The threshold household income where a family can afford housing, healthcare, childcare, and transportation without relying on means-tested benefits is a lot higher than the official stats suggest.
The threshold household income where a family can afford housing, healthcare, childcare, and transportation without relying on means-tested benefits is a lot higher than the official stats suggest.
Part 1 (which you are reading) points this out:
Part 2 is here.
Part 2 points out that all these inflating assets (401k plans, homes, etc) depend for their value on the next generation to ultimately be wealthy enough to want to buy these at a future date at a higher price. The whole “asset inflation” spiral seems like a ponzi scheme of epic proportions since that doesn’t appear to be shaping up.
Part 1 is the one I have more experience with and yet so many people refuse to believe it exists. Prefect example. Last year my son for approved for SSI benefits, about 300 dollars a month. Great right? Some much needed wiggle room for a family that relies on disability benefits, SNAP, housing assistance, etc right?
Well that income change triggered a reduction in our SNAP benefit and an increase in our income based rent. So that additional 300 a month cost us about 250 dollars in benefits and now we have to keep meticulous track of where every cent of that SSI gets used on our son’s behalf. Lucky for us in this particular instance we’re allowed to just say “we’re putting it all towards rent” every month and have it be fine.
The system wants everyone Numb or Dumb.
For extremely successful people, they are busy out of their minds and distracted with sports, shopping, zoned out on comfort and affluence living in a privileges bubble.
For everyone else, the situation is just this futility of never being able to make it. The system is geared to keep everyone stuck and subservient and employable and dependent. Caught in a system of traps that seem designed for maximum inertia.
People either don’t Want anything to change or feel Powerless to make it change. I don’t meet many people who are working to replace the system.
what are they going to replace it with?
nobody is offering them a compelling alternative.
the current system works for 10% of the population, which is enough for most people to feel like they have a shot at making it.
I’ve not beaten the system but am better off and am now out on a limb, but i went from working for someone else to self employed.
My business makes more money now then I ever could working for someone else.
But fuck is a lot of work and if I screw it up it will al go away.
When my youngest son was born we were barely making it and looked into getting benefits.
We were told we were disqualified for around $500 a month of various benefits (housing, food, etc) because I made $50/month too much.
The eligibility cliffs are a rough place to be yeah. Even when you don’t immediately lose the entire benefit you get screwed but my Gods do you get screwed when it’s just “Nope, you make too much money. You get nothing.”
Having to be very careful about pay ranges for jobs you pick up because there’s a big glaring red zone where you lose a bunch of benefits without making enough money to replace them. That raise you just got? That was actually a pay cut nerd. Have fun.
Fuck it, let’s burn it all down then.
sees username
I think you might be a bit biased.
I’ve never willingly paid a cent into any of that bullshit (401k, home equity, etc.) and I’ve never had a credit card, either. It may’ve initially been rooted in a severe distrust of a system that hadn’t shown a single instance of not fucking me sideways at every opportunity, but it’s grown into a dystopian “I told you so” as the decades’ve passed and those around me are positively agog when the leopards eventually dine on their faces. 🙄🖕🏼
Thafuq did you think was going to happen?!
The 2008 global financial crisis had all these deep causes, but the timing came in an interesting moment in history. 2008 was right around the exact moment that the first / oldest among the baby boomer generation were reaching the retirement age.
That generation was really the first cohort to really go all-in on personal investing and financial assets for funding a retirement.
Anyhow, as a result, many many of these people had their nest eggs wiped out, losing as much as half their life savings. The media carried all these stories about how people would think they were investing in a car company (say GM) and then lose money in a supposed housing market melt down (through GMAC mortgages). In the murky web of global finance everyone was exposed to toxic assets.
I do not believe the boomers retiring caused the crisis, but rather it worked the other way around, that the bigger the pile of loot became the more tempting it was to raid the money.
But, yeah…just to echo your personal stance, I got to watch all my family and relatives fail to retire. The whole thing was a stark lesson. I sold all financial investments in 2010 which was basically (adjusted for inflation) the first reasonable rebound of the market. I’m very happy I did so and have never reverted.
Don’t mistake money for wealth!
The farther I stand back and squint, it looks like a giant casino. Everyone is all into “momentum investing” where it’s all about hopping onto hot stocks and hopping back off at a higher price, basically it has nothing to do with actual companies with actual business ideas making actual products that improve lives. Its just people making a quick buck for playing with extra money. Nothing could ever go wrong.
Have you been preparing to retire since 2010, and if so how?
Sort of? Due to my age, the year I would hit traditional retirement age is later than many of the predicted crises becoming emergent (combined crop failures, climate change, financial collapse, peak oil, etc.). So basically my personal discount rate looks radically different from most people I know around my age because most people are either not collapse aware or they deny the implications of collapse as a self defense mechanism.
So I see myself as having semi-retired or active retired extremely prematurely. I did a bunch of travel and moved around and found a new life when it was still kind of cheap and easy before covid. I traveled 50,000 miles in an old van over 5 years for the total budget of 2 months income on the job I walked away from. The highest cost was the opportunity cost, like not working and earning during those 5 years. Travel was cheaper than living in one place when I had a job.
When covid hit I was living in an ecovillage bordering 2 million acres of forest and mountains and the world didn’t change really at all, except seeing more cool predators on hikes. I was already ahead of the curve.
I have a collapse job (think professional scavenger) and its extremely countercyclical with the health of the overall economy. I live well below my means and save money on very few hours of compulsory work. I actually volunteer in my community as much as I work for money. I basically pulled out of the rat race around 2010 and have been building a life I really like since then. How do you eat an elephant? A bite at a time. I am prepared do continue this way until it’s not possible, I don’t care about age at all.
This is covered in the article but being available to work he says costs a family about $50,000 (clothes, commuting etc) a year. I now work from home in my pajamas and fill a lot of my needs directly instead of buying in the market. So stuff like gardening, yard work, car repairs, home repairs etc I do for myself because I have the time. I have developed a weird array of skills that would get me through the Apocalypse. I can garden, fix drywall, repair a chainsaw or do your non-profit’s taxes. It didn’t start out like this.
Getting out of the rat race was hard. Its not difficult to stop but its hard to let go completely. Like letting ambition and success fall away and rebuilding an identity based on self reliance was harder than my previous career ladder.
[ * ] most of my peers seem to be running on a treadmill. Like piling up money in a high cost of living area they seem to never really get anywhere, and >poof< that’s their real life! Like they are chasing a mirage with their real one only life. My one friend is going to be the best 85 year old scuba diver one day when he retires! He will have so much money then.
When you get the call, hang up the phone.
TLDR read the parable of the fisherman.
what is ‘real’ wealth according to these people? cash only?
To the rich, the thing of value is their membership in the elite ownership class. Like their pedigree, station, title and position means they can call the shots. He talks about how they go to the right school, know the right people and get paid in company equity.