Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Good fun value, but almost an apples-to-oranges figure. The definition of income (see "definitions" link) appears to be the AGI definition used for determining SS taxability, as it includes tax-exempt income. So that would appear to push the requirement to be in the top half higher than normally quoted. Yet the median household income $50,964 (June 2012) comes out in the 57th percentile according to the calculator.
Perhaps this is because, while the input asked for is "household income" (whatever "income" means), that income is being compared to all "tax filing units" which could include a large number of single filers (who would tend to have lower incomes than household units filing jointly).
On the "income" side, the text talks about "salary", yet income encompasses much more than that, especially for the one percenters.
Whatever. Easy to use, probably gets you within 10%.
The book, The Millionaire Next Door (1998), although now dated for monetary values from inflation; remains consistent over the years relative to the human element and mind set that determines true net annual or net worth income; which is the true measure of anyone's wealth. The apparent millionaire next door has poor spending/budget habits, does not save much and invests little; and would be surprised by their neighbor's net worth.
We have given 6 of these books, over the past 10 years, as add-on wedding gifts. Hopefully, the book was read by the couple; and they learned something about wealth generation.
imho - for some reasons, I don't think most Americans 'feel' they are better off than they were back in 2005-2007. Gas and inflation are bad, seems like you have less for your money these days. Your house is about 60% of what it was your 401K nest egg got robbed since the crash you are making much less and your employer refuse to give any raise for 5 yrs many unemployed and under employed
gold has more than double since so if you are a millionaire now, you are probably need more than two millions [inflations accounted] compared to 2007
2x inflation since 2007? Not where we live. Do you need twice the money for your standard of living, versus 2007, in Texas? Things must be popp'in more there than I recall.
The "official" CPI guage indicates that what cost $1 in 2007, costs $1.10 as of July, 2012.
Now, the official gov't. CPI is not a favorite of mine; but this current measure is probably close for most of us regular folks, and surely not doubled.
I know the 2008-09 crash took a lot out of my 401K, but I have more than made up for it since then. Not that I am some investment genius, but I think I have invested well. I rode the bull market since then and have done very well because I had choices in managing my 401K investment vehicles. But I know people who have not made up any of those loses who were able to make investment decisions because they were afraid they would lose more and they have remained largely in cash or in relatively safe, but underperforming investments. Sure, my home value has declined but not by 60%. I bought a home in 2007 (that was bad timing) and today it is valued at about 10-15% less than when I bought it. The value has risen in the past year by about 5%.
From what I read, my wife and I must be the exception. She retired at 62 one year ago and I retired in December at 59. Our investment income is about what our combined salaries were when we were both working. I attribute that to being fully invested in 2009 coming out of the crash and buying some "blue light special" stocks and funds at that time.
For those who had the ability to invest their retirement funds and who did it, I look at 2009 as a kind of once-in-a-lifetime (I hope) opportunity to refill the lost 401K accounts.
For most of my investing years I was a growth investor looking for capital appreciation. After the 2008-09 crash I became a dividend income investor and that changed my financial future significantly. I began to seek sustainable dividend stocks or funds with high exposure to those stocks. That continues to pay off. Add in some higher risk speculative stocks and a couple of well managed growth funds and I am feeling like we have made some good decisions.
Then I talk to some of my wife's former colleagues who continue to have their 401K funds invested in money markets because they're afraid they will lose it all....
A few facts might surprise your pessimistic observations:
The crude oil has topped $147 in 2008 before President Obama took office. Today it is around $97 (WTI), $114 (Brent). In fact the decline in oil prices following 2008 recession also doomed the green energy development. Here in Texas there were more interest in energy efficient/hybrid small cars in 2008. Now we are back to trucks and SUVs again. As for gasoline price: Gallon of Gas in NY State was $4.24 in July 2008 and was $3.65 in July 2012. In other words, much of the oil/gasoline price increases took place before 2008. Yes, there was a drop in prices after 2008 due to recession but 4 years after the peak we have not yet returned the same price levels.
Your house price drop of 60% is not typical. Here is Case-Shiller 20 city declines from peak prices over years. Las Vegas did go through over 60% decline in the worst but in Texas the price declines were in single digits at worst. The information stops in March 2012 in this chart but since than the home prices are actually increasing.
Also remember that this is measured from the peak. A lot of people did not buy at the peak and did not actually experience real losses. I realize there are still problems in this area but excesses that was built during GWB era is now being worked.
401k: If you have actually kept the course and did not pull out all after the crash and stay in money market, your portfolio should have recovered by now. Assume you invested in a balanced portfolio similar to VBINX
I agree, unemployment is still high in particular if you do not have higher education. I believe the spillover from second recession in Europe is causing the companies to hold back in hiring. A lot of companies has seen demand for their products decline due to Europe situation.
If you are millionaire now, you still do pretty good with the same million. Part of the period was deflationary and dis-inflationary due to credit (debt) driven recession. Some things have gone up (such as food) but other things came down balancing it out and inflation has been low despite all those pontification of so-called gurus on TV. Please remember food is on average 6-7% of spending of average US household but since you shop for food and gas frequently those prices are most visible and there is recency bias.
I think you should stop listening to talk radio cool-aid and run the numbers yourself.
Reply to @Investor: Ah yes, Austin. Stomping grounds of Molly Ivins. Wonderful writer... really liked her stuff. Does Austin have a high stockade to protect you folks from the rest of the Texans?
Reply to @johnN: John, your valuation and inflation data is questionable, but I don't think you are to off-base here in your thought. I think there is a much bigger gap between the haves and have nots today. I don't have data on that statement - just my perception. Those without jobs and those that have had to change to lower paying jobs, for sure they do not feel better off today.
The ironic part of your statement is that if people did feel "better off" in 2005-2007, it is because they weren't aware of the economic tsunami about to crash down on them. The seeds of the great recession were planted way before 2008.
Reply to @MikeM: I don't know about anyone else -I know food costs have crept higher, but I think I've really noticed lately basic goods (shampoo, toothpaste) are noticeably higher than a few years ago.
Reply to @scott: HI Scott. You could be right. I'm a terrible shopper. I'll look around for the best unit cost, but I don't keep track month to month let a lone year to year. Pretty sure though costs haven't doubled since 2007 as John alludes to.
Hi Mike- no, surely not doubled, but we do keep a pretty good eye on prices, and while I realize that San Francisco is a pretty high COL, there's no doubt that there's been a pretty good price creep/size shrinkage on a lot of stuff.
We eat pretty well here, ind it may be that because a fair amount of our groceries are somewhat better than average, the national COL figures don't reflect that.
I imagine, for example, that the national COL figure for bread would be based on the average price of a loaf of white sliced, as opposed to maybe a loaf of French. So it's kinda hard to really know...
Reply to @Old_Joe: Austin and Cali are like two peas in a pod ... LOL. I think in Texas most major cities [Houston/Dallas/ San Antonio] are more liberal/democratic. But in the counties/sub urban areas people are different. I think Austin economy maybe slightly better than cali because of more oil/commodities jobs
I don't need an app. I'm not in the 1%. And THAT is all that matters as long as MONEY matters.
In ethics, morality, contribution to society, modesty (no really), lack of hair, I'm in the top 0.000000001 %. And no, I don't need an app for that either.
Reply to @johnN: Hi John - This would go well with my earlier thread on "The election and investment opportunities" which has a link about economic benefits to strip clubs.
Yikes - from your story - "... puddles in the parking lot under a sign that boasts "OMG! These girls are hot!"
Comments
Perhaps this is because, while the input asked for is "household income" (whatever "income" means), that income is being compared to all "tax filing units" which could include a large number of single filers (who would tend to have lower incomes than household units filing jointly).
On the "income" side, the text talks about "salary", yet income encompasses much more than that, especially for the one percenters.
Whatever. Easy to use, probably gets you within 10%.
Comments sections always worth some interesting opinions
The book, The Millionaire Next Door (1998), although now dated for monetary values from inflation; remains consistent over the years relative to the human element and mind set that determines true net annual or net worth income; which is the true measure of anyone's wealth. The apparent millionaire next door has poor spending/budget habits, does not save much and invests little; and would be surprised by their neighbor's net worth.
We have given 6 of these books, over the past 10 years, as add-on wedding gifts. Hopefully, the book was read by the couple; and they learned something about wealth generation.
Regards,
Catch
imho - for some reasons, I don't think most Americans 'feel' they are better off than they were back in 2005-2007. Gas and inflation are bad, seems like you have less for your money these days.
Your house is about 60% of what it was
your 401K nest egg got robbed since the crash
you are making much less and your employer refuse to give any raise for 5 yrs
many unemployed and under employed
gold has more than double since
so if you are a millionaire now, you are probably need more than two millions [inflations accounted] compared to 2007
2x inflation since 2007? Not where we live. Do you need twice the money for your standard of living, versus 2007, in Texas? Things must be popp'in more there than I recall.
The "official" CPI guage indicates that what cost $1 in 2007, costs $1.10 as of July, 2012.
Now, the official gov't. CPI is not a favorite of mine; but this current measure is probably close for most of us regular folks, and surely not doubled.
Take care,
Catch
I know the 2008-09 crash took a lot out of my 401K, but I have more than made up for it since then. Not that I am some investment genius, but I think I have invested well. I rode the bull market since then and have done very well because I had choices in managing my 401K investment vehicles. But I know people who have not made up any of those loses who were able to make investment decisions because they were afraid they would lose more and they have remained largely in cash or in relatively safe, but underperforming investments. Sure, my home value has declined but not by 60%. I bought a home in 2007 (that was bad timing) and today it is valued at about 10-15% less than when I bought it. The value has risen in the past year by about 5%.
From what I read, my wife and I must be the exception. She retired at 62 one year ago and I retired in December at 59. Our investment income is about what our combined salaries were when we were both working. I attribute that to being fully invested in 2009 coming out of the crash and buying some "blue light special" stocks and funds at that time.
For those who had the ability to invest their retirement funds and who did it, I look at 2009 as a kind of once-in-a-lifetime (I hope) opportunity to refill the lost 401K accounts.
For most of my investing years I was a growth investor looking for capital appreciation. After the 2008-09 crash I became a dividend income investor and that changed my financial future significantly. I began to seek sustainable dividend stocks or funds with high exposure to those stocks. That continues to pay off. Add in some higher risk speculative stocks and a couple of well managed growth funds and I am feeling like we have made some good decisions.
Then I talk to some of my wife's former colleagues who continue to have their 401K funds invested in money markets because they're afraid they will lose it all....
A few facts might surprise your pessimistic observations:
The crude oil has topped $147 in 2008 before President Obama took office. Today it is around $97 (WTI), $114 (Brent). In fact the decline in oil prices following 2008 recession also doomed the green energy development. Here in Texas there were more interest in energy efficient/hybrid small cars in 2008. Now we are back to trucks and SUVs again. As for gasoline price: Gallon of Gas in NY State was $4.24 in July 2008 and was $3.65 in July 2012. In other words, much of the oil/gasoline price increases took place before 2008. Yes, there was a drop in prices after 2008 due to recession but 4 years after the peak we have not yet returned the same price levels.
Ref: http://www.nyserda.ny.gov/Page-Sections/Energy-Prices-Supplies-and-Weather-Data/Motor-Gasoline/Monthly-Average-Motor-Gasoline-Prices.aspx
Your house price drop of 60% is not typical. Here is Case-Shiller 20 city declines from peak prices over years. Las Vegas did go through over 60% decline in the worst but in Texas the price declines were in single digits at worst. The information stops in March 2012 in this chart but since than the home prices are actually increasing.
http://cr4re.com/images/CSCitiesMar2012.jpg
Also remember that this is measured from the peak. A lot of people did not buy at the peak and did not actually experience real losses. I realize there are still problems in this area but excesses that was built during GWB era is now being worked.
401k: If you have actually kept the course and did not pull out all after the crash and stay in money market, your portfolio should have recovered by now. Assume you invested in a balanced portfolio similar to VBINX
2008: -22.21%
2009: 20.05%
2010: 13.13%
2011: 4.14%
2012: 8.91% (YTD, 8/23/2012)
Cumulative: From Jan 1, 2008 to Aug 23, 2012 your portfolio should have been up 19.83%.
Or say you were more aggressive and invested in something like VTSMX which is pure equity:
2008: -37.04%
2009: 28.70%
2010: 17.09%
2011: 0.96%
2012: 12.63% (YTD, 8/23/2012)
Cumulative: You are up 7.89%
I agree, unemployment is still high in particular if you do not have higher education. I believe the spillover from second recession in Europe is causing the companies to hold back in hiring. A lot of companies has seen demand for their products decline due to Europe situation.
If you are millionaire now, you still do pretty good with the same million. Part of the period was deflationary and dis-inflationary due to credit (debt) driven recession. Some things have gone up (such as food) but other things came down balancing it out and inflation has been low despite all those pontification of so-called gurus on TV. Please remember food is on average 6-7% of spending of average US household but since you shop for food and gas frequently those prices are most visible and there is recency bias.
I think you should stop listening to talk radio cool-aid and run the numbers yourself.
I am way away from the Lubbock Judge. http://blog.sfgate.com/nov05election/2012/08/24/crazy-county-judge-makes-lubbock-texas-a-national-laughingstock/
"Occupy Wall Street Has Big Plans for the Republican National Convention"
http://www.businessinsider.com/occupy-wall-street-has-big-plans-for-the-republican-national-convention-2012-8
The ironic part of your statement is that if people did feel "better off" in 2005-2007, it is because they weren't aware of the economic tsunami about to crash down on them. The seeds of the great recession were planted way before 2008.
Take care.
We eat pretty well here, ind it may be that because a fair amount of our groceries are somewhat better than average, the national COL figures don't reflect that.
I imagine, for example, that the national COL figure for bread would be based on the average price of a loaf of white sliced, as opposed to maybe a loaf of French. So it's kinda hard to really know...
In ethics, morality, contribution to society, modesty (no really), lack of hair, I'm in the top 0.000000001 %. And no, I don't need an app for that either.
Hi Hank ...sorry if this is junk reply but saw these news on cnn recently
http://www.cnn.com/2012/08/23/politics/tampa-gop-strip-clubs/index.html
Yikes - from your story - "... puddles in the parking lot under a sign that boasts "OMG! These girls are hot!"