patrick.net

thomas.wong1986 says

The average annual inflation rate for the entire period since 1913 has been 3.36% per year

3.36% a year adds up pretty quickly..

Just for Kicks...

down 25%

Property History for 1103 PORTO ALEGRE Pl
Date Event Price Appreciation Source
Dec 04, 2010 Listed (Active) $999,000 -- MLSListings #81056562
Nov 17, 2006 Sold (Public Records) $1,335,000 -- Public Records

tatupu70 says

3.36% a year adds up pretty quickly..

LOL! take up investing as a hobby!

thomas.wong1986 says

tatupu70 says

3.36% a year adds up pretty quickly..

LOL! take up investing as a hobby!

lol--that's how I know....

tatupu70 says

thomas.wong1986 says

The average annual inflation rate for the entire period since 1913 has been 3.36% per year

3.36% a year adds up pretty quickly..

which is why interest rate on the loan is enough to make up the inflation with margin of profit.

thomas.wong1986 says

Nomograph says

Meanwhile, the non-owner is generally saddled with rent payments that have inflated over the years, which can be a huge burden once the high-income years are in the rear view mirror.

What inflation ?
The average annual inflation rate for the entire period since 1913 has been 3.36% per year
Over the past 10 years we had inflation ranging from 1.5 to 3.7% annually, your point ?

3.36% inflation per year will erode your money away, it means that prices should double every 21 years. But if you have debt it will make it easier for you to pay it back. One of the major ways we are trying to get rid of the underwater homeowner problem is by using inflation. For example if someone is 15% underwater within 5 years they should be back to normal.

Now the real kicker is that currently we are trying to prevent deflation with all the QE1, QE2, ect... This huge influx of money is just barely working because of the great economic crisis that happened. A few years from now when things are rosy again we should get a spike in inflation because the FED will be too slow to act when pulling the extra money from the economy.

So there's a cheetah and a lion racing...

...The cheetah ends up winning but the lion tells him "hey you a cheetah!" and the cheetah says back "nah you lion!"

Hope a bad joke will cheer you guys up.

fewy says

thomas.wong1986 says

Nomograph says

Meanwhile, the non-owner is generally saddled with rent payments that have inflated over the years, which can be a huge burden once the high-income years are in the rear view mirror.

What inflation ?

The average annual inflation rate for the entire period since 1913 has been 3.36% per year

Over the past 10 years we had inflation ranging from 1.5 to 3.7% annually, your point ?

3.36% inflation per year will erode your money away, it means that prices should double every 21 years. But if you have debt it will make it easier for you to pay it back. One of the major ways we are trying to get rid of the underwater homeowner problem is by using inflation. For example if someone is 15% underwater within 5 years they should be back to normal.
Now the real kicker is that currently we are trying to prevent deflation with all the QE1, QE2, ect… This huge influx of money is just barely working because of the great economic crisis that happened. A few years from now when things are rosy again we should get a spike in inflation because the FED will be too slow to act when pulling the extra money from the economy.
So there’s a cheetah and a lion racing…
…The cheetah ends up winning but the lion tells him “hey you a cheetah!” and the cheetah says back “nah you lion!”
Hope a bad joke will cheer you guys up.

I don't think we'll get that type of inflation. Incomes have been going down and there is a lot of downward pressure there.

When thousand people show up for 40 positions a company isn't going to pay top dollar, they will reduce wages since they can hire cheaper. (This was on abc7 news today when they showed a new hyundai dealership opening and a huge line of applicants for the jobs). Just over a 1000 applicants for 40 positions.

Inflation occurs when people make more money and they can negotiate higher wages due to low unemployment, housing bubble was artificial inflation which basically erode our economy for next 10+ years, it will take a while before we rebound.

Most Americans are competing for wages with China/India. I expect things to get a lot worse. Best thing is not to buy houses or whatever crap, IMO best thing to do now is to open up a sustainable business.

ChrisLosAngeles,

You described the most simplistic case for inflation when in comes to salaries, the real problem has many more variables than just unemployment numbers. First if your general statement was true it would mean we should have had huge salary inflation between 2004 and 2008 when unemployment was between 4 and 6 percent. Second an increase in the general money supply if it is large enough will cause inflation or decrease deflation like it is happening now. Granted that times are bad but so much money has been put into circulation that it should turn the economy around. This is a simple problem of more money chasing the same amount of goods at some point things start to cost more.

Now on to the really crazy stuff of why we didn't get salary inflation between 2004 and 2008, it was the Bush tax cuts. I told you it was going to be crazy but hear me out. A lot of studies have been done in the 1800's to 1900's on taxes and the economy. Everyone of us has a number that we consider a living wage. This is the number that we must earn to live our lives. When inflation occurs this living wage should increase to maintain our standard of living. With the Bush tax cuts people all of a sudden got more money increasing the standard of living, they didn't need to have wage increases because of this. But this is only a temporary change in the system because you usually can't keep the tax cuts or keep increasing them. Back to the studies that were performed, when the government increased taxes people of course took home less money and that didn't meet their own living wage number. For the next few years after a tax hike wages increase to meet peoples expectations of a living wage. The great thing about increases in salaries is that they are sticky, meaning once they go up they tend not come down.

Found a broker that will take my wife’s income into account and preapproved us, he was recommended by 3 different friends. Agent even told us after she found out who our broker was that he put money up to consolidate her debts and refinance house that she was going to loose when her husband unexpectedly died before she got into real-estate. Agent that has been working for us has also been a really good communicator, not pushy, and stays on top of everything unlike some of the lazy ones in the past. Made an offer that was accepted on a foreclosure that was 330k about 30k more than I could have gotten on my own income with my down. Things work so much better when people know what they are doing. Escrow closes end of this month if all goes well.

sybrib says

from a review on Amazon
The Two Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke
http://www.amazon.com/Two-Income-Trap-Middle-Class-Mothers/dp/0465090826
… Because so many families are now two income dependent they have become trapped and are more financially vulnerable than previous generations. Many families use all of the income they receive from both husband and wife, and barely get by. As a result, any interruption of the income flow can result in disaster. One telling statistic: today’s two-income family earns 75% more money than its single-income counterpart of a generation ago, but actually has less discretionary income once their fixed monthly bills are paid.

Really more of a spending problem than anything else.

Really, many of the people on here are so full of this “entitlement” mentality it’s almost unbearable.

What I want to know is how people can toss around figures like $70-100k for a typical person's income in an economy like this. What kind of jobs pay these exorbitant wages, what skills do they require, and who do I call to get one of them?

Well, mine requires at least a bachelor's degree in computer science and 5 years experience, preferably in Biotech. I have a M.S. in Biophysics and a B.S. in Comp Sci, and 7 years experience. If you rack that up, I can safely say you could be making that at my company.

My wife's job requires a comp sci degree and probably about 7 years experience. She makes more than me.

My first job out of school with just a CS degree was 45k in 1997.

Michinaga says

[i]Really, many of the people on here are so full of this “entitlement” mentality it’s almost unbearable.[/i]
What I want to know is how people can toss around figures like $70-100k for a typical person’s income in an economy like this. What kind of jobs pay these exorbitant wages, what skills do they require, and who do I call to get one of them?

I can only speak to jobs and salaries that are in my daily sphere of personal knowledge and experience. CHP cadets (recruits) in the academy (all food and housing is provided while in Sacramento) make 65K while they're training for 5 months and then their salary goes up from there. With a few years on the job and a little overtime an officer can easily make 90-100K a year (and no, the CalPers pension is only calculated on the base pay - OT doesn't count).

CPA is another job in demand, but it requires at least a BA in tax and many have an MA. My family has many CPA's in it and they all make good money. Granted they have been doing it for 15-20 years, but the least paid is at 187K and the salaries for the others go up from there. The headhunters are calling at least twice a month trying to get them to move so there is demand in the CPA/accounting field. Two weeks ago there were a few 90-100K job openings for CPAs/accountants at the studios down here as well as a few managment positions at the studios that pay more.

There are lots of people hurt by this economy and I have said here on patnet before that it's a rough road for many, but there are also a lot of people working and making good money. Every recession is the same and I have been through several of them.....some hold on and others unfortunately don't. I was lucky enough to always be working in the public sector when they rolled around so I was able to hold on.

Michinaga says

[i]Really, many of the people on here are so full of this “entitlement” mentality it’s almost unbearable.[/i]
What I want to know is how people can toss around figures like $70-100k for a typical person’s income in an economy like this. What kind of jobs pay these exorbitant wages, what skills do they require, and who do I call to get one of them?

People who are calling the bottom should read this.