Author Topic: Meet the ‘semi-rich’: Millions of high-income Americans may not feel wealthy but  (Read 27766 times)

Paper Chaser

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https://www.cato.org/policy-analysis/exploring-wealth-inequality#wealth-inequality-has-increased-modestly


For what it is worth, that Cato link is sourcing mostly journalists or other think tanks (Cato, Heritage) and very little looks to be based on research reviewed by actual economists. And some of the journalists' data has since been corrected.

The Cato institute was also founded (and funded) by one of the Koch brothers. I'm suspicious when an organization that claims to have no ties to any political party or ideology is funded by a known conservative backing billionaire. When that same group basically says "Hey, inequality isn't that big of a deal guys" I take it with a pretty huge grain of salt.

Cato is a well established libertarian think tank. I’m surprised that anyone thinks it’s anything other than that. It produces studies that are Respected in many circles, it’s not a fringe lunatic place.

I'm not suggesting that they're a fringe lunatic place. I'm suggesting that we need to consider any potential biases the source of this information may have, the same way we do for basically all information now. They claim to have no ties to a specific political party, but their primary funder and literal founder is a staunch GOP backing billionaire. It's a group of very well connected, wealthy people that work there, funded by wealthier and better connected people. When they say, "Sure, income inequality is worse now than it has been in a long time, but that's not too big of a deal." I think it's fair to question why they might've drawn those conclusions and who benefits from them. How connected and in-tune are they to the lives of "normal" people vs wealthy politicians and their backers? And I say that as somebody with fairly Libertarian leanings.

TempusFugit

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https://www.cato.org/policy-analysis/exploring-wealth-inequality#wealth-inequality-has-increased-modestly


For what it is worth, that Cato link is sourcing mostly journalists or other think tanks (Cato, Heritage) and very little looks to be based on research reviewed by actual economists. And some of the journalists' data has since been corrected.

The Cato institute was also founded (and funded) by one of the Koch brothers. I'm suspicious when an organization that claims to have no ties to any political party or ideology is funded by a known conservative backing billionaire. When that same group basically says "Hey, inequality isn't that big of a deal guys" I take it with a pretty huge grain of salt.

Cato is a well established libertarian think tank. I’m surprised that anyone thinks it’s anything other than that. It produces studies that are Respected in many circles, it’s not a fringe lunatic place.

I'm not suggesting that they're a fringe lunatic place. I'm suggesting that we need to consider any potential biases the source of this information may have, the same way we do for basically all information now. They claim to have no ties to a specific political party, but their primary funder and literal founder is a staunch GOP backing billionaire. It's a group of very well connected, wealthy people that work there, funded by wealthier and better connected people. When they say, "Sure, income inequality is worse now than it has been in a long time, but that's not too big of a deal." I think it's fair to question why they might've drawn those conclusions and who benefits from them. How connected and in-tune are they to the lives of "normal" people vs wealthy politicians and their backers? And I say that as somebody with fairly Libertarian leanings.

Do you not have the same reservations when mainstream media or other predominantly left leaning organizations publish pieces that stoke the flames of class resentment?  Their business model is to keep people agitated and to designate bogeymen for all the woes of humankind.  Academia has long ago been corrupted by liberal groupthink, so surely you would look somewhat credulously at anything coming out of a university economics department, right? 

I don’t disagree that biases exist everywhere.  It bothers me when people only seem to think about that when they see something that goes against the dominant media narrative.  As though the media (and other organizations such as academia) don’t have plenty of their own biases and political agendas. 

It isn’t much of a story to explain that things are actually pretty darn good in our society and that maybe your problems have more to do with personal choices and just plain old bad luck than they do with some shady cabal of billionaires and the politicians in their pockets who are stealing your rightful share of the national wealth.  So vote for us and you can have all the stuff and we’ll make those nasty rich people pay for it!  (Just please don't check the math)

I’m sure many of us have seen this comparison before but it is instructive, I think.  It could also be applied in much more recent and relatable times, such as living standards of the 1960s compared to today, even if you were much wealthier back then. Point being that some things aren't measurable by just dollars. 

https://cafehayek.com/2016/02/40405.html

Paper Chaser

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I absolutely think it's fair to question the validity of most reports in the general media. They often lack depth, detail, and are written by non-experts and presented in a way that can be heavily biased either intentionally or through ineptitude.

However, I think there's a significant difference between assuming that a story in the general media is lacking info or presented with bias, and assuming an actual study from experts in a field based on lots of data is incorrect because we think that science or all of acedemia has been "corrupted by liberal groupthink". Just because we can't trust the media to present information without bias doesn't meant that we can't trust scientists, or doctors, or engineers, or other highly educated experts in their fields with data on their side. I don't go to politicians to tell me the truth, or to even use the information presented by the scientific community in a decent manner. I go to the people that spend their lives studying this stuff and back it up with data. They're not infallible, but they often have actual evidence to support their position.

In this case, my family history and lived experience align with what so many experts are saying. Same is true for many of my peers, so it's easy for me to believe there's some merit to what they're presenting. Things have changed, but not necessarily gotten better for tons of Americans in the last 50 years or so. Yeah, we have more stuff, but there's less value. We've been made more comfortable, but we have to work harder and make smarter choices to end up in similar places as our parents/grandparents. There seems to be a lot less margin for error these days. Massive debt has never been easier to acquire. Unexpected medical costs can be crippling for even the most conservative people. Again, a lot of this comes down to how you judge "Quality of Life" and what role "Social Mobility/The American Dream" plays into that judgement. It seems like you're suggesting that Quality of Life is mostly up, and I could even agree with that depending on the specifics of the argument. But at the same time I'd argue that the core of "The American Dream" and "Social Mobility" are both in decline. Obama was elected in 2008 by selling "Hope" for a better future. Trump was elected in 2016 with the slogan "Make America Great Again", indicating that it wasn't very good in 2016. Both parties have recognized that voters aren't happy and tried to capitalize on that and in doing so, they've both tacitly acknowledged that things aren't getting any easier for normal people.

I think if you asked most people "When was the American Dream in it's hey day?" they'd respond "the 1950-60s". That aligns with my family history that I already shared. It was a truly unique time in history. The US was the only economic super power on the planet, and all of Europe, Russia, and Japan were rebuilding after WW2 using American made goods. The country was flooded with money from across the globe, and the Middle Class grew out of that. Wages were high due to increased union representation. Taxes were high, particularly on higher earners. Corporations hadn't all adopted the Chicago School of Economics approach and often had a mindset geared more toward being productive parts of society than singularly focused on growing share holder returns. They offered pensions to support their workforce after honest careers. I can support this outlook if needed, but didn't want to bore you by posting charts and graphs as I think it's pretty well understood and accepted.

Without massive death from another world war, we probably can't do anything to make the US the only standing economic super power anymore. We can change tax code, and corporate outlook and demand higher wages. All of those options would cost those at the top money, and all would be welcome in my book. Most studies that I've seen indicate the buying power of the Average American peaked about 50 years ago in the early 1970s. In the intervening years, the wealthiest people in our society have seen massive investment gains thanks to changed corporate ideologies (have to acknowledge that as an investor I've seen benefits from this as well), while simultaneously seeing their tax burdens shrink. I don't know that they've necessarily rigged the game, but it sure seems like it's worked out suspiciously well in their favor over the last 50 years or so, even through some massive financial bubbles and economic struggles. I don't feel the same is true for most normal people. They might have more stuff, but it's all debt fueled and built on the backs of low earners here and abroad.
« Last Edit: November 30, 2021, 05:51:20 AM by Paper Chaser »

TempusFugit

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"...doesn't meant that we can't trust scientists, or doctors, or engineers, or other highly educated experts in their fields with data on their side."

I disagree, most heartily.  All of the above are also human beings, who can have not just psychological biases, but also institutional, professional, financial, and status incentives that can affect what they study and what they try to publish. It's also true that studies sometimes never see the light of day because the committees and institutions that decide what gets published don't want to 'confuse people' with things that they themselves don't agree with.  Data can be interpreted different ways, or it can be selected or excluded to show what you want it to show. Sometimes that's intentional, sometimes it simply reflects confirmation bias. 

Surely our past couple of years has provided plenty of evidence - for those who care to see - that the "experts" are just as swayed by politics and status (gotta keep getting those morning show invites!) as your average congressman. 


"When was the American Dream in it's hey day?" they'd respond "the 1950-60s"

What group of people actually believes that? First off, you've gotta be pretty old to even remember those days as a working person, and if you're already in your late 60's, you are in one of the wealthiest cohorts in the history of our country.   People believe things like this because they don't really know any better. It's like believing that "back then, everyone had the safety of a lifetime pension." That's not true. Very few people had those pensions, and the ones who did had to stay with the same employer for decades to actually collect (and then they died at 65 because they didn't have access to all of our expensive health care). 


"Taxes were high, particularly on higher earners."
The tax rates were higher, yes, but one could argue (with facts!) that the actual tax revenues and the percentages that people actually paid were about the same because people changed their behaviors and found avoidance strategies. It used to be pretty common for wealthy people to incorporate, for example, as a way of avoiding some of these ridiculous tax rates.  It was the lazy millionaire who paid that 90% tax rate.

Tax revenues in the US have remained pretty steady at around 17% of GDP for decades.  What has changed?  Our government spending has increased over those decades to more that 22% of GDP (not even counting the sailor-on-shore-leave spending spree of the past 2 years).  The economy has grown tremendously but the appetite for government spending has grown even faster. 

"...both tacitly acknowledged that things aren't getting any easier for normal people"
 But that's the problem!  They haveto agree with it because that's what the people insist on hearing!  No one wants to be told that their problems are because of their own choices and behaviors.  Having politicians tell you what you want to hear doesn't make it true! In fact, it's probably evidence to the contrary.  Everyone wants to hear that it's not their fault, that they never really had a fair shake and that's why they didn't hit it out of the park.

Of course, in the context of this thread, I am speaking in generalities across the larger population. Obviously there are people who have had poor circumstances, bad breaks, faced unfair barriers, etc.  But that has always been true and I believe it's better now even for those people than it has ever been.  Compare the poverty rates today with what they used to be. Then take a look at how we keep redefining poverty and factor that in as well when comparing to how it used to be. 

If you really want to be impressed, look at global poverty rates over the past 3 decades.  It has dropped from over 36% in 1990 to ~9% today. Why has it dropped so dramatically?   Capitalism!  The widespread adoption of free market capitalism has lifted billions of people out of poverty in a dramatically short time.

StarBright

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"...doesn't meant that we can't trust scientists, or doctors, or engineers, or other highly educated experts in their fields with data on their side."

I disagree, most heartily.  All of the above are also human beings, who can have not just psychological biases, but also institutional, professional, financial, and status incentives that can affect what they study and what they try to publish. It's also true that studies sometimes never see the light of day because the committees and institutions that decide what gets published don't want to 'confuse people' with things that they themselves don't agree with.  Data can be interpreted different ways, or it can be selected or excluded to show what you want it to show. Sometimes that's intentional, sometimes it simply reflects confirmation bias. 


There is absolutely individual bias, but that is also part of what blind external/peer review is for. Does it catch everything? Probably not.

But there is also a reason that is the current standard for good research: because something that goes through a blind (meaning no one knows who authored it) double check by multiple other experts from other institutions is much more likely to be sound than something that no one double checks (or that only people from within your own institution double check).

Additionally, people often put their research through extensive informal review before they ever submit to a journal, because no real researcher wants to put crappy research out there, it is bad for their careers and for the world.

Paper Chaser

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I think a lot of that sounds like "whataboutism" or red herrings to me.
Tax rates aren't fair - "But what about government spending!"
Medical costs are insane - "But what about quality of care!"
Wages haven't kept up - "But look at the stuff that can be financed!"
American middle class is fading away, leading to a society of haves/have-nots - "But poverty has never been lower!"
BOTH parties acknowledge that things aren't great - "It's just people wanting handouts from the Libs!"

All the stuff in the quotes can be true, and the situation can still be bleak. Drug overdose deaths per capita prior to 2000 were never above 4/100k Americans, but they've been in double digits since 2005, and have been over 20/100k Americans for a few years now (More than 5 fold increase in 20 years!). Violent crime in the US bottomed out in 2014, and has been increasing since then (my city has set back to back murder records in '20 and '21 and still climbing). When comparing violent crime deaths per capita to other nations, the US is pretty much the worst 1st world, developed nation on the planet (depending on how you classify Russia). The CDC says that American suicide rates have climbed 33% since 1999. These are not trends of a healthy, happy, successful society. I don't think the "life is getting harder" argument is just coming from spoiled people complaining with no merit, or whining hoping to be placated by whatever politician happens to offer them hope. I think there's actually something going on here. As Louis CK said, "Everything is amazing, and nobody is happy".

Ultimately, I don't see much of a downside to approaching life with the belief that times are tougher now than they were 50 years ago, and that trend is likely to continue moving forward. Historically speaking, the American Middle Class is an anomaly brought about by an incredibly unique situation. But water always finds it's level. If I'm right, then I'll be decently prepared to give my kid a shot at opportunities they'd otherwise not have. If I'm wrong, and things end up amazing for future generations and their ability to advance in American society, then we all end up even wealthier in the end and life is great. I think of it as "plan for the worst and hope for the best" basically.

TempusFugit

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"...doesn't meant that we can't trust scientists, or doctors, or engineers, or other highly educated experts in their fields with data on their side."

I disagree, most heartily.  All of the above are also human beings, who can have not just psychological biases, but also institutional, professional, financial, and status incentives that can affect what they study and what they try to publish. It's also true that studies sometimes never see the light of day because the committees and institutions that decide what gets published don't want to 'confuse people' with things that they themselves don't agree with.  Data can be interpreted different ways, or it can be selected or excluded to show what you want it to show. Sometimes that's intentional, sometimes it simply reflects confirmation bias. 


There is absolutely individual bias, but that is also part of what blind external/peer review is for. Does it catch everything? Probably not.

But there is also a reason that is the current standard for good research: because something that goes through a blind (meaning no one knows who authored it) double check by multiple other experts from other institutions is much more likely to be sound than something that no one double checks (or that only people from within your own institution double check).

Additionally, people often put their research through extensive informal review before they ever submit to a journal, because no real researcher wants to put crappy research out there, it is bad for their careers and for the world.

I don't disagree on principle, but I bet if you are a climate scientist looking for funding, you aren't going to put forth any proposals that go contrary to the conventional wisdom, are you?  Researchers are just like everyone else who needs a paycheck to cover the mortgage and the kid's tuition.  They are also just like everyone else in that they don't want to be ridiculed or blackballed because they are going against groupthink.




TempusFugit

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I don't think I'm engaging in whataboutism. 

As Louis CK said, "Everything is amazing, and nobody is happy".    - This is my point!  I absolutely believe that things ARE better than they used to be and I also believe that we are LESS HAPPY. 

This is what is driving people to blame 'income inequality' and 'the billionaires' and 'globalism', when in fact, in my opinion, the real issue is that we are entirely too engaged in other people's lives - people we don't really have relationships with other than their social media feeds which always show them having such a great time with their lovely families on exotic vacations.

We (in the general sense) are unhappy and we're looking for scapegoats because if we can find someone to blame and we can elect the politician who can punish those people and give us the things that we deserve and we will finally be happy and content. 

If instead of that we come to realize that we are financially stressed because we bought the largest house for which we could get a mortgage and we got the 7 year car loan so we could buy that SUV (we have to have that to load up all the kids stuff for their regional sports league travels, you know), and we decided it would be a good idea to take out the student loan for our degree in English Literature and darn it, why could our parents raise a family on a middle class income but we're struggling!?   


"I don't see much of a downside to approaching life with the belief that times are tougher now than they were 50 years ago, and that trend is likely to continue moving forward"

That's sad, in my opinion.  You don't think there's a downside to pessimism and defeatism? To stoking resentment rather than encouraging people to aspire to better things by showing that we've made great progress already? You don't think it's emotionally (and probably financially and physically) healthier to be grateful that you were born in to the best place and time in the history of the human race?  There are and probably always will be terrible things going on in the world both near and far. But things are better now than they were. If you think violent crime is bad now, you really don't remember the 70's. Or the 90's.  Do you have any idea how much more dangerous it was to be a police officer in America on the 1970's than it is today?   

Or how would you like to be in the market for a mortgage at 18% interest?  Or sitting in a gas line (on the day of the week you are allowed to even go)?  And the life expectancy in the US was a full decade lower, so I guess maybe your struggles would be over sooner. 

And clearly if you are a racial minority or a non-heterosexual, or a woman, things are better socially than they have ever been as far as the options you have to make your own choices. 

maizefolk

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There is absolutely individual bias, but that is also part of what blind external/peer review is for. Does it catch everything? Probably not.

But there is also a reason that is the current standard for good research: because something that goes through a blind (meaning no one knows who authored it) double check by multiple other experts from other institutions is much more likely to be sound than something that no one double checks (or that only people from within your own institution double check).

Additionally, people often put their research through extensive informal review before they ever submit to a journal, because no real researcher wants to put crappy research out there, it is bad for their careers and for the world.

I recognize it is not the main point you are making, but at least in the fields I work in or collaborate with double blind peer review (where the reviewers don't know who the authors are) is very uncommon although not entirely unheard of. Single blind review, where authors don't know who the reviewers are but the reviewers know who the authors are, is typical. Signed reviews are becoming more common though. Either as a personal choice or changes in journal policy. At that point everyone knows who everyone is, so I guess it is zero blind peer review?

More central to your main point. I agree that there is a lot of career risk in publishing something that is horribly flawed so people try to get outside experts. On the other side of the ledger, with lots of people competing for a small number of grants and a small number of permanent positions there is also a substantial incentive to interpret results in the most impactful way possible.

My favorite go-to example is the story of GFAJ-1. A bacterial strain isolated from mono lake by a scientist -- Felisa -- four years into her postdoctoral work. She thought the strain was able to use arsenic to replace phosphorus in its DNA. NASA announced it at a press conference with so much fanfare people thought they were going to announce the discovery of alien life. The story made it through peer review and was accepted in Science. People in the field were immediately skeptical, and the conclusions of the peer reviewed paper were rapidly refuted by half a dozen groups. That name, GFAJ-1? It stood for Get Felisa A Job. And if the story had held up for even a year, it would have almost certainly gotten her one. The buzz and excitement was enough for a Ted Talk and a visiting professorship but didn't last long enough for a tenure track position and she ended up working for a local bakery.

You can take two different lessons from the story of GFAJ-1, one discouraging and one encouraging. The discouraging lesson is that trained scientists can and do talk themselves into believing things which are not true. And sometimes, but not always, they get those not true beliefs through the formal peer review process, even at high visibility, high prestige journals like Science (here's another example from PNAS). The encouraging lesson is that, even though incorrect findings can often make it through pre-publication peer review, when the finding is about something that really matters and something that gets broad attention, there is a much larger and more effective post-publication peer review process that prevents those ideas from becoming part of the scientific consensus.

TL;DR It makes sense to look at the overall scientific consensus in the field as this reflects both formal pre publication peer review and informal post publication peer review.
« Last Edit: December 01, 2021, 07:10:06 PM by maizefolk »

Paper Chaser

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You don't think there's a downside to pessimism and defeatism? To stoking resentment rather than encouraging people to aspire to better things by showing that we've made great progress already? You don't think it's emotionally (and probably financially and physically) healthier to be grateful that you were born in to the best place and time in the history of the human race? 

From a planning perspective, no I don't think there's a downside to being pessimistic. I do think there's a difference between going through life with a victim complex and making sure that you have plans that account for negative scenarios and outcomes. I'm advocating more for the latter here than the former. I fully recognize and appreciate the many ways that I'm blessed.  That doesn't mean that I'm going to base my plans on simple optimism that things will work out, or hope that somebody else will save my bacon or improve my kid's life. It's my personal responsibility to do what I can to cover my bases. I'm going to consider what the worst case might be, do my best to determine the odds of that worst case scenario actually coming to fruition, and try to control what I can control to mitigate any perceived risks. If it works out better than planned, then everybody gets a high five and we go out for ice cream.

I accept it as fact that some people have advantages that others do not. It may be skin color, or gender, or the family you're born into. Some of those things can be improved and others unfortunately cannot. All I'm saying is that the time you're born into can also be an advantage or disadvantage. If lots of people had it better during a certain time period in our society, then lets look at what worked and try to emulate it. I don't want everything about the world to be just like it was in the 1960s. But that doesn't mean that we can't learn from some of the policies and ideals that seemed to be successful back then, and apply those concepts to try and improve lives in modern times.
- Increasing taxes paid by the wealthiest people in our society isn't automatically going to take away the rights and opportunities of homosexuals or non-whites or other disadvantaged groups and return them to the 1960s. If anything, it probably helps empower them further if increased tax revenue (coupled with changes to government spending priorities) can go towards appropriate causes.
- Corporations focusing so heavily on quarterly performance often comes at the detriment of long term investments that might benefit employees and shareholders alike (Many leading CEOs already seem to recognize this:  https://www.businessroundtable.org/business-roundtable-supports-move-away-from-short-term-guidance). There's no critical reason other than greed that we can't return to similar ideologies.
- Changing the way that we regulate medical care/prescription drugs isn't going to shorten people' s expected lifespan by a decade. A huge part of the increase we've seen comes simply from having fewer smokers. We can change this, but it's going to eat into corporate profits and investor returns.

All of these things are nice, society wide goals that in my opinion are worthy of pursuing and could improve a whole lot of lives with minimal disruption to those at the top. But on a personal level, I have little to no control over them. All I can do is operate in the framework that's already in place. So I plan for the worst, based on trends that I see over time. It's a strategy that has worked out thus far.


StarBright

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There is absolutely individual bias, but that is also part of what blind external/peer review is for. Does it catch everything? Probably not.

But there is also a reason that is the current standard for good research: because something that goes through a blind (meaning no one knows who authored it) double check by multiple other experts from other institutions is much more likely to be sound than something that no one double checks (or that only people from within your own institution double check).

Additionally, people often put their research through extensive informal review before they ever submit to a journal, because no real researcher wants to put crappy research out there, it is bad for their careers and for the world.

I recognize it is not the main point you are making, but at least in the fields I work in or collaborate with double blind peer review (where the reviewers don't know who the authors are) is very uncommon although not entirely unheard of. Single blind review, where authors don't know who the reviewers are but the reviewers know who the authors are, is typical. Signed reviews are becoming more common though. Either as a personal choice or changes in journal policy. At that point everyone knows who everyone is, so I guess it is zero blind peer review?


thanks for sharing that!  I remembered reading several years ago that Nature and others (Environmental Science?) and MLA adjacent publications were offering double blind. And I figured it was becoming more standard.

I used to be a musician and we basically standardized the blind audition for gender parity reasons ages ago. I guess I was taking it as the standard when it isn't yet.

Will likely delete the bit about my husband so please don't quote. Thx


TL;DR It makes sense to look at the overall scientific consensus in the field as this reflects both formal pre publication peer review and informal post publication peer review.
 
I think scientific consensus is an important point in both catching errors and getting funding, especially in an example like climate change.

When the overwhelming consensus (like 98-100%) is "A", it is going to be hard to get funding to say "Nope, give me money to tell you why it is B." Especially if the consensus is so established that is has moved on from establishing to the coming up with utility or solutions phase.

I would like to hope that if there is persuasive data to warrant further study it would still get funded,  but I don't know, it is not my field. As an outsider it sort of feels like people wanting money to establish that the earth is flat (though I am sure there is way more nuance than that).
« Last Edit: December 03, 2021, 10:43:05 AM by StarBright »

Morning Glory

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I did peer review for a small nursing journal for several years and it was always double-blind. 

DadJokes

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Ultimately, I don't see much of a downside to approaching life with the belief that times are tougher now than they were 50 years ago, and that trend is likely to continue moving forward.

You don't see a downside to having a pessimistic view toward life?

I see this belief frequently on the internet. People have some "woe is me" attitude about life because people "just can't get ahead anymore." They expect Washington to fix their problems instead of trying to fix their own problems.

It may or may not be easier to improve your station in life relative to the rest of society than it was 50 years ago, but it's still possible, and having a pessimistic view about your chances doesn't make it easier. Also, and I know this has been harped on in this thread multiple times, people in poverty in America are still better off today than the middle class was 50 years ago.

No one wants to be told that their problems are because of their own choices and behaviors.

This is very true for a large number of people, even if some people have more hurdles to overcome than others. At the end of the day, the only thing we have control of is our own actions. It's why the Circle of Control blog post from MMM is one of my all-time favorites (https://www.mrmoneymustache.com/2013/10/07/how-big-is-your-circle-of-control/).

Paper Chaser

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Ultimately, I don't see much of a downside to approaching life with the belief that times are tougher now than they were 50 years ago, and that trend is likely to continue moving forward.

You don't see a downside to having a pessimistic view toward life?

I see this belief frequently on the internet. People have some "woe is me" attitude about life because people "just can't get ahead anymore." They expect Washington to fix their problems instead of trying to fix their own problems.

It may or may not be easier to improve your station in life relative to the rest of society than it was 50 years ago, but it's still possible, and having a pessimistic view about your chances doesn't make it easier. Also, and I know this has been harped on in this thread multiple times, people in poverty in America are still better off today than the middle class was 50 years ago.

No one wants to be told that their problems are because of their own choices and behaviors.

This is very true for a large number of people, even if some people have more hurdles to overcome than others. At the end of the day, the only thing we have control of is our own actions. It's why the Circle of Control blog post from MMM is one of my all-time favorites (https://www.mrmoneymustache.com/2013/10/07/how-big-is-your-circle-of-control/).

Hopefully my follow up post (after the one you quoted) will clarify that I'm not necessarily a pessimist in all things, but I do think taking a pessimistic viewpoint when planning, especially with big, long term things has advantages. It's better to plan for the worst and be proven wrong than plan for the best and be proven wrong.

I also mentioned in my follow up that while large scale societal things can seem daunting, I recognize that all I can do is control my own circle so that is my primary focus.

dcheesi

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"...doesn't meant that we can't trust scientists, or doctors, or engineers, or other highly educated experts in their fields with data on their side."

I disagree, most heartily.  All of the above are also human beings, who can have not just psychological biases, but also institutional, professional, financial, and status incentives that can affect what they study and what they try to publish. It's also true that studies sometimes never see the light of day because the committees and institutions that decide what gets published don't want to 'confuse people' with things that they themselves don't agree with.  Data can be interpreted different ways, or it can be selected or excluded to show what you want it to show. Sometimes that's intentional, sometimes it simply reflects confirmation bias. 


There is absolutely individual bias, but that is also part of what blind external/peer review is for. Does it catch everything? Probably not.

But there is also a reason that is the current standard for good research: because something that goes through a blind (meaning no one knows who authored it) double check by multiple other experts from other institutions is much more likely to be sound than something that no one double checks (or that only people from within your own institution double check).

Additionally, people often put their research through extensive informal review before they ever submit to a journal, because no real researcher wants to put crappy research out there, it is bad for their careers and for the world.

I don't disagree on principle, but I bet if you are a climate scientist looking for funding, you aren't going to put forth any proposals that go contrary to the conventional wisdom, are you?  Researchers are just like everyone else who needs a paycheck to cover the mortgage and the kid's tuition.  They are also just like everyone else in that they don't want to be ridiculed or blackballed because they are going against groupthink.
I imagine there are any number of generous industry funded grants available for anyone willing to exonerate fossil fuels, plastics, etc. from climate change and/or environmental problems generally.

The fact that the current climate consensus has emerged in spite of the very deep pockets of Big [Oil|Gas|Plastics|etc.] is a clear indicator to me that the evidence must be incontrovertible at this point.

TempusFugit

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Being pessimistic does matter when it means you are propagating something that is untrue and that can have actual consequences when politicians feel forced to take measures to address a non-existent problem which then does actual harm to real people in the form of reduced economic growth.

maizefolk

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I imagine there are any number of generous industry funded grants available for anyone willing to exonerate fossil fuels, plastics, etc. from climate change and/or environmental problems generally.

The fact that the current climate consensus has emerged in spite of the very deep pockets of Big [Oil|Gas|Plastics|etc.] is a clear indicator to me that the evidence must be incontrovertible at this point.

I don't know what the industry funding landscape is for climate denial. It wouldn't surprise me if it were much less positive than you would think. But even if there were generous grants available: the whole reason PIs (professors and similar) want grants is to be able to do research to publish papers to achieve academic "success"*. That has two effects: one, it means an industry grant in an area which is unlikely to lead to a successful publication that can make it through peer review is much less attractive and two, even when/if one finds someone willing to take the grant, just having them say things without getting them published (again peer review rears its head) isn't going to have much impact on the scientific consensus.

*Being invited to speak around the world? A double dozen former grad students in faculty positions who attribute their success to you? Election to the national academy? An endowed parking space?

WGH

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I think we can all agree that the poor are not worse off now than 100 years ago. So the cause of income inequality is that the rich have gotten richer, not that the poor have gotten poorer. The bottom has moved up some but the top has moved up much more. So what?

Did Bill Gates steal money from my pocket to become wealthy? No, I voluntarily game him money for a product his company created that provided a benefit to me. He helped create a new industry and a company that provided benefits to a significant chunk of the world. Same with Jeff Bezos, Elon Musk, or most other billionaires. Their wealth is almost all unrealized gains from equity in a large company. The reason those companies are so valuable is they provide valuable goods and services to a large group of people. The more people you serve, the more you're rewarded. You could be the best doctor in the world but you can only treat a few hundred patients. If you invent a medication that can treat millions of patients you are going to reap much larger rewards.

There are some rent seekers who are simply taking part of the pie, but most of the very wealthy are growing that pie larger. It's not a zero sum game.

The rich have gotten richer primarily as you have noted from equity in large companies. Those companies offshored the blue collar jobs for pittance wages in foreign countries and left a hollowing out of the middle class. What we are predominantly left with is white collar and service level jobs. So Bill Gates and the rest didn't steal your money they took away your means of earning money by closing down the majority of the manufacturing base in the US. As a result the stock market has seen huge gains over the last several decades while middle class incomes have not kept up. Considering the top 1% owns 50% of all equities and the top 10% owns about 90% you can see that it isn't growing the pie it's shrinking it.

TempusFugit

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I think we can all agree that the poor are not worse off now than 100 years ago. So the cause of income inequality is that the rich have gotten richer, not that the poor have gotten poorer. The bottom has moved up some but the top has moved up much more. So what?

Did Bill Gates steal money from my pocket to become wealthy? No, I voluntarily game him money for a product his company created that provided a benefit to me. He helped create a new industry and a company that provided benefits to a significant chunk of the world. Same with Jeff Bezos, Elon Musk, or most other billionaires. Their wealth is almost all unrealized gains from equity in a large company. The reason those companies are so valuable is they provide valuable goods and services to a large group of people. The more people you serve, the more you're rewarded. You could be the best doctor in the world but you can only treat a few hundred patients. If you invent a medication that can treat millions of patients you are going to reap much larger rewards.

There are some rent seekers who are simply taking part of the pie, but most of the very wealthy are growing that pie larger. It's not a zero sum game.

The rich have gotten richer primarily as you have noted from equity in large companies. Those companies offshored the blue collar jobs for pittance wages in foreign countries and left a hollowing out of the middle class. What we are predominantly left with is white collar and service level jobs. So Bill Gates and the rest didn't steal your money they took away your means of earning money by closing down the majority of the manufacturing base in the US. As a result the stock market has seen huge gains over the last several decades while middle class incomes have not kept up. Considering the top 1% owns 50% of all equities and the top 10% owns about 90% you can see that it isn't growing the pie it's shrinking it.

China didn't take those jobs, robots did.  We manufacture more today in this country than ever before, but we do it with a fraction of the people because of automation.  How do you propose we could have prevented the rise of automation?  It's an obvious advantage for any business seeking a profit to replace people with machines that don't call in sick, don't get hurt on the job, don't sue you, and that work 24/7 without complaint.  And oh by the way they work faster and with far fewer errors.  As consumers, we all benefit immensely from these productivity gains. Most of us live lives of luxury and leisure compared to what people had to endure just a few decades ago.

Your problem isn't with rich people, it's with technology.  The rise of technology first displaced the agricultural workers and then the factory workers.  Technology has also dramatically reduced the labor required to do many erstwhile "knowledge worker" tasks, it's just that we keep generating more and more work for knowledge workers to do once the technology offloads other work.  The same can't be said for farming and manufacturing jobs.

maizefolk

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Your problem isn't with rich people, it's with technology.  The rise of technology first displaced the agricultural workers and then the factory workers.  Technology has also dramatically reduced the labor required to do many erstwhile "knowledge worker" tasks, it's just that we keep generating more and more work for knowledge workers to do once the technology offloads other work.  The same can't be said for farming and manufacturing jobs.

And almost everyone who survives to adulthood can be useful on a subsistence farm. That number drops when we instead imagine needing to contribute enough to earn your living in a factory or office. It drops more when we instead imagine needing to earn your living only an office.

... and so on.

TempusFugit

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Your problem isn't with rich people, it's with technology.  The rise of technology first displaced the agricultural workers and then the factory workers.  Technology has also dramatically reduced the labor required to do many erstwhile "knowledge worker" tasks, it's just that we keep generating more and more work for knowledge workers to do once the technology offloads other work.  The same can't be said for farming and manufacturing jobs.

And almost everyone who survives to adulthood can be useful on a subsistence farm. That number drops when we instead imagine needing to contribute enough to earn your living in a factory or office. It drops more when we instead imagine needing to earn your living only an office.

... and so on.

Very true.  It’s just the trade off we have made.  Even so, I think that almost all of us would take the lifestyle of the median US worker today over that of his counterpart in 1970.  Most of us would probably even make that trade if we had to drop a quintile in income.  The vast wealth that we have generated by virtue of these productivity gains permeates society at almost every level, in the form of cheap consumer goods, bountiful entertainment options, plentiful food, safer cars, affordable jet travel and yes, even good medical care.

Some of the things that we look at as examples of how hard it can be to support a family these days, for example the rising cost of housing, are in large part due to government regulation, not evil capitalists.
 

roomtempmayo

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Even so, I think that almost all of us would take the lifestyle of the median US worker today over that of his counterpart in 1970.  Most of us would probably even make that trade if we had to drop a quintile in income. 

If we all had to make that decision behind some sort of Rawlsian veil of ignorance, then I suppose most of us would go for 2022 over 1970.  Maybe.  Real wages would be similar, life expectancy would be more or less equivalent (although increasingly stratified now), but life would be easier and more convenient. 

However, if we're allowed to shape our judgement based on who we actually are, then I'm not sure we're all going to conclude that 2022 is better than 1970.

A few months ago, I posted a thread in the main forum about professions in decline, i.e. professions that have gotten worse in recent history.  We brainstormed a pretty long list.

It's perhaps true that the median worker has a slightly better life in 2022 than 1970, I suspect there are lots of folks for whom that is not really true at all.


maizefolk

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I think the two of you may not actually be in disagreement.

I agree with TempusFugit that most of us would choose living in 2022 over 1970s.

I agree with caleb that there are a significant number of people in the country today would make the rational choice that they'd be better off in terms of their job prospects/lifestyle/happiness in 1970.

Sandi_k

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I agree with caleb that there are a significant number of people in the country today would make the rational choice that they'd be better off in terms of their job prospects/lifestyle/happiness in 1970.

Unless they're black, brown, or female.

roomtempmayo

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So, @Sandi_k , that's an interesting question, and a discussion I've had with my wife, who is also not white.  She's a lawyer, and she says she'd be happy to work in the conditions of 2000 indefinitely, but not 1990 or 1980 when law was a good old boys club.  It's not a linear progression in her mind, but a before/after legal workplaces became reasonably hospitable to women.

But I'm not going to assume she's representative of all women.  There are certainly plenty of women who support political candidates that promise a return to a pre-1970 world.  Some of those women are people of color.  So I guess there's a not insignificant number of women, and even women of color, who would rather live in a 1960s or 1950s world.  Certainly not all or likely most, but a significant number.

People define the good life in a variety of ways, and not all of them use various forms of equality as a measuring stick.

maizefolk

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I agree with caleb that there are a significant number of people in the country today would make the rational choice that they'd be better off in terms of their job prospects/lifestyle/happiness in 1970.

Unless they're black, brown, or female.

Probably mostly yes. I'd add "or college educated" to your list.

After excluding all of those categories one is left with ~65M people in the USA. Let's say 1/3 of them rational feel they would have been living in the 1970s. That's definitely not most. But it seems hard to argue 20M people is not "a significant number".

roomtempmayo

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After excluding all of those categories one is left with ~65M people in the USA. Let's say 1/3 of them rational feel they would have been living in the 1970s. That's definitely not most. But it seems hard to argue 20M people is not "a significant number".

I would put the number higher.  We just went through an electoral cycle where 74M people (46.9%) voted for a candidate who promised a return to a lost golden age. 

That appeal to a golden age is to some extent a floating signifier (it can mean whatever people want it to mean), but it is anchored to a chronological past.

I think it's easy for those of us who are comfortable in the present to underestimate the depth of the nostalgia that's out there.

maizefolk

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I'm not particularly attached to 20M, very much back of the envelope math so if we're both at "tens of millions" I consider that agreement. But even beyond that I think we're talking about subtly different things.

Rationally concluding one would be happier/better off in the 1970s than today and concluding one would be happier/better off in the 1970s (rationally or irrationally).

The second group is almost certainly larger than the first given the natural human impulse to idealize the world of our childhoods and for our parents to paint a misleadingly rosy picture of "the good old days".

YttriumNitrate

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Probably mostly yes. I'd add "or college educated" to your list.
Interestingly, I would add "or not college educated" to the list since I'm not particularly fond of getting drafted into the army of 1970 and sent halfway across the globe to die in some jungle.

maizefolk

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Probably mostly yes. I'd add "or college educated" to your list.
Interestingly, I would add "or not college educated" to the list since I'm not particularly fond of getting drafted into the army of 1970 and sent halfway across the globe to die in some jungle.

That's a good point. I didn't live through the  1970s and my view of it is probably overly shaped by media set in the second half of the 1970s rather than the first half, while I associate the draft with the 1960s.

It looks like the draft ended towards the tail end of 1972?

SwordGuy

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I think it's easy for those of us who are comfortable in the present to underestimate the depth of the nostalgia that's out there.

Yep.  Used to be a white person in this country could walk down the street and, if they had something troubling them or were just in the mood to be hateful, they could just take their ire out on whatever minority they happened to wander alongside.   And if no minorities were around, a white man could take out his irritation on his womenfolk.

A lot of folks miss those days, God damn their bitter and shriveled souls.

mm1970

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I agree with caleb that there are a significant number of people in the country today would make the rational choice that they'd be better off in terms of their job prospects/lifestyle/happiness in 1970.

Unless they're black, brown, or female.

I came here to say just that (not sure how I missed this whole thread originally).

Quote
In this case, my family history and lived experience align with what so many experts are saying. Same is true for many of my peers, so it's easy for me to believe there's some merit to what they're presenting. Things have changed, but not necessarily gotten better for tons of Americans in the last 50 years or so. Yeah, we have more stuff, but there's less value. We've been made more comfortable, but we have to work harder and make smarter choices to end up in similar places as our parents/grandparents. There seems to be a lot less margin for error these days. Massive debt has never been easier to acquire. Unexpected medical costs can be crippling for even the most conservative people. Again, a lot of this comes down to how you judge "Quality of Life" and what role "Social Mobility/The American Dream" plays into that judgement. It seems like you're suggesting that Quality of Life is mostly up, and I could even agree with that depending on the specifics of the argument. But at the same time I'd argue that the core of "The American Dream" and "Social Mobility" are both in decline. Obama was elected in 2008 by selling "Hope" for a better future. Trump was elected in 2016 with the slogan "Make America Great Again", indicating that it wasn't very good in 2016. Both parties have recognized that voters aren't happy and tried to capitalize on that and in doing so, they've both tacitly acknowledged that things aren't getting any easier for normal people.

The family history where grandparents in the 50s and 60s were able to support a family on a single income (and a large family at that) had a VERY different set of rules. 

Firstly, women were outright barred from working in certain industries, or fired when pregnant. 
Secondly, nearly every family of color had 2 working adults because black men weren't paid like white men, and they weren't allowed in the same jobs.  Worse for black (or brown) women. 
Women couldn't even have a credit card until what, 1970?

So, yes, I agree that times have gotten worse for the middle class, for many reasons - but some of that is the rosy view of  how great it used to be (on the backs of others).  One other is that rent/ housing costs so much more now than before.

Also on the offshoring and robots... it's both.  It's not JUST robots.  Sure, in my industry (semiconductors), robots do a lot of things now that people used to do.  HOWEVER, people still do a lot of things. We moved the whole backend packaging off to Asia long ago (before my time), because small women with small hands and fingers can do stuff cheaper in Malaysia than here.  Also, it's cheaper to install newer equipment in Malaysia and China and other places where maybe environmental rules aren't so onerous.

Sandi_k

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The family history where grandparents in the 50s and 60s were able to support a family on a single income (and a large family at that) had a VERY different set of rules. 

Firstly, women were outright barred from working in certain industries, or fired when pregnant. 
Secondly, nearly every family of color had 2 working adults because black men weren't paid like white men, and they weren't allowed in the same jobs.  Worse for black (or brown) women. 
Women couldn't even have a credit card until what, 1970?

1974 - the Equal Credit Opportunity Act.

https://www.nerdwallet.com/article/credit-cards/women-credit-decades-70s#:~:text=A%201963%20federal%20law%20prohibited,cards%20separate%20from%20their%20husbands.

This was a Big Deal in my family, as my parents separated in 1970, and didn't finalize the divorce until 1974. 

My dad had moved out of the house in 1970, and my 33 year old mother had to ask *her father* to come to the water company with her - to co-sign the water account, since they wouldn't extend "credit" to her sufficient to have a water bill in her own name.

Seriously - in California! - she needed a man's name on the account to get *water* for herself and three kids.

There's a reason I refuse to have completely joined financial accounts. I love my DH, and trust him - but I will not inadvertently sacrifice my credit worthiness to a marital structure.

ATtiny85

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Interesting thread, with a lot of great posts in the first couple pages, before it went in a different direction. I am always amazed at the depth some of you have / will go in topics. Digging into data and breaking it down. Great stuff, thanks.

Adding a post to the original topic, I definitely still feel like we are barely making it, which is absolutely ridiculous, since we put more per year into VTSAX than most people make. But as was mentioned, I think there is some benefit of have some pessimism in my small circle of influence, keeping me motivated and on track. I think this has provided me with the ability to have a great optimistic attitude towards the current stock market dip.


clarkfan1979

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There's absolutely something to this.

When I worked in Silicon Valley, we were making stupid crazy money.  More than I had previously thought possible.  It was mostly due to my wife's work, but I contributed a decent sum too.

Yet our house was a poorly maintained fire hazard with illegal plumbing and illegal wiring.  We rented because we "couldn't afford to buy".  Technically, we could have gotten a mortgage, but prices were so ludicrous that we didn't really consider it an option.  I lived in a nicer place when I was in Tennessee making $45K/year.

So we were technically in the 1% category by a hair.  But our living situation was comparable to college students.  We didn't feel rich at all.  To quote a friend "It doesn't matter how much money you make in Silicon Valley, you'll never be rich". 

The day I finally felt rich?  When we were making about half as much money living in a different state, but we had nice house with a fully paid off mortgage.

This is because money is a secondary reinforcer, not a primary reinforcer. A primary reinforcer is based on survival like food, water & sleep. A secondary reinforcer (money) is based on what it can buy you.

For 2021, we made around 90K and our net worth was around 1.3 million. We are considered middle class (based on income) by all 3 definitions in the article and we also fall into the 9.9% (based on net worth).

The article said something about acquiring wealth through real estate. The world has operated this way for thousands of years. I guess that I'm guilty of educating myself on what builds wealth.

It's kind of a weird statement to say that the top 9.9% are responsible for making the world more affordable. However, I feel like I do this. I'm currently renting out a home for $2150/month and the market rent is $2450/month. It's a couple in their mid to late 20's that want to buy a home and they are good tenants. Their discount instantly makes life more affordable and also gives them a better chance of buying a house in the near future.

They could easily rent a 2-bedroom condo (900 sq. ft.) for cheaper, but they really like having the extra space of a 3 bed/2 bath/2 car garage (1750 sq. ft.). They also make about 150K/year combined. They have a 2021 Hyundai Santa Fe in the driveway and a Jetta (2015 to 2018). My wife and I both drive cars from 2007. I like them as tenants, so I'm not judging. They can afford it. Their cars are reasonable based on their income. However, I do not buy the narrative that greedy landlords are taking advantage of renters who are poor.   

I have another single family home with a legal mother-in-law suite in the basement. If I rented the home as 1-unit, I could probably get $4800/month. Instead, I rent the units separately, making each unit more affordable ($3400 & $2140). I get more rent and the tenants get a more affordable place to live. It's a win-win.

The biggest difference that I see is financial education. If you want to build wealth, you first need to understand how to do it and then have the discipline to focus on those things. I think high financial education is more likely among those with college degrees, but it's not guaranteed. Teachers make very little, but is the #3 occupation for being a millionaire. Engineer and accountant are #1 & #2.

The part that frustrates me the most is people making poor financial decisions and then complaining that they can't get ahead and blame the rich for their problems. I don't know their full story, but buying the new car is most likely not going to help them build wealth. 

« Last Edit: July 03, 2022, 10:08:41 AM by clarkfan1979 »

roomtempmayo

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I wonder if a metric that evaluates job insecurity, rather than earnings or stuff owned or sqft of house would be useful.

Looking back at this thread after its resurrection, @Abe 's post stood out to me.

One surprising study I remember reading about after the GFC that has stuck with me (sorry, no citation beyond my recollection) found a bit paradoxically that people are pretty good at saving for retirement as long as their employer offers a plan, but they are really bad at getting to retirement with a nest egg. 

Wait, what?

The explanation is that people tend to liquidate their retirement plans when they change employers or get laid off.  What undercuts lots of retirements isn't really a lack of saving, it's an inability to weather financial volatility.

Stability and security are likely not just mental goods, they impact our ability to grow a nest egg for retirement.

talltexan

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Indeed my parents were not very successful in accumulated money or generating a high income through age 40. But--as college professors--they were able to stay in the same jobs for three decades apiece, and that continuity really saw them through a lot of risks that others must manage.

RetireOrDieTrying

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Wow, the calculators in this thread really point out how fortunate I am, even though I feel hand-to-mouth.

I relate to the original topic. I'm evidently in the top 3.5% of U.S. income earners (much to my shock), and I live fairly frugally. I don't feel well-off at all. The best I can say is I don't feel financially hopeless. There's still that looming anxiety that my savings won't be enough someday.

With that said, I have visited e.g. India, and I'm acutely aware of the comparativeness of what I consider to be frugal vs. people living on a buck a day. In the eyes of my friends in India, I'm ludicrously awash in luxury.


Michael in ABQ

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Wow, the calculators in this thread really point out how fortunate I am, even though I feel hand-to-mouth.

I relate to the original topic. I'm evidently in the top 3.5% of U.S. income earners (much to my shock), and I live fairly frugally. I don't feel well-off at all. The best I can say is I don't feel financially hopeless. There's still that looming anxiety that my savings won't be enough someday.

With that said, I have visited e.g. India, and I'm acutely aware of the comparativeness of what I consider to be frugal vs. people living on a buck a day. In the eyes of my friends in India, I'm ludicrously awash in luxury.

When I compare my lifestyle to what I saw in Africa, i.e. people living in what was literally a pile of rocks in a ring covered in sticks and plastic - or in a tent that was donated by some aid organization, I can't complain. I make more in a day than they'll make in a year.

mm1970

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Wow, the calculators in this thread really point out how fortunate I am, even though I feel hand-to-mouth.

I relate to the original topic. I'm evidently in the top 3.5% of U.S. income earners (much to my shock), and I live fairly frugally. I don't feel well-off at all. The best I can say is I don't feel financially hopeless. There's still that looming anxiety that my savings won't be enough someday.

With that said, I have visited e.g. India, and I'm acutely aware of the comparativeness of what I consider to be frugal vs. people living on a buck a day. In the eyes of my friends in India, I'm ludicrously awash in luxury.

When I compare my lifestyle to what I saw in Africa, i.e. people living in what was literally a pile of rocks in a ring covered in sticks and plastic - or in a tent that was donated by some aid organization, I can't complain. I make more in a day than they'll make in a year.
Necropost! I like it and seems like an interesting thread.

Years ago I read a book that showed what different "average" people around the world owned. They piled up.all their possessions in front of their houses and the Author photographed it. It was pretty mind boggling to see how few things others owned and how little they lived on. I can't remember the name but something like "Material World". 

 Having done rescue/humanitarian aid work in places like Haiti, or just picked them up at sea with all their worldly possession in a small plastic bag, I'd recommend anyone who feels poor to spend some time in those types of places. It will definitely change your world view.

https://www.amazon.com/Material-World-Global-Family-Portrait/dp/0871564300

I have this book.

eyesonthehorizon

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Wow, the calculators in this thread really point out how fortunate I am, even though I feel hand-to-mouth.

I relate to the original topic. I'm evidently in the top 3.5% of U.S. income earners (much to my shock), and I live fairly frugally. I don't feel well-off at all. The best I can say is I don't feel financially hopeless. There's still that looming anxiety that my savings won't be enough someday.  ...
This sounds like you are presented with a really bad basis for comparison - are all your neighbors making more? I would try to both cut my consumption (drastically, if you feel hand to mouth at that income), & move, unless you truly believe you are in the absolute optimum location, because if you're the recipient of that kind of income firehose - not even a firehose, a daily tidal wave - but still come away feeling hand to mouth, something's terribly wrong*. That sounds like misery you can't afford. The rest would follow pretty naturally.

*Sometimes what is wrong is medical bills, which is genuinely a problem outside your area of control, but almost anything else is not.

Edited to add: wait, didn't you mention a 60%+ savings rate in your case study? In that case, feeling hand to mouth might also benefit from some therapy. I don't say this with any negative intent, but in the friendly facepunch sense, since you've requested them on that thread: that problem is very real & sounds like it's impacting you strongly. You don't have to live under that particular cloud nor do you deserve to. Your neighbors may be a rotating cast when traveling, but that doesn't mean they aren't setting a standard that's impossible for any sensible spending to rival, so trying to find people who live in an everyday way to spend time with could be really helpful in setting a healthy baseline.
« Last Edit: April 08, 2023, 07:39:44 PM by eyesonthehorizon »

RetireOrDieTrying

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  • Gallivantin' across the US
Edited to add: wait, didn't you mention a 60%+ savings rate in your case study? In that case, feeling hand to mouth might also benefit from some therapy. I don't say this with any negative intent, but in the friendly facepunch sense, since you've requested them on that thread: that problem is very real & sounds like it's impacting you strongly. You don't have to live under that particular cloud nor do you deserve to. Your neighbors may be a rotating cast when traveling, but that doesn't mean they aren't setting a standard that's impossible for any sensible spending to rival, so trying to find people who live in an everyday way to spend time with could be really helpful in setting a healthy baseline.

I don't really have "keeping-up-with-the-Jones" syndrome, thankfully. I can simultaneously appreciate someone else's nice stuff without feeling any need to have it myself, or to feel like the poor cousin by comparison. Their success is no skin off my nose. I'm totally happy with my life - I think it's great, in fact.

My hand-to-mouth phobia comes from the realization that I've got to save like a madman in order to even have a chance of retiring at a sensible age. My delayed-onset retirement savings have me razor-focused on socking away every dime I can, so I'm perpetually analyzing where I could be more efficient to that end. This leaves me with a "make do" mentality as if I made a fraction of what I actually do, and a feeling that I need to stretch every penny as if I genuinely didn't have any extra.

eyesonthehorizon

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I don't really have "keeping-up-with-the-Jones" syndrome, thankfully. I can simultaneously appreciate someone else's nice stuff without feeling any need to have it myself, or to feel like the poor cousin by comparison. Their success is no skin off my nose. I'm totally happy with my life - I think it's great, in fact.

My hand-to-mouth phobia comes from the realization that I've got to save like a madman in order to even have a chance of retiring at a sensible age. My delayed-onset retirement savings have me razor-focused on socking away every dime I can, so I'm perpetually analyzing where I could be more efficient to that end. This leaves me with a "make do" mentality as if I made a fraction of what I actually do, and a feeling that I need to stretch every penny as if I genuinely didn't have any extra.

I detected anxiety or fear, not envious greed, but want to underscore you don't deserve to & don't have to live that way. ("Hand to mouth phobia" at your income sounds like psychological torture - at that rate, there's almost no income which could free you!) Would you say you experience concern more in a generalized or big picture sense of "ten years from now" worries, or does it make your day-to-day activities negative when it guides your every action? My day to day frugality & penny stretching is gamified, it's mostly fun, & I find it financially & emotionally rewarding. If I were worrying about each decision it would kill me. You're able to be out of debt in under two years from the sound of it, at which point you could devote your enormous income just to the stash & lump that up extremely fast. A sufficiently strong spending to after-tax income ratio is magic that largely takes care of itself as long as working isn't miserable.

Where "making do" isn't at least sort of fun, I'd be shifting things around in my lifestyle to replace expenses with choices which are both fun & cheap. Subtracting negatives is often more effective than adding or even maintaining frills, & the more negatives are removed, the more pleasure tends to be found in otherwise neutral daily activities which improve or maintain your quality of life.

Dicey

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I don't really have "keeping-up-with-the-Jones" syndrome, thankfully. I can simultaneously appreciate someone else's nice stuff without feeling any need to have it myself, or to feel like the poor cousin by comparison. Their success is no skin off my nose. I'm totally happy with my life - I think it's great, in fact.

My hand-to-mouth phobia comes from the realization that I've got to save like a madman in order to even have a chance of retiring at a sensible age. My delayed-onset retirement savings have me razor-focused on socking away every dime I can, so I'm perpetually analyzing where I could be more efficient to that end. This leaves me with a "make do" mentality as if I made a fraction of what I actually do, and a feeling that I need to stretch every penny as if I genuinely didn't have any extra.

I detected anxiety or fear, not envious greed, but want to underscore you don't deserve to & don't have to live that way. ("Hand to mouth phobia" at your income sounds like psychological torture - at that rate, there's almost no income which could free you!) Would you say you experience concern more in a generalized or big picture sense of "ten years from now" worries, or does it make your day-to-day activities negative when it guides your every action? My day to day frugality & penny stretching is gamified, it's mostly fun, & I find it financially & emotionally rewarding. If I were worrying about each decision it would kill me. You're able to be out of debt in under two years from the sound of it, at which point you could devote your enormous income just to the stash & lump that up extremely fast. A sufficiently strong spending to after-tax income ratio is magic that largely takes care of itself as long as working isn't miserable.

Where "making do" isn't at least sort of fun, I'd be shifting things around in my lifestyle to replace expenses with choices which are both fun & cheap. Subtracting negatives is often more effective than adding or even maintaining frills, & the more negatives are removed, the more pleasure tends to be found in otherwise neutral daily activities which improve or maintain your quality of life.
Yup. I've always made a game of it. Now that it's no longer necessary,  it's still easy to do.

I had a conversation with a friend yesterday who said the same thing. When she was a kid, her mother actually used to take her to the dump to scavenge for treasures. Nowadays, you'd never know either of us came up as black-belt thrifters.

To that I'll add that I always made time to do the important things. I went to the weddings, kissed the babies, dressed well, lived in a nice home and satisfied my wanderlust, all for less than it seemed like I was spending. It might have taken me longer to FIRE, but it was a great ride getting there.

farmecologist

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I don't really have "keeping-up-with-the-Jones" syndrome, thankfully. I can simultaneously appreciate someone else's nice stuff without feeling any need to have it myself, or to feel like the poor cousin by comparison. Their success is no skin off my nose. I'm totally happy with my life - I think it's great, in fact.

My hand-to-mouth phobia comes from the realization that I've got to save like a madman in order to even have a chance of retiring at a sensible age. My delayed-onset retirement savings have me razor-focused on socking away every dime I can, so I'm perpetually analyzing where I could be more efficient to that end. This leaves me with a "make do" mentality as if I made a fraction of what I actually do, and a feeling that I need to stretch every penny as if I genuinely didn't have any extra.

I detected anxiety or fear, not envious greed, but want to underscore you don't deserve to & don't have to live that way. ("Hand to mouth phobia" at your income sounds like psychological torture - at that rate, there's almost no income which could free you!) Would you say you experience concern more in a generalized or big picture sense of "ten years from now" worries, or does it make your day-to-day activities negative when it guides your every action? My day to day frugality & penny stretching is gamified, it's mostly fun, & I find it financially & emotionally rewarding. If I were worrying about each decision it would kill me. You're able to be out of debt in under two years from the sound of it, at which point you could devote your enormous income just to the stash & lump that up extremely fast. A sufficiently strong spending to after-tax income ratio is magic that largely takes care of itself as long as working isn't miserable.

Where "making do" isn't at least sort of fun, I'd be shifting things around in my lifestyle to replace expenses with choices which are both fun & cheap. Subtracting negatives is often more effective than adding or even maintaining frills, & the more negatives are removed, the more pleasure tends to be found in otherwise neutral daily activities which improve or maintain your quality of life.
Yup. I've always made a game of it. Now that it's no longer necessary,  it's still easy to do.

I had a conversation with a friend yesterday who said the same thing. When she was a kid, her mother actually used to take her to the dump to scavenge for treasures. Nowadays, you'd never know either of us came up as black-belt thrifters.

To that I'll add that I always made time to do the important things. I went to the weddings, kissed the babies, dressed well, lived in a nice home and satisfied my wanderlust, all for less than it seemed like I was spending. It might have taken me longer to FIRE, but it was a great ride getting there.

A 'game of it' is a great way to put it.  Exactly what we do as well.  I also have an active disgust of those that flaunt their 'belongings'.   Notice that I said 'belongings'...because many of them are NOT wealthy/rich...but are doing the "Joneses" thing.   For us, 'stealth wealth' is the way to go.

As for us, we have been in the two-comma-club (with >=2 before the first comma), and completely debt free, for quite some time.  However, we don't feel 'wealthy' at at all...and it seems this is a common feeling for people in our situation.   Healthcare still is a major concern, since one of us has a chronic condition.  A suitable healthcare plan would be extremely costly, and is the sole reason we are still working.   I really wish we had a sane healthcare system here in the USA...it sucks.  Maybe I need to be more of an optimist and just pull the trigger and retire early...


« Last Edit: April 11, 2023, 10:57:36 AM by farmecologist »

eyesonthehorizon

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Yup. I've always made a game of it. Now that it's no longer necessary,  it's still easy to do.
...
To that I'll add that I always made time to do the important things. I went to the weddings, kissed the babies, dressed well, lived in a nice home and satisfied my wanderlust, all for less than it seemed like I was spending. It might have taken me longer to FIRE, but it was a great ride getting there.
It's only work when it's a change, I think. Those of us in the habit just think of it as regular living & the benefits are both pervasive & decrease the effort it takes to keep going. Like exercise. Neither does it stop you pursuing your joys. I could probably have done with more of your style of balance, though.

A 'game of it' is a great way to put it.  Exactly what we do as well.  I also have an active disgust of those that flaunt their 'belongings'.   Notice that I said 'belongings'...because many of them are NOT wealthy/rich...but are doing the "Joneses" thing.   For us, 'stealth wealth' is the way to go.

As for us, we have been in the two-comma-club (with >=2 before the first comma), and completely debt free, for quite some time.  However, we don't feel 'wealthy' at at all...and it seems this is a common feeling for people in our situation.   Healthcare still is a major concern, since one of us has a chronic condition.  A suitable healthcare plan would be extremely costly, and is the sole reason we are still working.   I really wish we had a sane healthcare system here in the USA...it sucks.  Maybe I need to be more of an optimist and just pull the trigger and retire early...
Healthcare here is a horror, both ethically in consideration of human welfare & in the staggering waste it generates. In the system's efforts to skim profit off every step of the care process, it also amplifies waste & costs to the Nth degree. The more of it you see the more sick it's shown to be. No wonder our doctors are paid more than in most nations; it has largely become a miserable job no one would put up with otherwise. People who get into it to help people aren't always the sort to be consoled by a paycheck when the system is designed to defeat that impulse, so suicide rates are extremely high in the profession.

I have substantially less to my name - though I feel very wealthy on a daily basis! Health care access is my personal terror, too. But the amount of wealth required to be safe from medical need in this country is astronomical. Anyone short of the decamillionaires is aware that their life's savings could be wiped out overnight with a single diagnosis, & if the money stops, so does the treatment. I'm astounded that there hasn't been more public pressure for universalizing health care when a majority of the public supports it.

Despite a dwarf 'stache, I've reached the point where I'm realizing that the probable wealth cost alone of diminished health via continued work is not worth the assured wealth increase, & I need to hurry up & quit already.

TreeLeaf

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Yup. I've always made a game of it. Now that it's no longer necessary,  it's still easy to do.
...
To that I'll add that I always made time to do the important things. I went to the weddings, kissed the babies, dressed well, lived in a nice home and satisfied my wanderlust, all for less than it seemed like I was spending. It might have taken me longer to FIRE, but it was a great ride getting there.
It's only work when it's a change, I think. Those of us in the habit just think of it as regular living & the benefits are both pervasive & decrease the effort it takes to keep going. Like exercise. Neither does it stop you pursuing your joys. I could probably have done with more of your style of balance, though.

A 'game of it' is a great way to put it.  Exactly what we do as well.  I also have an active disgust of those that flaunt their 'belongings'.   Notice that I said 'belongings'...because many of them are NOT wealthy/rich...but are doing the "Joneses" thing.   For us, 'stealth wealth' is the way to go.

As for us, we have been in the two-comma-club (with >=2 before the first comma), and completely debt free, for quite some time.  However, we don't feel 'wealthy' at at all...and it seems this is a common feeling for people in our situation.   Healthcare still is a major concern, since one of us has a chronic condition.  A suitable healthcare plan would be extremely costly, and is the sole reason we are still working.   I really wish we had a sane healthcare system here in the USA...it sucks.  Maybe I need to be more of an optimist and just pull the trigger and retire early...
Healthcare here is a horror, both ethically in consideration of human welfare & in the staggering waste it generates. In the system's efforts to skim profit off every step of the care process, it also amplifies waste & costs to the Nth degree. The more of it you see the more sick it's shown to be. No wonder our doctors are paid more than in most nations; it has largely become a miserable job no one would put up with otherwise. People who get into it to help people aren't always the sort to be consoled by a paycheck when the system is designed to defeat that impulse, so suicide rates are extremely high in the profession.

I have substantially less to my name - though I feel very wealthy on a daily basis! Health care access is my personal terror, too. But the amount of wealth required to be safe from medical need in this country is astronomical. Anyone short of the decamillionaires is aware that their life's savings could be wiped out overnight with a single diagnosis, & if the money stops, so does the treatment. I'm astounded that there hasn't been more public pressure for universalizing health care when a majority of the public supports it.

Despite a dwarf 'stache, I've reached the point where I'm realizing that the probable wealth cost alone of diminished health via continued work is not worth the assured wealth increase, & I need to hurry up & quit already.

The aca actually makes healthcare pretty affordable for lower income people who are FIRE.

For example, in my state I can quit my job tomorrow and sign up for medicaid and still pull 50k / year from investments.

Medicaid also pays for a free gym, free dental, and they not only pay the doctor to see you but they pay YOU to see the doctor. It's pretty wild, and frankly a strong incentive to quit. There is also the free internet, free phones, free college tuition, etc. It's pretty wild.

Michael in ABQ

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Yup. I've always made a game of it. Now that it's no longer necessary,  it's still easy to do.
...
To that I'll add that I always made time to do the important things. I went to the weddings, kissed the babies, dressed well, lived in a nice home and satisfied my wanderlust, all for less than it seemed like I was spending. It might have taken me longer to FIRE, but it was a great ride getting there.
It's only work when it's a change, I think. Those of us in the habit just think of it as regular living & the benefits are both pervasive & decrease the effort it takes to keep going. Like exercise. Neither does it stop you pursuing your joys. I could probably have done with more of your style of balance, though.

A 'game of it' is a great way to put it.  Exactly what we do as well.  I also have an active disgust of those that flaunt their 'belongings'.   Notice that I said 'belongings'...because many of them are NOT wealthy/rich...but are doing the "Joneses" thing.   For us, 'stealth wealth' is the way to go.

As for us, we have been in the two-comma-club (with >=2 before the first comma), and completely debt free, for quite some time.  However, we don't feel 'wealthy' at at all...and it seems this is a common feeling for people in our situation.   Healthcare still is a major concern, since one of us has a chronic condition.  A suitable healthcare plan would be extremely costly, and is the sole reason we are still working.   I really wish we had a sane healthcare system here in the USA...it sucks.  Maybe I need to be more of an optimist and just pull the trigger and retire early...
Healthcare here is a horror, both ethically in consideration of human welfare & in the staggering waste it generates. In the system's efforts to skim profit off every step of the care process, it also amplifies waste & costs to the Nth degree. The more of it you see the more sick it's shown to be. No wonder our doctors are paid more than in most nations; it has largely become a miserable job no one would put up with otherwise. People who get into it to help people aren't always the sort to be consoled by a paycheck when the system is designed to defeat that impulse, so suicide rates are extremely high in the profession.

I have substantially less to my name - though I feel very wealthy on a daily basis! Health care access is my personal terror, too. But the amount of wealth required to be safe from medical need in this country is astronomical. Anyone short of the decamillionaires is aware that their life's savings could be wiped out overnight with a single diagnosis, & if the money stops, so does the treatment. I'm astounded that there hasn't been more public pressure for universalizing health care when a majority of the public supports it.

Despite a dwarf 'stache, I've reached the point where I'm realizing that the probable wealth cost alone of diminished health via continued work is not worth the assured wealth increase, & I need to hurry up & quit already.

The odds of requiring medical care that would cost millions of dollars is vanishingly small. And a high-deductible health insurance plan would help protect against some of that risk. I can't even fathom health care that would cost tens of millions of dollars. A $100,000 for a major surgery or hundreds of thousands for cancer treatment is certainly not a rare occurrence - but if you have a net worth of millions that's not going to wipe you out. Especially if you have any sort of health insurance. I mean that's exactly what it's for - those very rare but very expensive occurrences. Not paying only $50 for a 15-minute visit to your doctor (which they billed insurance $200 - knowing they would actually collect $100).

Dicey

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Yup. I've always made a game of it. Now that it's no longer necessary,  it's still easy to do.
...
To that I'll add that I always made time to do the important things. I went to the weddings, kissed the babies, dressed well, lived in a nice home and satisfied my wanderlust, all for less than it seemed like I was spending. It might have taken me longer to FIRE, but it was a great ride getting there.
It's only work when it's a change, I think. Those of us in the habit just think of it as regular living & the benefits are both pervasive & decrease the effort it takes to keep going. Like exercise. Neither does it stop you pursuing your joys. I could probably have done with more of your style of balance, though.

A 'game of it' is a great way to put it.  Exactly what we do as well.  I also have an active disgust of those that flaunt their 'belongings'.   Notice that I said 'belongings'...because many of them are NOT wealthy/rich...but are doing the "Joneses" thing.   For us, 'stealth wealth' is the way to go.

As for us, we have been in the two-comma-club (with >=2 before the first comma), and completely debt free, for quite some time.  However, we don't feel 'wealthy' at at all...and it seems this is a common feeling for people in our situation.   Healthcare still is a major concern, since one of us has a chronic condition.  A suitable healthcare plan would be extremely costly, and is the sole reason we are still working.   I really wish we had a sane healthcare system here in the USA...it sucks.  Maybe I need to be more of an optimist and just pull the trigger and retire early...
Healthcare here is a horror, both ethically in consideration of human welfare & in the staggering waste it generates. In the system's efforts to skim profit off every step of the care process, it also amplifies waste & costs to the Nth degree. The more of it you see the more sick it's shown to be. No wonder our doctors are paid more than in most nations; it has largely become a miserable job no one would put up with otherwise. People who get into it to help people aren't always the sort to be consoled by a paycheck when the system is designed to defeat that impulse, so suicide rates are extremely high in the profession.

I have substantially less to my name - though I feel very wealthy on a daily basis! Health care access is my personal terror, too. But the amount of wealth required to be safe from medical need in this country is astronomical. Anyone short of the decamillionaires is aware that their life's savings could be wiped out overnight with a single diagnosis, & if the money stops, so does the treatment. I'm astounded that there hasn't been more public pressure for universalizing health care when a majority of the public supports it.

Despite a dwarf 'stache, I've reached the point where I'm realizing that the probable wealth cost alone of diminished health via continued work is not worth the assured wealth increase, & I need to hurry up & quit already.

The odds of requiring medical care that would cost millions of dollars is vanishingly small. And a high-deductible health insurance plan would help protect against some of that risk. I can't even fathom health care that would cost tens of millions of dollars. A $100,000 for a major surgery or hundreds of thousands for cancer treatment is certainly not a rare occurrence - but if you have a net worth of millions that's not going to wipe you out. Especially if you have any sort of health insurance. I mean that's exactly what it's for - those very rare but very expensive occurrences. Not paying only $50 for a 15-minute visit to your doctor (which they billed insurance $200 - knowing they would actually collect $100).
I turned 65 a few short weeks ago, finally qualifying for Medicare. Alas, since then I have had three outpatient procedures, including a breast cancer diagnosis and lumpectomy. My total OOP for everything is way under $100, including genetic testing and Oncotype Dx testing. In fact, during today's procedure, the doctor ordered a prescription for 10 tablets of Oxycodone. While I was out, this message was sent to the pharmacy and DH was sent to pick it up.* It cost a whopping thirty three cents. (Not a typo.)

In all the years I stressed about future medical costs, I never understood how freaking amazing Medicare is. The gorilla in the Medical Room of the Future is certainly a lot less frightening, based on my current real-time experience. I am utterly gobsmacked and incredibly relieved.

*In pre-op, I told them I did not want Oxycodone. Apparently during the procedure the doctor decided I was going to need it and ordered it anyway. I can't exactly be pissed if it only cost thirty three cents OOP. FWIW, I don't intend to use it, but we'll see how the next few days go. Edit: I just read the label: it specifically states that it's to be used "for severe pain if other pain medications are ineffective. Use sparingly." Wow, I can't begrudge that thirty three cents at all.

I cannot emphasize how much I worried about future medical costs along the path to FIRE. I know Medicare doesn't cover everything, but I cannot believe what it does cover.

Fun note: When the pre-op nurse asked me if I was retired, I told him I'd been retired for 11 years. He then said he had a friend who was into something called FIRE and I literally started laughing. We had a nice conversation after we got all the medical stuff out of the way.

StarBright

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I turned 65 a few short weeks ago, finally qualifying for Medicare. Alas, since then I have had three outpatient procedures, including a breast cancer diagnosis and lumpectomy. My total OOP for everything is way under $100, including genetic testing and Oncotype Dx testing. In fact, during today's procedure, the doctor ordered a prescription for 10 tablets of Oxycodone. While I was out, this message was sent to the pharmacy and DH was sent to pick it up.* It cost a whopping thirty three cents. (Not a typo.)

In all the years I stressed about future medical costs, I never understood how freaking amazing Medicare is. The gorilla in the Medical Room of the Future is certainly a lot less frightening, based on my current real-time experience. I am utterly gobsmacked and incredibly relieved.

*In pre-op, I told them I did not want Oxycodone. Apparently during the procedure the doctor decided I was going to need it and ordered it anyway. I can't exactly be pissed if it only cost thirty three cents OOP. FWIW, I don't intend to use it, but we'll see how the next few days go. Edit: I just read the label: it specifically states that it's to be used "for severe pain if other pain medications are ineffective. Use sparingly." Wow, I can't begrudge that thirty three cents at all.

I cannot emphasize how much I worried about future medical costs along the path to FIRE. I know Medicare doesn't cover everything, but I cannot believe what it does cover.

Fun note: When the pre-op nurse asked me if I was retired, I told him I'd been retired for 11 years. He then said he had a friend who was into something called FIRE and I literally started laughing. We had a nice conversation after we got all the medical stuff out of the way.

As someone who has started avoiding my annual appointments because I hate paying $200 out of pocket if I answer a question the wrong way or have bloodwork come make with a quirk (turning it from free annual to chargeable "problem visit") the medicare thing makes me happy! Only 25 more years to go :)  Medicare for all please!

« Last Edit: April 14, 2023, 05:49:33 AM by StarBright »