Shipping container Inflation! (700%)

[Borderland]

I’ve been following some of the current housing market too, though I’m sure there are people more knowledgeable than me. One contributing factor is that investment firms are using their clout to buy fairly large number of homes in areas with growing economies.

This article is from Slate, but is fairly even handed and matches what I’ve seen from other sources.

https://www.google.com/amp/s/slate.c...eal-estate.amp

I've seen this here. I talked to a realtor awhile back that did some research for me on a house that sold in Bellingham WA. about a month ago. The house was listed at about 575K which is about average in that area. It sold in 5 days with 4 offers. Three were cash no contingency and two were at least 5% over the asking price. One offer was a contingency on loan approval for the listed price. The realtor said that was typical of how sales were going in the area.

That cuts out the average person who needs a bank loan to buy an average house around here. Hedge funds are buying these houses and will turn them into rental investment property.

[Crow Hunter]

Again, I am a victim of my own experiences, but I will share what I am seeing "on the ground" in my area.

My wife is the head honcho in HR for a local company so I am exposed to this on a daily basis. The company she works for is a heavy industry manufacturing company. The company only requires that you can read and write and that you have not been convicted of a violent felony in the last 7 years and that you are drug free. You do not even need a high school diploma to work there.

The lowest paying job at the plant make $48,000 per year BEFORE overtime. (And there are always opportunities for OT) The more skilled jobs make significantly more. The company has a fully funded pension that will pay you 1% of the average of your highest 5 years of pay for every year you have worked there, indexed for inflation when you retire. It also has a 401k plan with a 6% match on top of the pension. The healthcare is amazing for the PPO plan ($250 Ded, $1,500 max out of pocket) and they also offer a high deductible HSA plan if you prefer. The cost for these plans are less than the cost to me for my HSA plan where I work. My wife truly cares for the employees and works 10-12 hours a day, 6 days a week plus working at home on her computer to try and make things even better for them.

For reference, the local county census data says that the median income for a household is $33,000k, for a family $40,000k and per capita $16,000k with a median home sale price of $100k for 2021. The MIT living wage calculator for the county says a "living wage" would be $24,440 for a single person.

So a person doing the simplest job in the plant, as a single person, makes 15% over what a family makes in the rest of the county and 2X the "living wage". So by most measures, pretty decent job for someone that may have never graduated high school and might even have a felony on their record?

Can't find people to work. Those that do, come in, can't pass the drug test. Those that do pass the drug test, might work for a month or two and then quit. Not go to another job for higher pay or better hours, just quit.

A little more than 10 years ago, I was inundated by requests for "help my XXXXX" get a job at her company because it was one of the few in the area that weren't laying people off. Now, crickets....

What has changed?

The population of the county and surrounding counties haven't significantly dropped. No major manufacturers have opened up facilities that didn't exist in '08-'11.

So some type of an external factor is involved, what? I have no idea.

We certainly live in interesting times, indeed.

[Duces Tecum]

Long term? Pretty common with a simple index fund.

PortfolioCharts.com is focused entirely on index funds.

[Welder]

That's entirely my point.

Being thrifty doesn't mean a person knows how to manage money. Many poor people with no financial planning for retirement and no idea of how to benefit from passive growth are very thrifty. Thus, you can't say they really know anything about how to manage money; they're just stingy, or thrifty, which is a character trait that isn't synonymous with financial literacy.

I don't think anyone believes that thriftiness = financial literacy. But my original post was in reply to Joe's point about people increasing debt in step with increases in income rather than applying some of that increase to their current debt load. I wasn't addressing financial literacy, I was talking about the financial 'arterial bleeding' (Joe's term in a later post) that many of us and / or our friends are all too familiar with. The reason I bolded it is because I've seen it happen in my own life and have to consciously fight it. I thought it was a good point and needed to be emphasized.

Of course I agree with and am familiar with the need to properly invest and plan for retirement. It's hard to do those things without getting spending under control first, though, so first things first. As such, living within your means and delaying gratification when necessary is a portion of proper money management. Your means =/= my means, so living within your means is obviously situationally specific. For some people, it means being happy with 3 houses instead of buying a fourth. For others it means only eating out once a month. Whatever. The concept is the same; the scale is different.

[Welder]

And in reply to another post, yes, 7% interest is a perfectly attainable goal. The value of the dollar decreases over time (time value of money), so you need to earn a certain percentage....say, 3% for example, just to hold the present value of your money. The first 3%, then, is really just to conserve your wealth rather than watch it erode. This is why bank savings accounts and CD's are not really doing a person any favors. I'm a little rusty and my Econ degree is 22 years out of date, but this is pretty basic and I doubt anything has changed since then with this concept.

If you want to play around with what you can do with an initial chunk of change and certain monthly / annual additions and some time, you can use something like the compound interest calculator that I found on Nerdwallet. You'll have to search for it yourself; I'm no good at linking stuff.

I heartily agree with the suggestions of index funds. In years past, Vanguard and T Rowe Price had good low-load funds. There are probably others these days.

[peterb]

Of course I agree with and am familiar with the need to properly invest and plan for retirement. It's hard to do those things without getting spending under control first, though, so first things first. As such, living within your means and delaying gratification when necessary is a portion of proper money management. Your means =/= my means, so living within your means is obviously situationally specific.

And there’s a balance to be found. I’ve seen people save diligently, always putting things they want to do on the “when we retire” or “maybe someday” list, and then have medical issues other other problems that put those plans out of reach.
The purpose of good money management is not to have the most money — it’s to have a good life.

[Joe in PNG]

And a lot of people just don't know how to buy things.

Too many people think that thriftiness means buying cheap crap, which breaks or doesn't work, and then they have to buy it all over again. A $10 pair of shoes is no savings if you have to replace them every two months.

[Borderland]

And there’s a balance to be found. I’ve seen people save diligently, always putting things they want to do on the “when we retire” or “maybe someday” list, and then have medical issues other other problems that put those plans out of reach.
The purpose of good money management is not to have the most money — it’s to have a good life.

Or just move to Alabama.

[farscott]

Being "thrifty" has nothing to do with knowing how to manage money well. The chickens came home to roost when the economy changed and all these thrifty old people like my grandparents had nothing but CDs and savings accounts, which today isn't too much different than lighting your money on fire given the ROI vs inflation.

It was more than financial literacy working against people. It was expensive to invest. Forty years ago, the 401k was relatively new, and the stock market had high barriers to entry. Rich people invested in the stock and bond markets. Those barriers included high commissions, even higher commissions for not buying shares in multiples of 100, and pricing only to the nearest 1/8 of the USD. I remember paying more than $120 of commission to my broker to buy 100 shares of CSCO on a limit order in 1991. I also had to make a long-distance phone call to place the trade with said broker. I had to go home to watch CNBC to see where it closed which was better than it was when I had to wait until the next day for the closing prices to be printed in the newspaper.

The early 401k and direct stock purchase plans (DSPP) made the market accessible to more people, the move to decimal pricing helped, and the ubiquity of 401k/403b/IRA plans helped even more. Now purchase commissions are gone as brokers make money by letting the trades be front run. Government bonds are easy to purchase using treasurydirect.gov, and the minimum has dropped to multiples of $100 from multiples of $1000. It is a lot easier and less expensive to invest today than it was forty years ago.

[Welder]

And a lot of people just don't know how to buy things.

Too many people think that thriftiness means buying cheap crap, which breaks or doesn't work, and then they have to buy it all over again. A $10 pair of shoes is no savings if you have to replace them every two months.

I, no crap, still have a pair of shoes I bought from Wal-Mart for $9.99 in the year 2000. They are slip-on "dress shoes" complete with those fugly fake cardboard tassles in the front. If you wear them on a motorcycle, the fake black leather glued to the top of the tassles separates in the wind and curls back, so now your tassles look like those add-on eyelashes that are all the rage these days.

They haven't left the property in many moons, and my gf says to expect to find them MIA one day.