A friend of the blog writes:
This thread!
I read it and think back to my own woes 20 years ago after I graduated from college. People were being laid off in my chosen field, so there were no jobs for new grads. Some of my cohorts refused to take jobs that they were also qualified for, but with way less pay. Not me. I took a low paying job, worked a bit, went to my manager’s boss, showed him my resume, talked about my skills. He looked up my recent review and gave me a raise. I then added two other part time jobs that were actually in the field for which I had a degree. Eventually, one of those became full time. And eventually, I became a manager.
I am so struck by how many of my cohorts, and most of today’s millennials, think promotion, good pay, etc, all happen immediately. It is something you work to, you demonstrate your worth, demonstrate your willingness to work, then pay happens. Then promotions happen. The cohorts that I know who wouldn’t work for less pay, lesser jobs are still mostly not working full time, still complaining that life is unaffordable.
My parents are the Silent Generation, so I think they instilled this in me. I am generally thought of as not an optimist, but I have to believe that the children of millennials will rebel against their parents and actually get back to work, show much better work ethics.
After college, it took me seven years and a career change to earn over $20K a year (after inflation, probably 35ish today). It was because of choices I made – going into an industry that was awful for entry-level wages even before it died – and I knew it at the time. Figured it was worth it for a shot a the big time.
I think kids today figure the big time will come to them…
^48k is probably the tax credit subsidy phase out for a single person under Obamacare right… Is it worth managing your income to below 48k just so you can snag a modest subsidy?
How cheap a house you need… I’m not selling, but there are some pretty cheap little houses on the MN side of the river in Lakeland / St. Croix Beach. They always need work, but stunningly low taxes in this age.
A lot of investment advice — from experts I trust — isn’t about macroeconomics at all. It isn’t about spotting an inverted yield curve, or analyzing PE ratios. Guys a lot smarter than you have already done this stuff and it is priced into the market.
Wise investing is about microeconomics, the things that you control. How to spend your money effectively. How to make a goal and stick to it. How to manage investment costs is a very bid deal. How to manage taxes on investment return and withdrawals is a very big deal.
Master that stuff and you’ll find that a subscription to The Economist is a waste of money.
^ Pod – Social Security isn’t going anywhere, there will never be the political will to obsolete it. What the benefit will be worth is another matter, but there’s not great reason to doomcast.
JK, I’ve already got a house picked out in Osceola. I have a lot of family around there.
The Obamacare subsidy I would lose my taking income over 3x the poverty rate for a single person is about $10k (depending on gold, silver, or bronze) but that can change anytime.
So next year, when I retire, I need to front load a bunch of purchases while I am still under COBRA and not Obamacare. The smart thing to do is front load the house purchase (since its an investment). After I move I’ll see how many toys I can afford before settling into the grim reality of having my income capped at $48k (with no house or car payment):)
My folks moved to Osceola as retirees. Quite a few mn retirees there. They like it. House was not expensive for what it is, taxes are a bit.
Social Security isn’t going anywhere, there will never be the political will to obsolete it.
That’s probably true.
By the time POD is ready to cash in on the government’s handling of his lifetime finances, he could probably look forward to a check for $500 a month after he reaches 75.
https://www.myfederalretirement.com/social-security-2018/
“The Social Security Board of Trustees Tuesday released its annual report on the long-term financial status of the Social Security Trust Funds. The combined asset reserves of the Old-Age and Survivors Insurance and Disability Insurance (OASDI) Trust Funds are projected to become depleted in 2034, the same as projected last year, with 79 percent of benefits payable at that time.”
That doesn’t mean it will be insolvent, it just means there won’t be any reserves. We’ll be depending on all those rocket scientists and neurosurgeons cascading in from Somalia, Guatamala and El Salvador to keep us in Mojitos and cigars, paycheck to paycheck…should work out swell.
I never figured SS into my retirement plans; I encourage POD to stick with his gut as well.
well i think everyone should save.
Its why Im contributing to my 401K as much as I can now, Im also starting to learn how to invest, and I plan on having enough dividend stocks so I can live comfterably. Anything I get from socailst security will be gravey because Im living my life like it will be gone by the time I retire, if I ever do.
One of the things I have to watch out for in my line of business is where someone will troll the data until they find a correlation, a practice I call “fishing for hypotheses.” It’s why competent researchers will call such work intriguing, but will insist on a follow up study to go forward with it.
And along the same lines, we might wonder whether many politically motivated people might figure out ways of using these made up metrics to manipulate the conversation, say by tweaking the news so people would insist on higher returns for short term bonds vs. long term.
Also, with others, I think the Vox article is somewhat misleading because it doesn’t factor in the Federal Reserve easy money factor prominently. Like I just noted, driving a narrative.
” It’s why competent researchers will call such work intriguing, but will insist on a follow up study to go forward with it.”
The problem is not only with incompetent researchers, it is with dishonest researchers as well.
Particularly in sociology, bad research is used to drive the public policy that the researchers prefer. The Dem candidates are all making fighting “structural racism” the centerpiece of their policies. There is no proof that such a thing as “structural racism” is a real thing. Racism, sure. But the beauty of “structural racism” is that it is theory that can neither be proven nor disproven. It is like blaming the problems of the world on “Jewish conspiracies.”
Investing in your 401k, good idea POD. I encourage you to fund it heavily. That way, when President Warren enacts her Wealth Tax, they’ll be able to take your Wealth and re-distribute it to poor senior citizens who report no assets to the government, like me.
Much appreciated.
BTW, here is a popular definition of “structural racism”:
“the term structural racism refers to a system in which public policies, institutional practices, cultural representations and other norms work in various, often reinforcing ways to perpetuate racial group inequity….the structural racism lens allows us to see that, as a society, we more or less take for granted a context of white leadership, dominance, and privilege. This dominant consensus on race is the frame that shapes our attitudes and judgments about social issues. It has come about as a result of the way that historically accumulated white privilege, national values, and contemporary culture have interacted so as to preserve the gaps between white Americans and Americans of color.”
And by the way, not everybody believes this inverted yield curve is the same as historical inverted yield curves, so the predictive power may be different.
https://thehill.com/opinion/finance/457936-why-the-markets-turned-volatile-and-why-you-shouldnt-panic
Like saying it’s dark at noon today because of an eclipse, not because of a volcanic eruption, and therefore the long-term investment strategies are different.
JD your making me want to bury gold and silver in the back yard, not that Im not already… but Ive said too much.
Sorry, POD, just kidding. Democrats aren’t coming for your investments, just as they aren’t coming for your guns. That’s strictly a right-wing scare tactic, pretending that things they say are things they mean.
Although . . . it’s always good to diversify your holdings. You’ve visited the Garden Center to purchase a shovel. Might want to hit the Mattress Store, too, just to make sure all your wealth isn’t in one place.