of her living for her, so bad luck that he died and left her to live with no one providing for her and she wouldn't take up the responsibility of doing it for herself.
I have zero sympathy for women who sit on their butts expecting the rest of the world to take care of them and feed them like they are a crippled baby bird. This isn't 1709 any more. Woman can and do work and they can and do own property and own businesses, and own their own investments and have theior own retirement funds..
I'm sorry. I missed the part where she was wheel chair bound and had a severely under par intellect. Sad for her that she was never able to work and qualify for SS or able to put anything aside for retirement. If she is so badly handicapped, I am surprised she doesn't get disability and food stamps that would at least help with the expenses. She already has some unlucky landlord who is required by law to pay a big chunk of her housing expenses for her.
She counted on a husband to provide 100% of her living for her, so bad luck that he died and left her to live with no one providing for her and she wouldn't take up the responsibility of doing it for herself.
I have zero sympathy for women who sit on their butts expecting the rest of the world to take care of them and feed them like they are a crippled baby bird. This isn't 1709 any more. Woman can and do work and they can and do own property and own businesses, and own their own investments and have theior own retirement funds..
As I posted earlier:
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A very dear friend died in the mid-90's. She was married to a police officer and had been a widow for fifteen years. She never had children. She was pretty much alone. By the time she died, she was effectively penniless.
Her saving grace was her rent controlled one bedroom apartment. It was a nice prewar building. The NYC apartment was in a nice German/Irish neighborhood (1950's) which changed to not so nice poor immigrant neighborhood.
She was frugal, person who lived thru the Great Depression. She never lived in a gated community, own a car, or a business or any luxuries.
Secondly, Social Security benefits are calculated based on lifetime earnings. Salaries in the 1960/1970 were much lower than today thus, her social security was minimal. I don't know how long she worked, but she came from a time when social norms were very different.
You could have said “went from a nice neighborhood to a not-so-nice one.” German or Irish means nothing. Where I grew up, there were large areas ruled by thuggy Irish and Italian descendants. Skin color is irrelevant to “niceness.”
I never mentioned skin color or from what country - what I said was " It was a nice prewar building. The NYC apartment was in a nice German/Irish neighborhood (1950's) which changed to not so nice poor immigrant neighborhood."
If you are old enough to retire in this country, you know darn good and well about inflation and what it does to both salaries and the cost of living. If you have any thought process going on at all, you have at least made your best effort to account for inflation in your retirement plans. Inflation is not some great big unexpected surprise disaster.
Come on, "The dollar had an average inflation rate of 3.76% per year between 1960 and today, producing a cumulative price increase of 887.49%." It is almost impossible for a middle class person to deal with a 887.49% increase in inflation .
I remember when gas was 39 cents per gallon in 1970. Gas is $5.00 per gallon now. It's an inflation factor of 780%.
If we have similar inflation rate (as 1970 to today) whereby gas goes up by another 780%, then today's $5 a gallon of gas will cost $3,900 a gallon.
Can you plan for a $3,900 gallon of gas?
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