site banner

Wellness Wednesday for June 12, 2024

The Wednesday Wellness threads are meant to encourage users to ask for and provide advice and motivation to improve their lives. It isn't intended as a 'containment thread' and any content which could go here could instead be posted in its own thread. You could post:

  • Requests for advice and / or encouragement. On basically any topic and for any scale of problem.

  • Updates to let us know how you are doing. This provides valuable feedback on past advice / encouragement and will hopefully make people feel a little more motivated to follow through. If you want to be reminded to post your update, see the post titled 'update reminders', below.

  • Advice. This can be in response to a request for advice or just something that you think could be generally useful for many people here.

  • Encouragement. Probably best directed at specific users, but if you feel like just encouraging people in general I don't think anyone is going to object. I don't think I really need to say this, but just to be clear; encouragement should have a generally positive tone and not shame people (if people feel that shame might be an effective tool for motivating people, please discuss this so we can form a group consensus on how to use it rather than just trying it).

3
Jump in the discussion.

No email address required.

In 2019 the us median numbers were around:

  • Salary for a new graduate: 51k
  • Rent payment: 1,100
  • House price: 258k

In 2023 the us median numbers were around:

  • Salary for a new graduate: 56k
  • Rent payment: 1,400
  • House price: 420k

Since 1/1/20 the S&P 500 has increased by at least 67%. If someone owned a house before March 2022 they were able to lock in a 30-year mortgage rate around 3% (vs. around 7% today). People with wealth had huge gains in the last 4 years and those gains will continue to generate more passive wealth in the future.

A new grad isn’t going to be able to save/invest much. Meanwhile, the people with extraordinary returns in the last 4 years are generating tons of passive wealth because they locked in a low mortgage expense and have more money to invest/save. They are also earning passive income faster now because they have a larger asset base.

When inflation is normal for long periods of time and mortgage rates are similar between new/existing homeowners this wealth disparity effect is much less of a problem.

For a new grad starting around $0 (or in debt) to build substantial wealth they need to be on a path to earn much more than the median salary and/or make sacrifices to greatly lower expenses (like living with their parents for a few years after college).