This morning I had the pleasure of reading the best financial post in a long time, on "Of Two Minds." Why doesn't the destruction of middle class wealth by the ratholes of health care, higher education, and housing get more attention than tanned female Olympic athletes frolicking in cheeky leotards or exultant NASA nerds imitating Olympic victory celebrations for their latest successful Giga-boondoggle?
Early retirement, mainstream-media-free, bicycling, classic books & history, RV camping, and dogs.
Comments
My grandparents didn't even dream of sending their kids to college but my parents did. My parents had the money but it wasn't even possible for my grandparents to get that kind of money, no matter how hard they worked.
Yes, I think it's true that college no longer is what it was in the past but in my generation it was indeed the ticket to making money. Likewise, home ownership is no longer what it used to be in the sense that you can't count on inflation to double your money.
I wonder if it is possible though for a society, any society, to maintain such a large and wealthy middle class as we have created in this country. Many societies were composed of a few rich and powerful and many very poor and, if there was a middle class, it was small, much much smaller than our large middle class.
I don't know that the resources actually exist to enable such large numbers of people to live so well. Unless, of course, it's on credit and that isn't going to work anymore either.
In my opinion the best gifts we can give our children are to teach them to think and be self-sufficient, encourage imagination, and blow the dang box up so they can see all the possibilities life has to offer.
Kids who learn that won't have to worry about being stuck in the rut of the declining middle class. They'll be off doing there own thing and having a great time!
Maria, I hope you implied that you are living a television-free life. You started me thinking on whether I should mention "TV-free" in the subtitle of this blog. I don't see how any mental independence can exist with a television in the house.
Sondra, the alternative to being active in the financial markets is to let inflation reduce you to poverty in old age. It most assuredly will.
Larry, you're welcome. Glad you liked the link.
Education: It's still a good investment if you have the right degree. There is a serious lack of engineers (in most industries) and scientists (especially in biotech)in the private sector. The author uses PhD candidates looking for jobs in the academic sector as an example. That may be true, but "real" companies are desperate to hire engineers/scientists in the private sector. No offense to liberal arts majors, but if you graduate from college with $100,000 in debt and a degree that any job counselor could have told you is not in demand or offers a low salary, then part of the blame belongs on the student and the parents for choosing that path. As for skyrocketing education costs, it's not the fault of the "education cartel" as much as the government/banking cartel that has driven up costs. Throw easy credit money that can't be dissolved through bankruptcy (student loans) at any product/service and the price charged for the service/product will increase accordingly. Banks will accrue moral hazard and loan to anyone who can fog a mirror if they know they are guaranteed to be repaid. No underwriting required!
Housing: Like education, costs also ballooned here due to easy money policies. However, housing wasn't seen as a get rich quick investment years ago. The old model of 20% down and you paid off a mortgage over 20-30 years was one that allowed people to live in dignity and accumulate some wealth/ROI slowly and steadily. That model would still work, housing prices would come down to levels reflecting the growth of inflation, it would still be a reasonable investment, and far fewer people would be underwater if the 20% down and 20-30 year mortgage was still the norm
rather than the exception.
Healthcare: There isn't enough room to cover all the issues here. Unlike the author, I wouldn't consider it an "investment" to start. However, the cost of medical care could be reduced if we had transparent competitive pricing nationwide that wasn't hindered by insurance companies and the government. We in the US also bear most of the cost burden for pharmaceutical R&D in this country resulting in obscene drug costs here vs other countries. In the end, the best "investment" you can make in healthcare is in a healthy lifestyle.
Sorry for the long post. I don't like to read articles that correctly talk about problems but incorrectly assess cause and effect. This discussion, along with income stagnation and corruption in our "trusted" institutions, belongs over a campfire. :-)