
Ask HN: What is really wrong with the US economy, really? - benched
I only have my own situation and experience to go on, so I will start there. I&#x27;m in my late 30&#x27;s. I make roughly $110k per year. I am single, no dependents. I live in a studio apartment near Seattle. I drive a 10 year old economy car. I do eat out some of the time, but nothing extravagant, and no drinks. Overall, I am not absolutely as frugal as I could possibly be, but I think I&#x27;m fairly frugal. My biggest expenses in the last couple years have been rent, medical, and dental in that order. My retirement is very under-funded. I do have more savings than most people, but it isn&#x27;t enough to change my lifestyle in any big way.<p>A couple things. I am <i>not</i> here to complain about my lot in life, or seek advice. I understand that I&#x27;m better off than most. I realize it is unavoidable that some people will argue that the economy is better than ever, and it&#x27;s all about personal responsibility. I accept that - I can just ignore those comments.<p>The only people I know who seem to be comfortable and have their financial lives in order have had steady, high middle-management type positions for a long time. They&#x27;re a small minority of the people I know.<p>My question is, <i>what is the problem</i>, really? I am fairly sure this is not the type of situation my grandparents lived in. I feel under a lot of pressure all the time, and yet it seems I am not quite &#x27;making it&#x27; financially or materially. Is that how it is for everybody? Is something wrong with the economy, or is this just how the human hierarchy has always worked? Is it me, the country, the region, the times, or everything, or nothing?
======
jseliger
_My question is, what is the problem, really_

Take a look at Matt Yglesias's _The Rent Is Too Damn High_
([http://www.amazon.com/dp/B0078XGJXO);](http://www.amazon.com/dp/B0078XGJXO\);)
many "fun" municipalities like Seattle have restricted development to the
point that housing is extremely expensive. If you move from Seattle to, say,
Houston or Dallas, you'll probably see your effective rent shrink by 35 – 50%.

Secondly: see Tyler Cowen's books _The Great Stagnation_ and _Average is
Over_. Those books are too sophisticated and deep (though they're quite
readable) to summarize here, but the shortish version is that Western
economies are undergoing a lot of profound shifts driven by a combination of
technology and Baumol's cost disease.

 _in the last couple years have been rent, medical, and dental in that order_

Alex Tabarrok's _Launching the Innovation Renaissance_ is also good: regarding
medicine and dentistry, part of the issue is Baumol's Cost Disease and part of
it is the powerful lobbies that restrict entry into those fields through
licensing regimes and other means.

Finally, a general note: be wary of any answers in this thread that don't cite
any sources and ideally those sources should be books. The issue is too
complex for simple answers, and the simple answers that one tends to hear also
tend to be wrong or missing a lot of important information.

~~~
justizin
"If you move from Seattle to, say, Houston or Dallas, you'll probably see your
effective rent shrink by 35 – 50%."

Right. If you don't own a car already, you would almost definitely have to,
and your job options in the $110k range will put you on an oil rig if you have
a master's degree in mechanical engineering, if you can even reach that.

My ex father in law made about $110k at 60 working as a geological consultant
for oil companies.

Basically: job opportunities are not the same.

Disclaimer: I am a Texas native. I speak with a lot of knowledge about many
municipalities where most of the people I have known in my entire life have
lived. Even the rich ones are poor.

Your argument that medical and dental costs would be lower if we didn't
restrict entry based on licensing is alarming at the very least. Had I read
that first I probably wouldn't have responded, but I've already typed, so,
bleh.

~~~
humanrebar
I don't know why pushing back on licensing requirements invented last century
is alarming. We already see it with the rise of PAs and nurse practitioners.
People who aren't doctors are prescribing medications and performing routine
procedures.

Also, making $110k in Texas as software engineer is very doable without
working on an oil rig. Of course, salaries vary a lot when you start factoring
in benefits like healthcare and 401k matching.

------
MisterBastahrd
What'd your great grandparents do for entertainment? Probably the radio, some
TV, read some books, play cards. Speaking of TV, how'd they get it? Most
likely over the air. Phone? Yeah, they had a land line, but they weren't
dropping $100+ for a cell phone. Internet? Of course not. House? Probably
about 1200 square feet or so, and they likely had more than 3 kids to occupy
it. The rest of the world? A recovering war-torn mess that needed to rebuild
itself before it could even start to compete with the US economically. What
about the car? They probably had one or two, but you could fix them without
needing specialized gear.

What about the food they ate? It was likely whole foods, which would lead to
lower rates of heart disease and obesity. And if they lived in a rural area or
subdivision, they likely grew some of their own or bought it from local
farmers.

My grandparents never borrowed a dime from a bank. They owned a house, two
vehicles, and raised 5 children. Their vacation was a week every summer at a
rental cabin about 3 hours away. They didn't get cable until the mid 90s and
never got the internet or a cell phone. How much money could you save if you
never owed anyone interest and spent 20 dollars a month for communication?

~~~
kevingadd
I think if you list cell phones and the internet before you list housing, your
sense of scale is completely off.

Even if somebody's spending $200/mo on telephone and internet connectivity,
that still pales in comparison to the cost of rent in pretty much any part of
the country. A fairly small studio apartment in the area where I live is
approaching $2000/mo, minimum - to pay less than that I'd probably have to
move 30+ miles away, which then increases my commuting costs dramatically and
might force me to drive instead of take public transit. (And no, I'm not
living in some posh downtown area with high demand, I'm living next to the
low-income workers and big families, in an apartment complex built in the 70s
or 80s.)

Then let's look at health and dental costs, which combined together probably
are double/triple what you pay combined for reasonable cell phone/internet
service. (Personally, I pay $30/mo for cell phone voice and data. Internet is
expensive because yay, monopolies - very little choice there.) Going without
phone/internet connectivity in this modern society is utterly ridiculous as a
working professional; you simply can't get away with it unless you decide
you're gonna cut yourself off from the world and live in a cabin somewhere.

To answer your specific question, let's say he spends $200/mo on internet+cell
phone. If he cuts those out entirely, that's $2400/yr, or barely a month's
rent in many localities.

Don't be ridiculous. Stop focusing on tiny things when the real problems are
right in front of you: Housing costs, health costs, transit costs...

~~~
eqdw
> A fairly small studio apartment in the area where I live is approaching
> $2000/mo, minimum

Unless you live in NY, SF (/me waves!), or DC, that number is grossly out of
touch with the actual costs of rent in the United States.

~~~
kevingadd
[http://priceonomics.com/the-rise-of-bay-area-rent-
prices/](http://priceonomics.com/the-rise-of-bay-area-rent-prices/)

This is from 2013. It hasn't gotten better. Their median for the city I live
in is $2395 (and for reference, I'm an hour+ drive from San Francisco; ~2
hours by train).

Rents around me have definitely been going up, even if they're not at $2400.
And that's for studios/1 bedrooms. If I were to move into the exact apartment
I have now, the rent on the lease would be a few hundred dollars more than
what I'm already paying (despite the fact that they've been bumping my rent up
as much as they can).

Yes, there are low-rent areas. But a lot of people don't have the option to
live in them.

~~~
eqdw
When I said "NY, SF, DC" I meant the metro areas, not the cities.

My friend is fond of telling me I could get a sweet 1000sqft loft in downtown
Houston for $1200/mo or so. Or a regular apartment for half that.

Of course, to me, not living in Texas is worth the extra thousand dollars a
month

------
jchrisa
The post-war expansion was terribly inefficient. And a lot of what was defined
as an increase in quality of life two generations ago (pave everything!) turns
out to look like a decrease in quality of life to our generation (suburban
sprawl).

If you analyze the ongoing costs of maintaining our urban environment, vs
paving everything in the first place, you see that it's easy to pave more than
you can afford to maintain. That's us, and it's not just pavement, it's a
whole lot of things.

I like this blog / podcast for talking about how we can avoid making decisions
like the ones that got us here:
[http://www.strongtowns.org/](http://www.strongtowns.org/)

------
mark_l_watson
I would say that the USA economy does not _seem_ so bad right now because of
Quantitative easing: a few trillion $$ in the last several years of new money
created out of _nothing_. This has maneuvered housing and stock prices up,
fueling a false sense of optimism and more consumer spending.

Long term, we have huge problems in my opinion. Our profligate military
spending is going to catch up with us. If we are able to redirect our offshore
military spending soon, things might be OK, but I am not hopeful.

Edit: I forgot to give my advice: don't get caught up in consumerism (stop
watching TV commercials, don't get a new car every time your brother in law
does, etc.). Try to save some of your after tax income. Invest time (and money
if needed) in continuing education over your entire life.

~~~
juliangoldsmith
What about spending on healthcare and pensions? We spend more on each of those
than on our military.

~~~
mark_l_watson
Good point Julian. Spending on healthcare, repairing infrastructure, cost of
food stamps, etc. pores money back into our general economy, something that
spending money on foreign bases, etc. does not.

One thing: it is very important to wind down the size of our military very
slowly because we have made a commitment to supply jobs long term in return
for being in the military and the sacrifices that entails. My solution is to
bring most service people stationed overseas home as soon as we can manage
that - better to spend the money inside the USA while maintaining our
employment commitments to people in our military services.

------
RealGeek
I recently moved to US (from India) and I was shocked to see how the "free
market" economy is structured to bankrupt the middle class and poor. Indians
have far less income than Americans but are somehow able to save more.

Here are some basic problems I see with economy:

1) Rent: When people are paying half their paycheck to rent a studio
apartment, there is something seriously wrong. The monthly rent in most areas
is more than 1% of the property value, which is insane. Why pay $2,000 per
month to rent, when you can buy it for $1,500 per month mortgage which won't
increase every year and will build value towards your equity. In India, most
people own houses or spend around 10% to 20% for rent; despite the property
being far expensive than US. Example: it costs $500k to $1 million to buy a 2
bedroom apartment in Delhi, but you can rent it for $600 to $1,200.

2) Healthcare: Our healthcare expense in India was less than $500 per year
(without insurance). It is more than $20,000 in US, and we are still held
hostage by medical practices and insurance companies. Examples: wait 3 weeks
to schedule an appointment with your doctor; $this is not covered by your
insurance; pre-existing conditions.

The drugs I bought in India for $10, costs $200 in US; there are drugs created
by Indian pharmaceutical companies and sold to US pharmacies for $1 (they
still make good profit on it), but it is sold for $100 in US. The prices are
artificially inflated so high that it is not affordable by 99%, so they are
forced to buy insurance. This isn't free market economy, this is extortion by
monopoly; there should be no place for middle man in healthcare.

3) Banks are designed to screw consumers in every possible way and suck every
penny out of your account. It's is not much different in India; just the
amounts are lower and banks are regulated by Government.

3) Service & Utility companies: most people pay around $100 per month phone
and $100 per month for cable. In India it costs $5 per month for cable, and
most people pay between $5 to $15 for phone. Moreover, there are no draconian
contracts and service is much better; phones work in remote villages and even
in lower basement of concrete buildings. It is silly how a company's 'Terms of
Service' can hold consumers hostage and even super seed the law.

4) Consumerism: Americans are obsessed with credit cards and buying everything
they can't afford. Why does a minimum wage worker spend $100 a month to buy an
iPhone when there are prepaid Android alternatives available for much less?
Why do people making $30,000 to $40,000 buy BMWs and $2,000 purses?

~~~
mikeyouse
1) Those are false choices. If rent is $2,000/month, a mortgage would be far
more than $1,500. Just an example, my rent is near $2k in SF, an equivalent
sized unit on my block just sold for $700k. If you could put 20% down (just
save $140,000!), a 30-year mortgage would be $3,500/month -- 75% more than
renting.

2) Get a new healthcare plan through Healthcare.gov. The out-of-pocket maximum
is $12,700 for a family plan.

3) Find a credit union, no fees, no shenanigans.

4) Call around and get a deal, my phone plan is $65/month and my cable (25mb
internet + digital 'starter' TV) is $65/month

5) Agreed.

~~~
dangrossman
> If rent is $2,000/month, a mortgage would be far more than that

Typically, the rent is covering an existing mortgage + taxes + insurance +
maintenance + profit. If the mortgage were higher than the rent, the building
owner wouldn't be making any money renting it out.

~~~
jpollock
No, it doesn't work like that, because it doesn't take the house's capital
gain into account.

Given the ability to grow the housing supply, there is typically a fixed
return for a property. That return will be split between capital gain and
rent. Rent no longer covers the mortgage because it is the total return that
determines if it is a good investment. There are also the tax benefits of
renting out a house in some locations (maintenance and insurance would be
deductible).

When we rented out our house, we were told that the typical return on capital
was 8%, where 2-3% would be capital gain, and the rest in rent. We priced our
rent at 5% to get a quick rental. Mortgage rates in that location are 6%.

If it is hard to gather a down payment, then rents can exceed mortgages
because renters cannot easily swap between the two.

------
mathattack
I'll start by saying that I feel your pain. I've had lots of discussions with
friends where we expressed the belief that we all thought we'd be financially
comfortable by now. Almost none of us are.

Some thoughts on both sides of this: 1 - My grandparents lost it all in the
Great Depression. My parents never had enough money to take overseas vacation
once the kids were born. They were never comfortable. This isn't unique to our
generation.

2 - We have a lot of material gains that aren't factored into the equation.
(Free internet, etc) But this is forcing us to compare against others a lot
more. We only see the people succeeding, and don't count the failures.

3 - Once you discount the effects of obesity, we are a much healthier
generation than our parents and grandparents. Think of all the major diseases
(polio, flu) that used to be fatal.

4 - For better or worse, there is a "Winner takes all" mentality in the
current environment. Globalization plus Technology means the best get paid
disproportionally more than in prior generations. Upper Middle Class is
getting squeezed. The "winners" are now earning a lot more, and are a lot more
visible.

5 - In today's environment, losing a job costs A TON and is incredibly
destabilizing.

I don't know what advice to give, other than don't get sucked in to the
consumerism, or feeling forced to keep up with everyone else.

------
tedsanders
I'm not sure if I agree that your grandparents were under less pressure in
their jobs. Overall, I think life is far easier today than it was 50 years
ago, at least for most workers.

It sounds like you're doing better than 99% of people. Six figure income, no
huge expenses. I think the question isn't 'what's the problem with the
economy' \- really the question should be 'what's the problem with our
expectations?'

I think for all of human history the Joneses have looked more financially
comfortable and happy than they really are. Perhaps the comfortable people you
envy are not as comfortable as they appear. Or maybe comfort is more a state
of mind than a state of finance.

Those are my two cents, at least. I'd be happy to hear more about your
situation and where you're coming from.

~~~
benched
Well, I can't really know my grandparents' state of mind. But my grandfather
drove trucks locally, and my grandmother worked in a supermarket. Try to
imagine affording a single family house and two cars with jobs like that
today. They always seemed like they enjoyed their jobs. My grandfather kept
working long after retirement age. I never heard them complain about their
jobs or give any indication they didn't like them.

If 99% of people are worse off than I am, that seems like an extremely serious
problem to me. Hence my question.

~~~
tedsanders
Thanks for your reply.

Maybe it has to do with WWII. After WWII, the US was the only great economic
power left undamaged. Our industries supplied the world, and they boomed. That
wealth trickled down to many people in the US. Now, decades after WWII, other
countries around the world have developed their own industry, driving down
global prices and wages. As a result, perhaps the average global worker is
better off, but the average US worker is worse off. This may partly explain
why median wages have been stagnant in the US since 1974ish.

I wonder how much of comfort is attitude or perspective. I also happen to be a
single man living in a high-rent city (Palo Alto). My income is about $30,000.
Rent is my largest expense by far, but overall I feel quite comfortable. I
manage to contribute $5k each January to my Roth IRA. No doubt if I had
children or medical expenses, my $30,000 income would be strained, but right
now I feel relatively comfortable on it. My needs are met.

~~~
eqdw
> I wonder how much of comfort is attitude or perspective. I also happen to be
> a single man living in a high-rent city (Palo Alto). My income is about
> $30,000.

I live in a shitty small apartment in a run down part of SF, and my annual
rent is $20,000. Either you're talking _net_ income, PA is _way_ cheaper than
I've been led to believe, or there's some factor I'm missing

~~~
tedsanders
My rent is about $12,000 a year. I guess the missing factor is that Palo Alto
is cheaper than San Francisco (though certainly not cheap! :D).

------
Beached
I wouldn't necessarily say this is related to the economy (The economy has
other issues), but more related to our culture. Our entire culture is focused
around consuming, buying the next thing, having the nicest stuff, etc. Heck
our high schools even teach us how to properly consume, and how to acquire
things we cannot afford.

However in life you will have to pass up some things you want in order to
maintain living within your means, as a result you are going against the
constant consuming behavior that our culture has taught us, and feel a failure
for not buying all that stuff.

I couldn't speak to the social pressures of the past (I didn't live through
them). My personal experience is that when I was able to ignore the consuming
pressure society gives, the amount of stress and pressure plummet and I have
been able to enjoy life much to a higher standard.

Those middle managers may be in that sweet spot of enough to be comfortable
and feel successful, but not so successful they feel the need to compete with
the consuming elite of execs and millionaires. Don't be fooled though, there
are plenty of people in other "class brackets" that are able to shed the
stress and pressure of the US culture.

~~~
eqdw
I'm a Canadian expat in San Francisco, and one of my favourite cultural-
tourist hobbies is comparing my public school experience with my (American)
girlfriend's

> Heck our high schools even teach us how to properly consume, and how to
> acquire things we cannot afford.

I'm curious as to what you mean by this. Could you elaborate, for someone who
never went through your highschool system? Thanks!

------
jisaacstone
Too many hippies on this thread.

The biggest problem with the us economy currently is the erosion of middle
class jobs for unskilled and semi-skilled labor. My grandparents lived
comfortably on union jobs. Most of those jobs are gone now, and those that
exist are paying less all the time. I know a man who is 60 working in a lumber
mill making less then he ever has in his life (40+ years of factory work).

Yes sure consumption has increased with affluence but Many people don't
realize how hard it is for an unskilled and unconnected person to find any
kind of work. I know some Iraqi refugees who could not even get agriculture
work because the Hispanic population always filled any open jobs through
network effects.

The only jobs that exist for unskilled labor are service sector, fast food
&tc. These may pay enough to survive in many places but it will not be
comfortable or secure.

Second biggest problem is the rising cost of healthcare. 15% of GDP and
growing, more than half of that is government paid (medicare / medicaid /
etc). My father is self-employed so purchases his own healthcare, but there is
no out-of-pocket maximum for him so when my mother was diagnosed with cancer
there was a massive financial cost despite 80% being paid by the insurance
company.

There are other problems as well, but those are the biggest cause of financial
insecurity and lower lifestyle quality among the bottom quintile of US
citizens.

Edit:

Fewer hippies after I had composed my rant. Re: rents. yeah they are bad but
really only outrageous on the coasts. So depending on your location the rent
can kill you, but in my hometown it was never a big deal.

~~~
eqdw
> Yes sure consumption has increased with affluence but Many people don't
> realize how hard it is for an unskilled and unconnected person to find any
> kind of work.

I wish the focus of the US public discourse was less "how terrible is it that
these unskilled people can't find jobs" and more "how can we provide economic
stability to these unskilled people and help them become skilled"

------
jandrewrogers
Something does not add up here or, at the very least, I am missing something
important.

I live in Seattle proper, rent an apartment that is relatively expensive by
Seattle standards, have a ten year old car, no dependents, etc and have lived
that way on a similar income. I am not frugal but I also don't buy much
"stuff" which probably has the same effect as being frugal. It would be hard
to argue that my life is not comfortable.

Somehow I managed to save tens of thousands of dollars per year after taxes
which, invested sensibly and lazily, accumulates pretty quickly into a
substantial chunk of change. This is not because I am a great saver or a
financial wizard, it was kind of a default outcome.

How much do you think you should be saving every year such that saving tens of
thousands every year is not enough?

~~~
esw
>How much do you think you should be saving every year such that saving tens
of thousands every year is not enough?

OP may not have always had such a high-paying gig. I lost years of potential
retirement savings working for under-funded startups (including my own). I'm
making good money now and put a decent amount of money into retirement and
savings, but I do feel like I'm really far behind compared to similarly-aged
friends who stayed in the corporate track.

------
wturner
Thanks for sharing. I'm in my late thirties and I currently have no job. I am
waiting to hear back from a 'Kelly' temp agency employee (who was high as shit
when he spoke with me) for a job assembling plastic parts for $8. This might
amount to less than $150 take home as I might have to take a cab home because
the buses don't run after the shift ends. I rent a room in a trailer with no
door which had a leaky roof until we put a tarp over it. Additionally my
mother has emphysema, works 7 days a week and I am powerless to do anything
for her.

I'm convinced that all the geek analyzing of 'structural' economic problems
are partially in vain. I think human beings are inherently social animals,
thus until the financial moguls, billionaires, the Mark Zuckerbergs and Larry
Pages of the world literally feel that people like me have the power to kill
them.... then nothing will change.This is the same carnal belief that lead to
our democratic social order. Even if you believe in things like a 'living
wage' , without the support from the wealthy it won't happen. Those people
like most don't do shit unless their is something in it for them, but people
like me have no leverage other than being semi suicidal and wanting to kill
something.

Voting doesn't work and the government doesn't care.

I really don't think it's too complicated. If 5 U.S. billionaires were
murdered under the banner of a living wage for all Americans at least a more
honest discussion would ensue among circles that have social clout.

So that's my synopsis.

Enjoy life and.. Have fun!

------
greggman
Random ramble to follow

I know how you feel but at the same time my sister and brother in law make
2/3rd what you make, own a house, a timeshare, raises a kid, home schools,
volunteers, her and my nephew are docents at the museum of the pacific, she
teaches MS office and other home maker type computer classes (as in how to
make a newsletter on your computer), She's in several clubs (the moms club, a
bowling club, a bunko club, etc.) she's got a yearly pass to disneyland and
goes at least twice a month, used to be at least once a week.

What she doesn't have: She lives near the Pomona fairgrounds in LA not in
Seattle. She drives a 20-30 year old car. She's got old furniture and old TVs,
CRT not LCD, she's enjoying her life way more than pretty much anyone I know.

None of this is meant to take away your valid feeling that even making low 6
figures you feel like you're struggling. I'm the same way. Especially when I
lived in SF I thought to myself "I'm making good money, why does it seem like
I can't afford to live here?"

Move to Tokyo, Singapore, HK, or NYC if you really want to feel like a
financial failure. In those cities you'll see large portions of them cater to
people making 7 figures.

~~~
kevingadd
'Move somewhere else' is totally missing the point.

If everyone moves to those particular low-rent places, that increases the
demand there, and rents will go up until housing supply increases to meet
demand (or, like SF, it never increases and prices just keep going up). This
is ignoring the problem of finding work in low-rent areas (though
telecommuting at least makes that less difficult.)

To me, 'the problem is where you live' is utterly condescending. Would it be
reasonable to tell a minimum wage worker, who works 80+ hours a week, that his
problem is where he lives and he should just move? How is that person supposed
to afford to move when they can barely pay rent every month? Do you really
think THAT is the problem, that some people happen to live/work in a certain
location, and it would be better if they just moved to where all the other
low-income families live?

For a concrete example: I used to work in the Seattle area for a few years. I
'solved' the rent costs problem by living way to the east, in the Issaquah
mountains.

Unfortunately this meant a 30-60 minute car commute each way, along with a big
increase in car maintenance/fuel expenses. And because I was in the mountains,
every winter the occasional ice storm would knock out power/heat for 1-2
weeks, or the mountain roads would be so iced over that I couldn't get to
work. Days I'm not working are days I'm not getting paid; if I'm lucky I don't
get fired.

Yeah, solves everything, doesn't it?

~~~
greggman
We're not talking about a minimum wage worker. The OP said he made > $100k a
year.

I'm not sure what your point is. Plenty of people choose to live in cheaper
places for lower salaries or for that matter cheaper places for the same
salary. Plenty of people also choose to live far from work and have a really
long commute. It's a CHOICE. You make it, you live with it. If you want to
live in an expensive place that's also your CHOICE.

I had a friend who lived in Laguna Beach, CA and got a job in Studio City. He
then whined about how his life sucked because this commute was so long (~2hrs
in traffic). He wanted special treatment because of his hardship. It was
pointed out that was HIS CHOICE. The rest of the employees chose to live
closer to the company. He CHOOSE to have a long commute because he wanted to
stay in Laguna Beach. Eventually he got a job somewhere closer to his house
rather. Again, his CHOICE.

I have another friend who moved to Arkansas from Orange County. In Orange
County he was paying $1200 (a while ago) a month for 2 bedroom apartment. In
Arkansas he had a 3 bedroom house on 1.5 acres of land for $350 a month. Again
that was his choice.

The world doesn't owe you a nice place to live in an exciting area of the
world for a cheap price.

~~~
kevingadd
Calling it a choice is absurd. People don't choose where they're born, where
their family lives, where their job opportunities are, and where they can get
access to essential health care and other resources.

People like you or me certainly choose to move to LA or Seattle or San
Francisco for a cushy tech job, but that's a tiny percentage of the
population.

To me, this is like telling a diabetic that they 'choose' to inject insulin
and check their blood sugar every day. Certainly they can exercise free will
and stop, but there are severe consequences that make that not a realistic
option.

------
rdl
$110k isn't very much for late-30s professional anymore, especially for a
single income earner.

$150k x 2 for Seattle, or $200-250k x2 for SFBA, is more like a high-end DINK
situation, if you count the value of stock and other benefits. $110k is
solidly middle class, and fine if you're in your 20s, but by late 30s I'd
consider that on the low end of someone in the software engineering field.

Muni drivers or police/fire/etc. in SF can easily make in the 100-250k range,
without college.

(I agree this is all insane, but...inflation. And particularly in the coastal
areas. If we were a separate country from the midwest, inflation would be
vastly more pronounced. In SF, items e.g. iPhones bought by your employer cost
basically 10-20% what they cost in the midwest bought personally for non-
business reasons, once you account for taxes, salary differentials, etc.
Crazy.)

------
Mz
1) Peak Oil

2) Our so called "health care" system is extremely fubarred.

There's probably more, but those strike me as the big two.

Edit: To elaborate a bit on point 1, Peak Oil is not the end of oil. It is the
end of _cheap_ oil. The current U.S. economy and (expected) lifestyle was
developed in the era of cheap oil. That era is ending, which is likely part of
what is fueling the depression. Our current infrastructure, habits, etc are
simply not sustainable with the cost of oil going up and not coming back down.
(At this point, if we discovered that Antarctica or the moon were essentially
99% oil with a thin top layer of dust/snow/whatever, that would not solve this
because endless expensive oil does not solve the problem here.)

~~~
maxerickson
Energy spending as percentage of income has gone down.

Also, the inflation adjusted price of gasoline hasn't really changed in a
brutal manner:

[http://www.randomuseless.info/gasprice/gasprice.html](http://www.randomuseless.info/gasprice/gasprice.html)

It's twice as high as the 'typical' trend, but vehicles make better enough
mileage to eat most of that.

Edit: and if you drill into it, the shipping cost of the food at the grocery
store is probably less than the gas cost of driving to the store. So shipping
hits prices, but it hits them when a $0.05 shipping cost for a package of
whatever goes to $0.10.

~~~
Mz
Please support your first statement. Because the link you give does not fit
with your assertion. It shows price compared to 1979, once of the worst years
in the U.S. for the price of gas. The chart shows a steady climb in recent
years to a point where it now matches or exceeds the inflation adjusted price
of 1979 -- again, one of the worst years for gas prices in the U.S.

[http://en.wikipedia.org/wiki/1979_energy_crisis](http://en.wikipedia.org/wiki/1979_energy_crisis)

Further, the theory of Peak Oil is rooted in actual history. After the Alaska
oil pipline came online, oil prices steadily went down for a time. It came
online in 1977 and the reduction was in the 1980's: [http://www.api.org/oil-
and-natural-gas-overview/exploration-...](http://www.api.org/oil-and-natural-
gas-overview/exploration-and-production/alaska/northern-alaska-petroleum-
development)

So please explain to me how a chart showing that current prices are, in real
terms, as bad as or worse than 1979 prices supports your first statement.

Thank you.

~~~
maxerickson
I was sort of sloppily making two points. Gas prices are energy prices that
'we really feel', and they have only gone up some; qualitatively, gas is still
cheap enough that (many) people drive around without thinking about it much.

This shows residential energy as a percentage going down:

[http://www.eia.gov/todayinenergy/detail.cfm?id=10891](http://www.eia.gov/todayinenergy/detail.cfm?id=10891)

This shows gasoline roughly matching the other link:

[http://www.eia.gov/todayinenergy/detail.cfm?id=9831](http://www.eia.gov/todayinenergy/detail.cfm?id=9831)

But to the point, a 1 or 2% increase in gasoline spending might stink, but it
shouldn't be smashing the economy.

~~~
vardump
I think it's a big mistake to assume most of the expensive oil effect are
through direct energy expenditures.

Consider what is listed as "shelter", "transportation" and "food". The biggest
costs are there, according to the first page you linked. Those areas heavily
affected by cost of energy and reduce what is available for all the rest,
including spending on gasoline.

Are vehicle miles going up or down? Maybe gasoline spending is not increasing,
because people just don't have any money left for it?

~~~
maxerickson
Yeah, it's not a great measure.

------
gavanwoolery
Well, things have changed since our grandparent's generation. A college degree
used to be a guaranteed ticket to a decent job, and even many blue collar jobs
were much better paying and less abusive. Now being 30 years old and living
with your parents is not that odd.

Now, debt, unemployment and inflation are soaring (if you want to see how bad
it really is, visit cities like Detroit or the non-wealthy areas of Chicago).

There is a growing wealth divide. I have nothing against "1 percenters" but I
do believe the gap is becoming dangerous. 95 percent of recovered funds from
this recent "improvement" in the economy (since the last crash) have gone to
the wealthiest 1 percent.

Our government's budget is increasing in size, but they are not spending money
any more wisely. Certain contractors make a killing (particularly in the
military sector), and its kind of a false economy based not on merit but who
puts money back into their politician's pocket (in the "real" world, the
healthcare.gov site would have been built for a fraction of the cost and its
failure would have been a huge blow to the company that created it).

Part of this is people failing to adapt to the changing world or feeling too
entitled and expecting their corrupt/indifferent government to fix every
problem. Part of it is that automation and oversea workers are claiming many
jobs (but these are crappy jobs you wouldn't want anyway). Automation is even
going into territories you might not think of. 100 years ago the US population
was almost half farmers (IIRC), and now it is less than 2 percent.

Basically, you are not delusional. Things are getting harder, and worse.
Competition is getting fierce as everyone is increasingly competing to justify
their worth to employers. The economy is definitely in a bubble because the
stock indices does not reflect the reality of debt, unemployment, and our
stale economy right now. I have no good idea of how these problems can be
solved. I am no Luddite, but I think that perhaps taking a step backwards in
time could be an interesting experiment - create more towns that are self-
sufficient, grow their own crops, build their own houses, etc. It seems like
much of the wealth is getting boiled down into the hands of fewer and fewer
big companies.

~~~
humanrebar
Defense is a decent-sized portion of government spending, but entitlement
spending (especially when you consider state budgets) is much larger.

If you would like to see the government spend money more wisely, focusing on
making entitlement costs tractable should be the top priority.

That's not to say that government contracting isn't grossly dysfunctional.

~~~
brianpgordon
The difference is that defense is an unnecessarily expense. There is no
credible military threat to the United States in the world right now. We would
be just as safe if we stopped maintaining such a gigantic standing army and
stopped interfering in overseas conflicts.

In contrast, spending for healthcare, education, and welfare measurably makes
Americans' lives better. Cutting funding for these programs looks attractive
for those who don't use them anyway (the rich), but would ultimately widen the
class divide and be harmful to the country.

------
bubbleRefuge
The problem is macroeconomic illiteracy by policy makers and the press has the
economy underperforming. Taxes are to high and spending is to low and policy
makers believe the government -which can issue infinite amounts of currency-
can actually go bankrupt. We can model the macro economy using 3 sectors:
foreign , domestic , and government with money changing hands between each
sector. Money flows into the gov sector via taxation and out via spending.
Money flows out of the domestic via taxation(to government) or spending on
foreign and in via government spending or foreign consumption. Foreign is
similar to domestic. In order for any sector in aggregate to increase its
income, the other sector(s) needs to spend more than its receives from other
sectors by either going into debt or spending from savings. Now, with
austerity carrying the day in Washington, the private sector cannot increase
its aggregate income with money flowing from the government sector. With the
foreign sector structured to mostly export to America ( worlds largest
consumer) income is not going to flow from there. The only thing left is for
the domestic sector to borrow and spend from savings till it all blows up
again. After it blows up, automatic stabilizers go into effect ( unemployment,
food stamps, stimulus etc , lower taxes due to less income tax revenue) the
government picks up the slack and the economy recovers proportional to net
government spending. This is the cycle our economy ( if not the world's)
operates on.

Income guarantee/Job guarantee, lower taxes, and infrastructure programs would
serve to proactively increase income to the domestic sector. The political
will -due to deficit myths- to do what is required doesn't exist.

------
afterburner
The problem is the rich are getting richer, and the middle class is shrinking.
Actual inflation-adjusted pay for most people hasn't risen in 30 years, while
for the top of the top it's skyrocketed. Meanwhile, everything is more
expensive, and unemployment is high thanks to the apparent political
impossibility of introducing stimulus spending in a time of lowered demand and
zero interest rate (cutting interest rates is the usually the easiest way to
stimulate the economy, but you can't do that when you're at zero already). The
money moved into finance, distorted everything thanks to deregulation, and
screwed up the country, and the world to a certain extent. Europe in the
meantime is addicted to debilitating austerity measures; the populations
haven't exploded yet only because most of them have excellent social safety
nets.

Things really were better in the 60's and 70's from the point of view of how
everyone was doing, what they could afford and with how much effort spent to
afford it.

Also, if you're a tech guy living in a tech area, cost of living is probably
higher than average. And the US has expensive health care, thanks to, until
recently, stubbornly refused all attempts to socialize it.

~~~
apsec112
"debilitating austerity measures"

[http://www.leftfootforward.org/images/2011/05/Government-
spe...](http://www.leftfootforward.org/images/2011/05/Government-spending-and-
revenues-percentage-of-GDP-1978-2010.jpg) (United Kingdom)

[http://multiplier-effect.org/files/2012/10/Eurozone-
Governme...](http://multiplier-effect.org/files/2012/10/Eurozone-Government-
Expenditure_Levy-Institute-Interim-Report.png) (Continental Europe)

Yup, that's some real bone-cutting austerity right there... </sarcasm>

~~~
afterburner
As % of GDP? Gee that mightn't be because the GDP and revenues plummeted would
it? And aside from automatic raises in spending for social security, what do
those graphs say about cuts in other areas? These are very misleading.

There's no actual debate on whether or not austerity measures were
implemented. They were, and the governments of said countries brag about it,
or are pressured into it. And suffer for it.

------
debt
I believe surrounding yourself with highly creative people _is the problem you
're talking about_.

I just had this conversation with a friend of mine last night. It seems the
answer is _nothing_. You're situation, which is very similar to my own, is a
pretty good one.

You've worked so hard. You've gotten so far. Yet something is off. You've made
it and then immediately readjusted the goal posts. Now you haven't made it.
Your situation sucks and you don't know why. Well, it doesn't suck but
something is off.

I believe this desire is born out of those productive creative people you're
exposed to; be it your friends in real life or on Facebook or just people you
look up to or read about.

The pressure you're feeling is the comparison you make between yourself and
others; it's the death knell of ever feeling good about yourself. You'll never
feel satisfied because you're not a successful writer or actor or musician or
scrabble player or race car driver or etc _like your friends are_.

I think the pressure you're feeling is WhatApps gets acquired for $19 billion
and you go "damn it I'm how old and how creative and fuck I can't even write a
damn blog post and these guys carve out some time and make something badass."

You're economic success is not inline with your actual creative output or
potential. Bottom line, sounds like you have some creative juices pent up that
need to be let out.

Go make something.

Because if the economy is bad you're not feeling it(110k, decent savings, no
debt?, paid-off car, etc.), so it might be something else.

------
cm2012
I make $65000 in NYC and support my wife also. We live in a 2 bedroom with a
one hour commute. At this time I feel like I'm making more money than I can
easily spend - and easily better off than any generation of my white american
family before me. I eat out or order in 5 times a week at least.

Its hard for me to imagine scraping by at $110k, truthfully.

~~~
eqdw
I've had discussions with my friend in NYC. He's married in NYC, I'm single in
SF. My salary is $10k/yr more than his, so why do I feel like I'm barely
getting by, while he's doing all these crazy Rich New York Person things.

So I did some rough calculations. According to paycheckcity.com, despite his
making $10k gross less than me, when you factor in tax differences (between
states, and his marital status), his take-home is $6000 MORE than me.

If you make $65k gross in NYC, and you're married, by half-assed extrapolation
that puts you in the same boat as a single person in SF making $80k. Still not
110k, but a substantial difference.

------
delecti
I live in a quite nice 2br condo in Seattle proper. I make just slightly less
than you do. I don't live frugally at all, including eating out far more than
I should and plenty of discretionary shopping. I have nearly $80k in student
loan debt, and I contribute liberally to retirement accounts.

Even with all of that, I've got a healthy buffer in my budget, which is
currently going towards a rainy day fund, and will be redirected toward loans
after that. Within 3 years I expect to have a big buffer of money that I don't
think I could manage to spend.

So it sounds like the problem is either: you aren't living frugally by
reasonable standards, you're leaving something big out (dental ranks on your
biggest expenses?!), or you have such astronomical standards that I can't ever
see you being satisfied.

------
mikeash
Where is all your money going? Living in a studio apartment making $110k, you
should be able to save thousands of dollars a month. Sounds like a budgeting
problem.

~~~
Mz
He says: "I live in a studio apartment near Seattle. ... My biggest expenses
in the last couple years have been rent, _medical, and dental_ in that order."

Medical and dental can be really pricy. So can big city rents. Last I checked,
an SRO in San Francisco was $1000/mo or more. Most areas, higher average
income correlates quite closely to higher local living expenses.

So I wouldn't be so quick to judge.

~~~
mikeash
I don't think I'm judging, but rather asking and proposing/guessing.

Let's say his rent is $1,000/month, if that's the biggest expense then rent,
medical, and dental together won't be more than $3,000/month. That's a ton of
money for basic expenses, but easily doable on $110k/year with plenty left
over.

~~~
tostitos1979
Where did you get 1K for rent? I live in CT and my rent is approx 3K for 1
bedroom + den. Income is a bit higher than OP (10K more annually).

~~~
illuminate
~1k is what a studio costs in Seattle. I pay ~1400 for a large 2 bedroom.

------
BlackDeath3
If you don't mind my asking, how far would you say that $110,000 has gotten
you in Seattle?

~~~
benched
I'd say effectively nowhere. My lifestyle is literally identical to what it
was 15 years ago when I was just starting out. It honestly feels like the
goalposts keep moving. I am doing better than my parents, who were poor. I am
doing worse than my grandparents, who had 8th grade educations.

~~~
BlackDeath3
How is that?

Again, I don't really mean to press you too far with the questions, I'm just a
young guy who hears $110,000 and thinks "gee, that's a lot of money".

~~~
giantrobothead
Hey, I'm an old(er) guy and I think 110K is a lot of money.

~~~
kevingadd
It totally is a lot of money. Unfortunately, everything seems to cost a lot of
money these days...

Ten years ago I wouldn't have believed you if you told me I'd be spending
nearly $10k a year just to get adequate health care, or over $20k a year just
to have a reasonable place to live. I was thrilled when my first salaried job
paid $35k/year, and couldn't understand why that barely covered my expenses!
$35000 is a lot of money! $110000 is a truckload!

(Thankfully, I'm in the OP's position this year, and I earned more than I
spent on essential expenses... not so much last year, though.)

~~~
giantrobothead
For the past few years, I've managed to earn more than I've spent, and have
put a good portion of that money in savings. If I should lose my job, I've got
a significant cushion to survive on.

110K would make for a bigger cushion, though.

------
eldavido
Three major issues I see

(1) People aren't saving enough [1].

For the past 50 years, Americans have come to expect their employers and/or
government will finance their retirement, healthcare, unemployment, and other
major dislocations, so personal savings became something one did with
windfalls, but not on a regular, life-or-death basis. (My grandparents are
fond of tellling me that in their childhood, people were "poor as church mice"
before Social Security)

But these commitments are being tested as people are living longer, massive
healthcare inflation is occurring, and the birth rate is falling, causing the
ratio of wage-generating members of the US economy to constitute a shrinking
portion of the population relative to retirees.

This also creates a problem because financial gains drive pensions, and absent
capital accumulation, "normal" people (pensioners) can't participate in the
upside of higher corporate profits and/or interest rates.

(2) Wages are stagnating. I don't know why this is happening, but suspect it's
due in large part to globalization, in particular, better communication
technologies being used to substitute cheaper labor for what was previously
only available locally.

The decline of labor unions might be a good thing for owners, but it's
unquestionably bad for wage-earners.

Also, more and more jobs are getting automated as technology gets better and
better, which reduces the demand for unskilled labor.

(3) Major across-the-board inflation. Healthcare, fuel prices (which directly
affect the cost of driving, flying, shipping, food production, pretty much
everything), education costs, higher tax rates (Cook county, IL, where I grew
up, has over 10% sales tax, a 5% state income tax, plus federal taxes -- not
inflation as such, but it does have a big effect on depleting purchasing
power), food -- EVERYTHING is costing more. "Six figure" incomes just aren't
what they used to be.

I think the combination of no pensions + higher healthcare costs + more taxes
(largely to fund government-sponsored retirement funds, not provide broad-
based services like education/public works) + inflation is making 120k feel
like 80k or less, it's just not that visible because in nominal terms, wages
aren't going down.

[1]
[http://research.stlouisfed.org/publications/review/07/11/Gui...](http://research.stlouisfed.org/publications/review/07/11/Guidolin.pdf)

------
gmaney
After World War II the world industrial base was either ruined or tooled up
for wartime production. The great U.S. postwar boom lasted from 1945 to 1973,
America was factory to the world during these years because it had huge
advantages in workforce, industrial base, infrastructure, and money. Today the
world has overcapacity in nearly all industries, margins are low, and cost
cutting is the obligatory survival strategy.

The mass systems industrial revolution created the huge increases in wealth
and wellbeing seen in the 20th century. This revolution began around 1900 when
the marriage of science and industry was finally consummated, but it was
mostly over by the 1990s. That means that there's minimal primary
technological innovation now, so returns to investments in industry and
infrastructure are nearly zero. The next industrial revolution is the robot
revolution, but it's only just getting started now, all human systems will be
transformed, and vast amounts of new wealth will be created in decades to
come.

The world has been accumulating huge levels of debt for 25 years, this is debt
that cannot possibly be repaid, but the accumulation is still continuing. Most
of the world switched from industrial capitalism to financial capitalism (the
capitalism of the Medici) in the 1990s with the end of the mass systems
industrial revolution; one result is the rapid rise of oligarchies in many
countries including the U.S., Russia, and China.

------
apeace
I agree that many things are probably wrong with our economy that are
affecting you. But what you said doesn't add up to me. Maybe there are many
things chipping away at your wealth which you haven't been accounting for?

If $110k is your take-home (after taxes), you are single, and your expenses
are so low, it seems you could be saving quite a lot. I know many people with
similar income and expenses, and they save tens of thousands per year. This
allows them to spread savings across IRAs, mutual funds, and regular savings
accounts to build wealth.

Perhaps like many who make a ~100k range salary, you pay upwards of 30% of it
to taxes? This is a huge chunk.

You drive; are you sure you haven't spent more on gas than you have on dental?
You mentioned dental as your third biggest expense in the last two years. This
seems unusual. Gas, food, and other common expenses often make up for a large
portion of total expenses.

If your medical and dental expenses are that high, that's unfortunate. But you
say you have some decent savings, so good for you! That shows you have the
financial strength to make it through tough medical situations :)

If you have more savings than most people you know, maybe you shouldn't be
feeling so pressured. Most people aren't "making it" because they have no
savings--but you are!

Having debt is a common reason for feeling financially stressed. If you have
debt, see a debt counselor or financial advisor and create a plan to get rid
of it, fast. They may advise you to use a chunk of savings for eliminating
debt.

You say you eat out "some of the time". Most people I know say that, and they
mean "at least one meal per day". This is not good for your finances! I
personally increased my monthly savings by 50% once I limited my takeout to
once per week, cooking the rest of my meals myself.

Lots of times it helps to have a financial advisor. If you do this, spend
plenty of time finding a good one who you're comfortable with, who listens to
your concerns, etc.

Bottom line: track down where that $110k is disappearing to! You should feel
comfortable at that salary. Especially over time, as you save and build
wealth!

Hope this helps, or at least gives you some ideas.

~~~
eqdw
> You say you eat out "some of the time". Most people I know say that, and
> they mean "at least one meal per day". This is not good for your finances! I
> personally increased my monthly savings by 50% once I limited my takeout to
> once per week, cooking the rest of my meals myself.

I feel like I eat out _less_ often than most other people I know. I budget for
restaurants and stay within my budget. I buy lunch from a cafe or restaurant
daily during the week, and eat out for dinner _maybe_ once a week. I thought I
was doing pretty well until I got my credit card statement summary for 2013.

Almost $7000 on restaurants / cafes / etc.

My fifth biggest category of spending (after Rent, Aggressive Car Payments
($1000/mo), Savings, and Healthcare, in order).

------
NTDF9
I personally think it is just "Expectation vs Reality".

The government is in extreme debt. Debts have to be paid back. The problem
with debt is that it does not leave freedom to do constructive things (like
upgrading infrastructure).

Also, what you are feeling is a pinch of inequality. Average and median wages
have been stagnant despite record profits of corporations. Tax codes have been
changed to favor investments rather than plain old hard work.

So, while our "expectations" have been to just work and earn a good life like
our grandparents, the "reality" does not facilitate the same.

Also, you're living the life most people just dream of. You're richer than
most others.

------
icu
There are several levels to what is wrong.

I have dedicated the last 5 years to discovering what is going on so I will
try my best to condense it down.

In terms of a 'shorter' business cycle view (less than 10 year perspective) to
what is wrong is that we are not in a recession but in a deleverage. We
haven't had one of those since WW2 so most people don't know what it is and
think it is a recession. A deleverage is a once in a 100 year massive transfer
of wealth event. I have put resources on what a deleverage is at the end of
this reply.

The long term problem is that the Fed is a private bank. This means that the
US Government and American citizens do not control the Fed. Forget the façade
that makes them look like a branch of Government, especially the whole
Presidential appointment of the Fed Chairman. It is a private bank that gets
to print money and sell it to the US Government that American citizens are
forced to use. That means that the US Government and American citizens are
slaves with no control over their future. Each dollar printed is a debt burden
on the American people and a debasement of the current currency value.
Essentially think of printing money as a way that the Fed transfers wealth
from your pocket into theirs. Furthermore, I believe that the Fed manipulates
the economic cycle to create wealth transfer events that they reap the
benefits of.

For further information look to the following:

[https://www.youtube.com/watch?v=PHe0bXAIuk0](https://www.youtube.com/watch?v=PHe0bXAIuk0)

[http://www.tullettprebon.com/documents/strategyinsights/tpsi...](http://www.tullettprebon.com/documents/strategyinsights/tpsi_armaggaddonusa_a4_spw_008.pdf)

www.youtube.com/watch?v=mII9NZ8MMVM‎

[http://www.amazon.co.uk/How-Economy-Grows-Why-
Crashes/dp/047...](http://www.amazon.co.uk/How-Economy-Grows-Why-
Crashes/dp/047052670X)

[http://www.imdb.com/title/tt1645089/](http://www.imdb.com/title/tt1645089/)

------
subrat_rout
1\. Housing: Rent is all about location, location and location including
supply and demand. The rent is high in some places because a group of
customers are able to pay that exorbitant price be it in NY, SF or Seattle.
You draw higher salary for that in those big cities. And I agree that
rent/mortgage is a major chunk of a white collar job income(typically middle
class).

2\. Healthcare: With Obamacare, I am pretty optimistic that people will not be
scared to stay hostage to their employer and the pre-existing conditions
nightmare will end soon yada yada. But the healthcare in US is expensive
because: higher prices for services themselves, higher costs to administer the
system, or more utilization of these services. Also the health care system is
"dysfunctional" because the system of third-party payments from insurers
removes the patient as a major participant in the financial and medical
choices that affect costs.

3\. People are not given enough exposure on how to manage their finance.
People have no clue about their personal finances till they are drowned with
several debts(study loan, credit card etc) in their twenties and thirties.

In this consumerism society, the concept of buying and instant gratification
is stronger than the concept of saving.

However somebody can start from here: 1\. Spend less than you earn and start
saving from the day you start making money.

2\. Spend some time on net and find deals. There are some really good deals
available for everything.

Just ex: You can get a phone plan for $10/month (unlimited talk and text no
internet though) and $25/month(unlimited talk, text and data) from Republic
wireless. Only caveat is, the plan is limited to android and you have to buy
the phone for $299.00 upfront.

Few fellows have taken disciplined approach and retired in their thirties and
forties.

[http://rootofgood.com/about/](http://rootofgood.com/about/)

[http://www.forbes.com/sites/laurashin/2013/10/03/how-mr-
mone...](http://www.forbes.com/sites/laurashin/2013/10/03/how-mr-money-
mustache-retired-at-age-30-and-how-you-can-too/)

[http://www.mrmoneymustache.com/](http://www.mrmoneymustache.com/)

------
jakeogh
Fundamentally, it's a rigged system.
[http://www.youtube.com/embed/mII9NZ8MMVM](http://www.youtube.com/embed/mII9NZ8MMVM)

------
dgudkov
Get married. Sharing expenses and having meals at home more often could help
you save more and this in turn could change your perception of life, universe
and everything.

------
ArkyBeagle
Maybe not your grandparents, but maybe _their_ parents. Harry S. Truman could
not actually afford a house until he was in national politics ( perhaps even
POTUS; a quick Google didn't clear that up ). 100 to 40 years ago, people
would only pay a year's pay, two years for a house.

A lot of the cost of housing is due to the 30 year fixed mortgage. When you
subsidize something, it costs more and you get more of it.

------
jberryman
> I feel under a lot of pressure all the time, and yet it seems I am not quite
> 'making it' financially or materially.

What is that supposed to mean?

------
Zweihander
You're not supposed to save and houses are supposed to cost multiples of what
you could possibly earn. Low interest rates for extended periods of time do
that. Without getting overly critical of Fed policies, you can also trace a
handful of the other issues in this thread to that.

------
ck2
The economy got shipped overseas.

A trickle at first but then like everything else the practice got optimized.

So the upper-end mostly survived. The low-end is being stepped on harder and
harder to squeeze more profit out of labor, any way they can.

------
rainer89
Watch "Kaiser Report" and u will find it.

SPOILER "quantitative easing"

------
grecy
As Beached says [1], this is all about your attitude, and how you're choosing
to live in the world.

Remember, you live in the consumption capital of the world. More than ever,
you're being bombarded from all sides at all times with ingenious advertising
designed for the sole purpose of separating you from your money. Even your
friends, family and colleagues are constantly encouraging you to spend more
and more, even when they don't know they're doing it. You've been lied to your
entire life - you've been told that spending ever-increasing amounts of money
will make you happier and "better off" and it's plainly not true.

Why do companies advertise stuff? Solely to further their own agenda. It's not
about you.

I just finished reading "Your Money or Your Life" [2] - an excellent book that
walks through the steps needed to break out of the cycle you're stuck in. It's
a little self-helpy, but the message is great, and if you follow the steps
they outline, you'll absolutely be completely financially independent and
won't need to go to work if you don't want to. Of course, you can if you do
want to.

The tldr; is very simple - stop consuming so much stuff you don't need that
isn't making you any happier, at which point you'll find you earn more money
than you need, so you can work less and focus more on the things you want to,
then you'll spend even less, etc. etc. etc. The amount of money you spend is
directly related to the amount of time you must go to work. Spending is not
what you want to be doing.

Find the things that make you happy, and focus on those. Spending money does
not equal happiness, so stop playing that game.

From my personal perspective, I highly, highly, highly recommend taking a
couple of years off to figure out what actually makes you tick. I spent two
years driving Alaska->Argentina because I wanted to, and another friend that
is unemployed right now has never been happier and more in touch with herself
in her entire life. The first couple of months feel strange and awkward and
lazy, etc. After a while, you become so busy with what makes you happy you
can't imagine how you ever found time to go to work. Once you have that
perspective, it's doubtful you'll feel happy consuming, because every time you
do that, you have to work more.

[1]
[https://news.ycombinator.com/item?id=7315456](https://news.ycombinator.com/item?id=7315456)

[2][http://www.amazon.ca/Your-Money-Life-Transforming-
Relationsh...](http://www.amazon.ca/Your-Money-Life-Transforming-
Relationship/dp/1591797306)

EDIT: Just for fun, do an audit on how much you spend month-to-month. Include
every single cent that you pay out. Cable, Internet, Cell phone, gas, car
insurance, food, groceries, snacks, clothes, shoes, transport, entertainment,
vacations, personal grooming, lifestyle things, etc. etc. etc. I guarantee
you'll be shocked at how much money you're spending on crap you don't need,
and didn't consciously know you were spending it on. I make a fraction of what
you make, and I'm saving more than I ever have in my life, simply by being
extremely conscious of all the crap I don't need to spend money on.

~~~
bargl
@grecy, do you follow Mr. Money Mustache? He is all about cutting costs in
ways I'd have never thought of. His goal was to retire early, but it could be
anything. This requires quite a bit of "badassitude" as he would say.

[http://www.mrmoneymustache.com/](http://www.mrmoneymustache.com/)

I'd also agree that taking some time off is very helpful. I took 1 year off to
do some volunteering. It taught me to live a simpler life and respect for the
dollar (when your income is 0 you make it work the way you can).

~~~
humanrebar
I like frugality, but rushing to live on a fixed income seems like a big
mistake. People on fixed incomes are especially sensitive to externalities
such as assuming their investment returns will outpace increases in prices and
taxes.

For example, if increasing capital gains taxes or introducing a consumption
tax become popular, people living frugally on modest investment incomes will
be hard-hit. Considering that someone in his thirties could easily live
another 50 years, it's hard to adjust retirement savings goals to match that
sort of risk.

On top of that, careers are the biggest investments of most people. The idea
of abandoning that investment and assuming the risks of a fixed income
lifestyle seems half-baked to me.

Anyway, that being said, I like his attitude and tips on spending, at least
when he isn't spending inordinate amounts of time on something to save a few
bucks.

~~~
grecy
> _Rushing to live on a fixed income seems like a big mistake_

And you've missed the entire point.

The point is to live on a fixed income _if you want, for however long you
want_. If you don't want to, just pickup some work and supplement that fixed
income.

Choice and options is the point.

~~~
humanrebar
I understand that point, and to rephrase my objection, I am concerned that
people are accidentally trading long term choice for short term choice. There
are many aspects of living within one's means that are out of the control of
the individual.

For example, if a young person retired 20 years ago, he probably would have
done a poor job budgeting for increases in prices for healthcare, especially
given what the individual market looks these days. If, after a twenty year
absence from the workforce, he is forced to work again, he will rapidly be
approaching traditional retirement age with a large gap in work history and
limited career options.

Maybe working or volunteering on the side can keep his skills sharp, but how
easy will it be to convince potential employers of that fact?

It's possible that people are saying "retirement" when they mean "frequent
sabbaticals", in which case, some better labeling of that lifestyle choice
would clear up my confusion. Even then, I wouldn't blame a potential employer
for being wary to give challenging job openings to sabbatical-takers due to
the higher risk that they'll take off.

