Author Topic: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years  (Read 6765 times)

ManlyFather

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From: http://highline.huffingtonpost.com/articles/en/poor-millennials/

"he learned that city bus drivers earn $22 an hour and get full benefits. He’s been doing that for a year now."
"He still lives at home, chipping in a few hundred bucks every month to help his mom pay the rent."
"graduated from college with a bachelor’s in economics, a minor in business and $30,000 in student debt"
"At his current job, he’ll be able to move out in six months. And pay off his student loans in 20 years."

Wow.

What do you think?

Warlord1986

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #1 on: December 14, 2017, 07:36:28 AM »
I'm not even going to click on the link, I know it will only tick me off. Just the part you quoted filled me with secondhand embarrassment.

Just Joe

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #2 on: December 14, 2017, 07:57:32 AM »
'cause you can only pay the minimum on those loans - right?

He's making $45K gross which MMM members have proven can be stretched a long way.

Hopefully he won't go the "normal way" and start buying stuff and grown up toys like ATVs and motorcycles before he pays off his loans.

Now that he is out of school its a great time to distance himself from distractions (the medias) and add in a component of self-studying MMM style finance.

Through this he might dare to venture outside of his home town to more prosperous parts of the country or the world.
« Last Edit: December 14, 2017, 08:08:44 AM by Just Joe »

UKMustache

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #3 on: December 14, 2017, 08:03:50 AM »
As a non-American the healthcare costs in the article are terrifying.. the rest is a bit of a pity party tbh.

Dabnasty

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #4 on: December 14, 2017, 08:12:25 AM »
I started to do the math but then I thought wait, I don't make much more than this and I stash 25k+ annually. Granted that's largely tax deferred but if he's paying a few hundred per month in rent and probably getting some free food at home he should be able to pay this off in less than 2 years. I'm also assuming full time bus driving, don't know how those hours work. And I don't know where he lives but regardless, 20 years was just a stupid thing to say.

One thing I can be sympathetic of is the fact that so many jobs for college graduates disappeared during the recession and when things recovered employers weren't looking for those who graduated in 2008 and had no experience, they wanted the fresh class with potential. That put some people in limbo where they didn't use their degree for 4-5 years and then they were less qualified than the day they graduated.

There were some other interesting points in there as well but by using the example of someone making $22/hour the author kind of killed their point. I wish, maybe just every once in a while, one of these articles would use a bit of math when they make these claims.

asiljoy

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #5 on: December 14, 2017, 08:20:10 AM »
This is a poorly written article that is leaving out loads of details, but I filled them in differently than you did. I read it that he had 30k in student loan debt when he graduated in 2010 with a degree in business and economics. Couldn't get steady work, so accrued more debt while I'm guessing he deferred his loans while not working (again, details left out so I'm making assumptions), and had to move in with his parents in order to keep his head above water. He's decided against getting a masters degree and gaining more debt because he already took the right path once and he still ended up a bus driver. If he got his loans during that before 2010, it's entirely possible that he's refinanced his loans to 3% and paying them early would be a poor financial move when he's trying catch up his savings/move out. I filled the lines in this way because that's what's happened to my friends.

 For me, the more interesting bit was the hypothesis that those kids/students that come of age during recessions are going to forever be behind those that didn't in terms of earning power. “Employers didn’t say, ‘Oops, we missed a generation. In 2008 we weren’t hiring graduates, let’s hire all the people we passed over.’ No, they hired the class of 2012.”

This has been my experience. I opted to go back and get my masters for no other reason than my bachelors got stale and wasn't getting me interviews, but then I was lucky to graduate with my MBA into an environment that was hiring. It's all a gamble though. It's entirely possible that I'd have ended up with 80k in student debt working at Starbucks instead of making 6 figures doing analytics; for me, I'm reasonably sure that had one interview gone differently, that would be the case actually. So I understand why people are hesitate to try again when there isn't a clear path forward.

I wasn't able to get to the end of the article though because holy crap all that bouncing around/visualization was freaking annoying and made reading hard. I think I stopped around the bit where they randomly threw in ads and I starred at them trying to figure out wtf they had to do with the article before realizing that they were fake ads that were tangentially related to the content, kinda.

Chesleygirl

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #6 on: December 14, 2017, 08:36:27 AM »
I don't see anything wrong with what the guy is doing here. He's working full time, being a productive citizen, helping his mother pay rent. Yes, it's unfortunate that he has debt but at least he wants to try and pay it off.

Just Joe

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #7 on: December 14, 2017, 08:40:17 AM »
If he is happy then I'm happy for him. He doesn't seem to be very happy. Hopefully he won't give up.

ManlyFather

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #8 on: December 14, 2017, 09:08:27 AM »
He's decided against getting a masters degree and gaining more debt because he already took the right path once and he still ended up a bus driver.

Maybe going to college with money you don't have, and no plan for afterwards, perhaps that's not the "right path."  There's ABSOLUTELY NOTHING WRONG with being a bus driver (especially one that gets benefits at makes $45k/yr).

Warlord1986

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #9 on: December 14, 2017, 09:23:25 AM »
He makes more than $45,000 a year. I make $43,430. It sounds like he pays less in rent than I do. I have no sympathy for the guy. Especially since as a local government employee he would an internal candidate for any job openings. He could find a second job in his downtime, brush up on his skills (learn a new language, volunteer for a organization that needs an economic/business grad, etc.) and keep an eye out for opportunities.

Chesleygirl

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #10 on: December 14, 2017, 09:41:50 AM »
He's decided against getting a masters degree and gaining more debt because he already took the right path once and he still ended up a bus driver.

Maybe going to college with money you don't have, and no plan for afterwards, perhaps that's not the "right path."  There's ABSOLUTELY NOTHING WRONG with being a bus driver (especially one that gets benefits at makes $45k/yr).

Agree. There are people who would envy his job and benefits. Lots of college grads are not earning $45k/yr.

asiljoy

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #11 on: December 14, 2017, 10:13:52 AM »
He's decided against getting a masters degree and gaining more debt because he already took the right path once and he still ended up a bus driver.

Maybe going to college with money you don't have, and no plan for afterwards, perhaps that's not the "right path."  There's ABSOLUTELY NOTHING WRONG with being a bus driver (especially one that gets benefits at makes $45k/yr).

Agree. There are people who would envy his job and benefits. Lots of college grads are not earning $45k/yr.

Totally fair. Bad phrasing on my part.

Chesleygirl

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #12 on: December 14, 2017, 12:28:57 PM »
The cost of college has grown over the years. In the 80s it was more realistic to pay off student loan debts within a few years. Not anymore. Even the local community college where i live has raised their tuition every single year. State university used to be the more affordable choice, now that's gone up as well. And many parents have heard the advice that "there's no scholarships for retirement" so they fund that and not college. I decided to set up 529 plans for my own children. I knew a young woman who worked 3 jobs in college and almost never slept, and started having seizures as a result of trying to stay awake almost 24 hours a day. I knew I didn't want my own children to go through that as young adults.

neophyte

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #13 on: December 14, 2017, 01:25:33 PM »
He's gonna pay it off in 20 years because it's at less than 4% and he's focusing on maxing his 401(k), IRA and HSA, right? Right? Please tell me that's the case.
I've got more than that in mortgage debt and don't make much more than him and that's what I'm doing.

I knew a young woman who worked 3 jobs in college and almost never slept, and started having seizures as a result of trying to stay awake almost 24 hours a day.
One of my classmates died as a result of falling asleep behind the wheel on her way home from her night shift. :(


ManlyFather

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #14 on: December 14, 2017, 01:35:30 PM »
The cost of college has grown over the years. In the 80s it was more realistic to pay off student loan debts within a few years. Not anymore. Even the local community college where i live has raised their tuition every single year. State university used to be the more affordable choice, now that's gone up as well. And many parents have heard the advice that "there's no scholarships for retirement" so they fund that and not college. I decided to set up 529 plans for my own children. I knew a young woman who worked 3 jobs in college and almost never slept, and started having seizures as a result of trying to stay awake almost 24 hours a day. I knew I didn't want my own children to go through that as young adults.

Yeah, college is stupidly expensive now.  I had to pay for college all on my own, and it ended up being $130k.  I paid it off in less than 5 years.  I didn't study abroad, I lived in housing marginally better than a cardboard box, never went to bars, and got my food primarily from places called "grocery stores".  I'm sharing this to illustrate that a millennial CAN go to college with no money and still come out just fine.  It's true that things were cheaper in the past, but that's irrelevant to our situation today.  All this whining and complaining is pretty annoying.

slugline

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #15 on: December 14, 2017, 02:57:53 PM »
Leaving aside the guy who will owe $30K forever, I do think the writer brought up some great points regarding restrictive regulations that are constricting the housing market. New development of proper urban neighborhoods is pretty much illegal now in many American cities, so the ones that are left are now caught up in a bidding war.

MrsPete

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #16 on: December 14, 2017, 07:34:33 PM »
I started to do the math but then I thought wait, I don't make much more than this and I stash 25k+ annually.
Yeah, I had the same thought.  I don't make a whole lot more than this, and I'm supporting a family of three and stashing away about 25% of my salary. 

MrsPete

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #17 on: December 14, 2017, 07:37:27 PM »
I knew a young woman who worked 3 jobs in college and almost never slept, and started having seizures as a result of trying to stay awake almost 24 hours a day. I knew I didn't want my own children to go through that as young adults.
Yeah, I lived that 2-3 job lifestyle in college. It wasn't easy, but I didn't take on any debt. 

Chesleygirl

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #18 on: December 14, 2017, 08:31:07 PM »
The cost of college has grown over the years. In the 80s it was more realistic to pay off student loan debts within a few years. Not anymore. Even the local community college where i live has raised their tuition every single year. State university used to be the more affordable choice, now that's gone up as well. And many parents have heard the advice that "there's no scholarships for retirement" so they fund that and not college. I decided to set up 529 plans for my own children. I knew a young woman who worked 3 jobs in college and almost never slept, and started having seizures as a result of trying to stay awake almost 24 hours a day. I knew I didn't want my own children to go through that as young adults.

Yeah, college is stupidly expensive now.  I had to pay for college all on my own, and it ended up being $130k.  I paid it off in less than 5 years.  I didn't study abroad, I lived in housing marginally better than a cardboard box, never went to bars, and got my food primarily from places called "grocery stores".  I'm sharing this to illustrate that a millennial CAN go to college with no money and still come out just fine.  It's true that things were cheaper in the past, but that's irrelevant to our situation today.  All this whining and complaining is pretty annoying.

Well, I don't feel really sorry for people who study abroad and then wonder why they have massive debt coming out of college. That's a want versus a need.

infogoon

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #19 on: December 15, 2017, 07:24:33 AM »
Leaving aside the guy who will owe $30K forever, I do think the writer brought up some great points regarding restrictive regulations that are constricting the housing market. New development of proper urban neighborhoods is pretty much illegal now in many American cities, so the ones that are left are now caught up in a bidding war.

Agreed. I live in an old "streetcar suburb" neighborhood that contains a lot of upper/lower duplexes, some triplexes, a couple of small courtyard apartment buildings. Maybe half the houses have a driveway. It's one of the most desirable areas in my city, and could never be built under current zoning laws.

ManlyFather

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #20 on: December 15, 2017, 09:23:08 AM »
Leaving aside the guy who will owe $30K forever, I do think the writer brought up some great points regarding restrictive regulations that are constricting the housing market. New development of proper urban neighborhoods is pretty much illegal now in many American cities, so the ones that are left are now caught up in a bidding war.

Agreed. I live in an old "streetcar suburb" neighborhood that contains a lot of upper/lower duplexes, some triplexes, a couple of small courtyard apartment buildings. Maybe half the houses have a driveway. It's one of the most desirable areas in my city, and could never be built under current zoning laws.

I agree the author brought up some interesting issues with zoning laws, but I think they are mostly irrelevant to the school loan-indebted millennial.  The reason things are "so hard" is because folks made really bad purchasing decisions with money they don't have and no adequate plans to ever pay them off, and just blaming problems on anything and everything that isn't oneself.

RidetheRain

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #21 on: December 15, 2017, 12:35:54 PM »
The cost of college has grown over the years. In the 80s it was more realistic to pay off student loan debts within a few years. Not anymore. Even the local community college where i live has raised their tuition every single year. State university used to be the more affordable choice, now that's gone up as well. And many parents have heard the advice that "there's no scholarships for retirement" so they fund that and not college. I decided to set up 529 plans for my own children. I knew a young woman who worked 3 jobs in college and almost never slept, and started having seizures as a result of trying to stay awake almost 24 hours a day. I knew I didn't want my own children to go through that as young adults.

Yeah, college is stupidly expensive now.  I had to pay for college all on my own, and it ended up being $130k.  I paid it off in less than 5 years.  I didn't study abroad, I lived in housing marginally better than a cardboard box, never went to bars, and got my food primarily from places called "grocery stores".  I'm sharing this to illustrate that a millennial CAN go to college with no money and still come out just fine.  It's true that things were cheaper in the past, but that's irrelevant to our situation today.  All this whining and complaining is pretty annoying.

Well, I don't feel really sorry for people who study abroad and then wonder why they have massive debt coming out of college. That's a want versus a need.

I'm going to be obnoxious here. I did study abroad in college. Including tuition, rent, necessities, travel, and plane tickets it was $3000 cheaper than going to my state university. I don't mean to derail, but I think it's a great experience that can be managed financially if you're careful. I don't want people to automatically assume that it's a bad financial choice if they really want to go (and can use the credits - lets not get crazy here)

Hargrove

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #22 on: December 16, 2017, 09:42:24 AM »
I'll throw in on the other side of this, because I think the article is more about society than individual experiences, and there's something valuable in there.

You can live on 45k: sure, and hell, especially with free rent! But even without free rent! No doubt whatsoever.
You can pay off those loans much faster than that: well, obviously!
It is harder for this generation than the one before it:

(pin drops)

Why ignore that one? Whether you're Mustachian or not, isn't the degree of change in the society we all live in something we might want to at least see, if it's indeed happening? How hard is it to imagine 45k falling apart with a health problem in the US? A bunch of people said "I handled it with less" without adding "In all my various particular personal circumstances, inherited and non-inherited." A country is made up of more than one of any of us, and the sum of its experiences is vastly greater than the sum of any one person's experiences.

My point isn't that we should all do a fundraiser for the author, but we should at least be aware that 45k in our situation is different from someone else's 45k. And the author nails the point about job security stress for young people. Not even Janet Yellen could tell them why wages weren't going up as unemployment dropped.
« Last Edit: December 16, 2017, 09:45:05 AM by Hargrove »

ManlyFather

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #23 on: December 16, 2017, 12:07:36 PM »
we should at least be aware that 45k in our situation is different from someone else's 45k. And the author nails the point about job security stress for young people. Not even Janet Yellen could tell them why wages weren't going up as unemployment dropped.

You're right: almost all of the examples in the article had car payments, leases, high rent, or student loans.  Maybe, instead of blaming society and the world economy for one's failure, a good starting point is, instead, to look at oneself.  Buying a car, or apartment, or education with money you don't have and complaining about the cost later shouldn't elicit sympathy from anyone.

The point about real estate being super expensive in extremely desirable locations is also irrelevant.  There are PLENTY of areas in the country with cheap housing one can buy.  Our parents' generation didn't complain that they couldn't by real estate in Manhattan when they were our age, why are we complaining we can't afford real-estate in other extremely expensive areas?  It's kind of the same thing.  Actually, it's not - our parents' generation had 15%+ interest rates on their home mortgages and crazy inflation eroding their buying power every year.  Neither of these HUGE issues were mentioned - the author primarily focused on hosting a pity party instead.

Perhaps instead of buying expensive phones, cell phone plans, and cars, this generation should focus on putting in some work before buying themselves rewards.

Reread the MMM complainypants article - much of what's in it is applicable to this article.

Hargrove

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #24 on: December 16, 2017, 12:23:54 PM »
It's hard to have conversations these days on social policy.

"Individual responsibility!" Right, there's that other topic, but here's a long article on social policy and how social contracts have changed...

"Individual responsibility!" Listen, that's, I would love to discuss that with you, but we're talking about social policy changes and major shifts in the society inherited by one generation as opposed to another generation...

"Individual responsibility!" Well, yes, that's important, and nobody... nobody... I... I'm not saying... hey, I mean, I LOVE individual responsibility! My, my best friend does the individual responsibility thing! I teach my kids about individual responsibility! What I'd like to talk about is that there is a sea-change in law and hiring practices affecting broad swaths of people in ways fundamentally different from...

"Individual responsibility!"

Ok. Individual responsibility.

ManlyFather

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #25 on: December 16, 2017, 02:00:03 PM »
The policy changes most people want to discuss are handouts.

"I made a bad decision - make a law/program/etc. to bail me out!"

"I want to buy a 5 bedroom house in downtown San Francisco, but I only make $12.50/hr and have $100k in debt from getting a master's in underwater basket weaving.  We need to make a law/program/etc. to help me get this house!"

"There aren't any good jobs, except for literally all of the trades.  But I don't want to work hard, so we need to make a law/program/etc. to help me have a job that pays me gobs of money and also provides me self-actualization!"

"I don't want to give up anything or endure any hardship at all.  Just give me exactly what I want, just like mom and dad did - we need a law/program/etc.!"

"Life isn't fair, previous generations had to fight in wars (because of the draft), live through depressions, be fearful of dying from communicable diseases, etc.  They had it harder, but I want to stick my head in the sand (or bury my face in my new iPhone X I bought on credit) and complain how it is actually ME that has it worse!"

"WAAAAAAH waaah waaaaaaaaaaaaaaaah!!!!"

Roadrunner53

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Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #26 on: December 16, 2017, 02:06:34 PM »
This is my take on this young man with a job making $45,700 a year.

If making a car payment, get rid of the car and get a good used car like a Honda.
Plan to stay with Mom/Dad till $30k is paid off.
Get a part time job doing anything, including flipping burgers.
Figure out how much take home from two jobs.
Set up a budget to pay Mom/Dad room and board
Plan to pay off college loans in two years.
To pay off $15,000 you need to save $288. 50 a week for a year. Times two years $30K.
Learn the phrase 'nose to grindstone'.

KodeBlue

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #27 on: December 17, 2017, 09:15:50 AM »
From: http://highline.huffingtonpost.com/articles/en/poor-millennials/

"he learned that city bus drivers earn $22 an hour and get full benefits. He’s been doing that for a year now."
"He still lives at home, chipping in a few hundred bucks every month to help his mom pay the rent."
"graduated from college with a bachelor’s in economics, a minor in business and $30,000 in student debt"
"At his current job, he’ll be able to move out in six months. And pay off his student loans in 20 years."

Wow.

What do you think?
Holy crap the visuals on that site! I made for about 10 secs then I said to heck with it.

damyst

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #28 on: December 17, 2017, 06:44:33 PM »
The policy changes most people want to discuss are handouts.

"I made a bad decision - make a law/program/etc. to bail me out!"

"I want to buy a 5 bedroom house in downtown San Francisco, but I only make $12.50/hr and have $100k in debt from getting a master's in underwater basket weaving.  We need to make a law/program/etc. to help me get this house!"

"There aren't any good jobs, except for literally all of the trades.  But I don't want to work hard, so we need to make a law/program/etc. to help me have a job that pays me gobs of money and also provides me self-actualization!"

"I don't want to give up anything or endure any hardship at all.  Just give me exactly what I want, just like mom and dad did - we need a law/program/etc.!"

"Life isn't fair, previous generations had to fight in wars (because of the draft), live through depressions, be fearful of dying from communicable diseases, etc.  They had it harder, but I want to stick my head in the sand (or bury my face in my new iPhone X I bought on credit) and complain how it is actually ME that has it worse!"

"WAAAAAAH waaah waaaaaaaaaaaaaaaah!!!!"

You're making a lot of strawman arguments here.

The article discusses the high cost of renting and/or buying in most U.S. metro areas, where the opportunities are concentrated. This isn't a Manhattan or San Francisco phenomenon.

The programs it argues for are largely ones that the previous generation already had, but elected to take away from their successors (because who wants to pay taxes when you can buy summer homes and boats instead). Programs like pensions, paid leave, subsidized in-state tuition.

I'm sure a lot of millennials would happily take on a 15% interest mortgage if the principal were equivalent to 20 months of their pay, rather than 10 years of more.

I agree that some of the anecdotal stories presented in the article don't actually strengthen its case, but the case is largely valid.

« Last Edit: December 18, 2017, 08:25:52 AM by damyst »

Just Joe

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #29 on: December 18, 2017, 08:54:36 AM »
Perhaps instead of buying expensive phones, cell phone plans, and cars, this generation should focus on putting in some work before buying themselves rewards.
Not only is that a straw-man, but it's a red herring. Most people don't buy expensive phones. Despite Apple trying to shove the iPhone X down our throats, the iPhone 6s ($449.00 to $549.00) was the best selling in 2017(source). Furthermore, 54% of people don't even replace the phone until it stops working, 44% replace it when their provider allows them to upgrade for "free", so only 2% are jumping on the next new thing (source). Figure a cellphone lasts about three years (about par for lithium-ion battery technology) that means that someone that gets an iPhone 6s is only paying somewhere between $149.67 to $183 per year, or $0.41 to $0.52 per day of ownership. Assuming you actually pay for it and don't just get it under contract. In the schema of things that's really not that much. Buying a coffee once a week is going to set you back more. Furthermore, it's not even really worth bringing up cell phone plans since bills for telecommunications have been part of the landscape for years now. How is paying $45/month for cellular service any different from paying that for a landline plus long distance twenty years ago? I just checked AT&T's website and they want "$62/month or less" for local plus long distance (source) so having a basic cell phone might actually be cheaper than having a landline. Plus, try to get by in this day and age as a young professional without having a phone of some sort.
[/quote]

Depending on a person's financial condition - phones, subscription TV, shopping in general can be financial death by a thousand cuts. 

MMM folks win by optimizing a hundred big and little things. The spenders do the opposite by dollar and diming themselves.

Not unlike compound interest that grows your 'stache vs compound interest that grows your lenders' 'stache.

Just Joe

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #30 on: December 18, 2017, 09:51:24 AM »
I specialize in that sort of thing.

I still think the low-$$$ choices are better. Avoid the fancy phone and the data plan. It might be $50 a month but that's $50 a person could spend on their student loans or cc debt. I'm in the camp of delay these purchases or minimize their cost ($20 phone, $10 PAYG month service). 

Cell payment, car payment, insurance(s), cc debt, cable TV, coffees/restaurants, shopping for distraction - - it all adds up and a person could double their debt payment to one lender and make it go away far faster.

That snowball effect Dave Ramsey talks about. I'm not a universal fan of DR but this is one topic that is a bright spot in his shtick.

Debtors wouldn't have to be part of the group that complains their that their debt is older than their children if they could/would continue to live like a broke college student for a couple more years while they pay down their loans. Same for the average suburbanite who bought a house and too much stuff and has maxed out their debt - but they have more overhead to juggle.

Simple math (no interest) says a $30K w/20 year payoff is only a $1500 year or $125 per month. Surely he could double or triple that number while living at home at reduced cost?
« Last Edit: December 18, 2017, 10:12:08 AM by Just Joe »

ManlyFather

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #31 on: December 18, 2017, 10:48:58 AM »
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Perhaps instead of buying expensive phones, cell phone plans, and cars, this generation should focus on putting in some work before buying themselves rewards.
Not only is that a straw-man, but it's a red herring. Most people don't buy expensive phones. Despite Apple trying to shove the iPhone X down our throats, the iPhone 6s ($449.00 to $549.00) was the best selling in 2017

...only paying somewhere between $149.67 to $183 per year

...So basically, quit insinuating that cell phones and cars are "rewards" that people should put off getting.

If you have less than no money (because you have a bunch of debt), you shouldn't buy an expensive cell phone. 

Also, if you have less than no money, you shouldn't be thinking that $149.67-$183 is an inconsequential amount of money.

Furthermore, it would behoove you to consider reward purchases (expensive cell phones and financed cars) as REWARDS.  Because they are.

If the folks in this article don't adopt these ways of thinking, they will continue to live a life of having less than no money.

Dabnasty

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #32 on: December 19, 2017, 08:13:43 AM »
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Perhaps instead of buying expensive phones, cell phone plans, and cars, this generation should focus on putting in some work before buying themselves rewards.
Not only is that a straw-man, but it's a red herring. Most people don't buy expensive phones. Despite Apple trying to shove the iPhone X down our throats, the iPhone 6s ($449.00 to $549.00) was the best selling in 2017(source). Furthermore, 54% of people don't even replace the phone until it stops working, 44% replace it when their provider allows them to upgrade for "free", so only 2% are jumping on the next new thing (source). Figure a cellphone lasts about three years (about par for lithium-ion battery technology) that means that someone that gets an iPhone 6s is only paying somewhere between $149.67 to $183 per year, or $0.41 to $0.52 per day of ownership. Assuming you actually pay for it and don't just get it under contract. In the schema of things that's really not that much. Buying a coffee once a week is going to set you back more. Furthermore, it's not even really worth bringing up cell phone plans since bills for telecommunications have been part of the landscape for years now. How is paying $45/month for cellular service any different from paying that for a landline plus long distance twenty years ago? I just checked AT&T's website and they want "$62/month or less" for local plus long distance (source) so having a basic cell phone might actually be cheaper than having a landline. Plus, try to get by in this day and age as a young professional without having a phone of some sort.

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Reread the MMM complainypants article - much of what's in it is applicable to this article.
Considering how horribly designed that article was, re-reading it is pretty painful.

You can't accuse someone of making a straw man argument based on your own definition of expensive. Clearly their definition of expensive is different than your own. Not sure if you are a millennial but I think this is part of the problem. If you don't think $450 for a phone that lasts 3 years is expensive I don't really know what else to say. I've had the same phone for 7 years - $50 new, which of course is an anecdotal outlier, but the assumption that buying an iphone is justified because everyone else is doing it?

I mean, I get what you're saying about human nature and the way people behave but that doesn't mean you should defend the mistakes that keep people in debt. In fact I think that's what MMM and the frugal community in general are all about. We know we are the outliers but we're confident that we have it right and that the majority (also known as normal people) has it wrong. I will continue to hold the opinion that buying a $450 phone before you are FI is a poor decision and I also acknowledge that many people will continue to do so.

ManlyFather

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #33 on: December 19, 2017, 08:21:09 AM »
If you don't think $450 for a phone that lasts 3 years is expensive I don't really know what else to say. I've had the same phone for 7 years - $50 new, which of course is an anecdotal outlier, but the assumption that buying an iphone is justified because everyone else is doing it?

I mean, I get what you're saying about human nature and the way people behave but that doesn't mean you should defend the mistakes that keep people in debt. In fact I think that's what MMM and the frugal community in general are all about. We know we are the outliers but we're confident that we have it right and that the majority (also known as normal people) has it wrong. I will continue to hold the opinion that buying a $450 phone before you are FI is a poor decision and I also acknowledge that many people will continue to do so.

Thanks Dabnasty, I was beginning to think I wasn't on the MMM forum!

ProxyRetired

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #34 on: December 19, 2017, 09:16:12 AM »
I'm always a bit puzzled , and maybe it's because I live in my little corner of the world, but...

... he got his degree in economics and a minor is business. What does he want to do with it? Do people not have goals or targets? I've always viewed a degree in economics a bit like a degree in psychology. It's nice to have, but ... there isn't a lot you can do right out of the gate? He didn't have a goal? Unless you land that prestigious internship or have a job lined up afterwords, a degree in economics doesn't really do squat for you. Jobs in certain fields require specific licenses or advanced degrees to work in that field. He didn't think "Hey, I'm going into economics, I need a MBA if I want a decent job!" Or even better, "When I graduate, I want to do X Y Z with my degree, and I'm going to pursue it in anyway I can."

I think in many cases our academic planners fail to prepare our students for what the real world requires of our work force. Or they're just pushing them through as fast as they can to keep their schools afloat.

BPA

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #35 on: December 19, 2017, 09:17:07 AM »
If you don't think $450 for a phone that lasts 3 years is expensive I don't really know what else to say. I've had the same phone for 7 years - $50 new, which of course is an anecdotal outlier, but the assumption that buying an iphone is justified because everyone else is doing it?

I mean, I get what you're saying about human nature and the way people behave but that doesn't mean you should defend the mistakes that keep people in debt. In fact I think that's what MMM and the frugal community in general are all about. We know we are the outliers but we're confident that we have it right and that the majority (also known as normal people) has it wrong. I will continue to hold the opinion that buying a $450 phone before you are FI is a poor decision and I also acknowledge that many people will continue to do so.

Thanks Dabnasty, I was beginning to think I wasn't on the MMM forum!

Agreed.  In some ways the posts some people make on the Antimustachian Wall of Shame and Comedy have become the shame and comedy.

mm1970

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #36 on: December 19, 2017, 11:13:40 AM »
I'm always a bit puzzled , and maybe it's because I live in my little corner of the world, but...

... he got his degree in economics and a minor is business. What does he want to do with it? Do people not have goals or targets? I've always viewed a degree in economics a bit like a degree in psychology. It's nice to have, but ... there isn't a lot you can do right out of the gate? He didn't have a goal? Unless you land that prestigious internship or have a job lined up afterwords, a degree in economics doesn't really do squat for you. Jobs in certain fields require specific licenses or advanced degrees to work in that field. He didn't think "Hey, I'm going into economics, I need a MBA if I want a decent job!" Or even better, "When I graduate, I want to do X Y Z with my degree, and I'm going to pursue it in anyway I can."

I think in many cases our academic planners fail to prepare our students for what the real world requires of our work force. Or they're just pushing them through as fast as they can to keep their schools afloat.
This is a problem.

A lot of it is that kids choose their majors when they are teenagers.  17, 18?  A lot of them have no fucking clue what jobs there are, or what they could do with them.

I mean, I liked math and science, so I majored in engineering.  I liked chemistry, so I made it chemical engineering.  I didn't really know much about what a chem E did.  Good thing I liked it.  I detoured into the Navy and came out and went into manufacturing.

I think a lot of focus needs to be on getting a JOB.  If you are going to get into an entry level job, just do it.  Doesn't mean you'll be doing the same thing 20 years from now though.

Dabnasty

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #37 on: December 19, 2017, 01:16:24 PM »
You can't accuse someone of making a straw man argument based on your own definition of expensive.
Sure I can. If the OP makes a quintessential straw man argument why should I not call them on it? Arguing over what is or is not an expensive phone is just quibbling and avoiding the point.

I thought whether it was expensive or not was the whole point. Should we say, over budget instead?

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Clearly their definition of expensive is different than your own. Not sure if you are a millennial but I think this is part of the problem. If you don't think $450 for a phone that lasts 3 years is expensive I don't really know what else to say. I've had the same phone for 7 years - $50 new, which of course is an anecdotal outlier, but the assumption that buying an iphone is justified because everyone else is doing it?
What does generations have to do with this? Seriously, pause and ask yourself if a Millennial is any more likely to have an over priced cellphone than someone from Generation X or a Baby Boomer. Cellphones have embedded themselves into Western culture at this point and are largely part of the fabric of it. That's changed the nature of people's perception of them from a luxury for the elite (1980's), something that the upper middle class carried (1990's), to effectively a utility payment (2010's).

Generation has nothing to do with it. I didn't make an if then statement, I was just thinking out loud and I probably should have left that out. Although it is kinda what the article is about. It's not so much about overpriced cell phones as people who are financially unstable but buy them anyways.

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I mean, I get what you're saying about human nature and the way people behave but that doesn't mean you should defend the mistakes that keep people in debt. In fact I think that's what MMM and the frugal community in general are all about. We know we are the outliers but we're confident that we have it right and that the majority (also known as normal people) has it wrong. I will continue to hold the opinion that buying a $450 phone before you are FI is a poor decision and I also acknowledge that many people will continue to do so.
Sure and I get the point that you are making as well. The problem is that most of the people on these forums are already FI or used to aggressive optimizations. If you are trying to get someone started on the path to FI you don't rip them apart for having a cellphone (internalized as a utility payment and a sunk cost if they already own it) but other easier wins. Get them to cook in more often, less buying coffee on the go, shopping at consignment stores for clothing (or charity shops). My whole point of the cost of ownership of the phone is I can think of a lot of ways to free $149.67 to $183 a year in someones budget that are much easier and quite frankly have a higher ROI.

First, I agree that there are lower hanging fruit but someone in a bad financial situation should be looking for all the fruits. If I was giving someone direct advice I might be more concerned with how I presented it but...

Second, this is the Wall of Shame and Comedy. I don't suspect there are many people here looking for financial advice, at least not this kind.
« Last Edit: December 19, 2017, 01:18:12 PM by Dabnasty »

ManlyFather

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Re: Millennial makes $22/hr, has $30k in debt. Will payoff debt in 20 years
« Reply #38 on: December 19, 2017, 01:28:39 PM »
Sure and I get the point that you are making as well. The problem is that most of the people on these forums are already FI or used to aggressive optimizations. If you are trying to get someone started on the path to FI you don't rip them apart for having a cellphone (internalized as a utility payment and a sunk cost if they already own it) but other easier wins. Get them to cook in more often, less buying coffee on the go, shopping at consignment stores for clothing (or charity shops). My whole point of the cost of ownership of the phone is I can think of a lot of ways to free $149.67 to $183 a year in someones budget that are much easier and quite frankly have a higher ROI.

Don't kid yourself: buying a $450 phone with money you don't have is never a good idea.  Don't take this personally if it applies to you, just figure out what you want and do what is best for you.  If that means buying the phone, go right ahead, no one will stop you.  If you would rather be free from the need to work (to become FI), then buying a $450 phone is just going to set you back.

These points are not controversial.  If you feel cognitive dissonance, I would implore you to find out why you feel this way.