Sad State of Affairs

[blazerboy30]

And the GDP per capita has grown as well. Are we just stating facts now? Are you ever a polite individual?

It came across that you were implying that minimum wage workers are worse off now than they used to be due to inflation outpacing minimum wage. I apologize if that isn't what you were implying.

 

[blazerboy30]

I don't see how you can raise kids today making under $200k a year. its just insane!

Well, that isn't true. I live in perhaps the most expensive area in the country. While it is expensive, you don't HAVE to make $200k to raise a kid in the area.

 

[Ed O]

Why is college so expensive now? That's not a loaded question. I just don't see how it could cost so much.

Now, with less loaded perspective: It seems that the influx of cheap money into the system has driven up the price of post-secondary schooling. If the focus remains on "affordable education" and the solution continues to be to easier access to student loans... it seems like it's a bad bet for individuals (who get burdened with debt) and for society (which needs to pay for the inevitable defaults).

I was six figures in the hole at one point, between undergrad, law and business schools... and I'm still chipping away after being out of undergrad for almost twenty years. I've made the choice not to have kids and I sold my house before the bottom dropped out. I have an established career, at least, so I have hope that it'll be done soon. The kind of debts that some kids nowadays exit undergrad with... *shiver*

Ed O.

 

[Eastoff]

Why is college so expensive now? That's not a loaded question. I just don't see how it could cost so much.

Now, with less loaded perspective: It seems that the influx of cheap money into the system has driven up the price of post-secondary schooling. If the focus remains on "affordable education" and the solution continues to be to easier access to student loans... it seems like it's a bad bet for individuals (who get burdened with debt) and for society (which needs to pay for the inevitable defaults).

I was six figures in the hole at one point, between undergrad, law and business schools... and I'm still chipping away after being out of undergrad for almost twenty years. I've made the choice not to have kids and I sold my house before the bottom dropped out. I have an established career, at least, so I have hope that it'll be done soon. The kind of debts that some kids nowadays exit undergrad with... *shiver*

Ed O.

I believe a lot of federal subsidies and state subsidies have been cut.

 

[BLAZER PROPHET]

This probably isn't what you want to hear, but if the loans have been racked up on private schools, why is it that something needs to change? Especially at the political level? Having your kids attend a private school is a choice you and your family made. And now that the bills are real is when it hits home that private college is extremely expensive? You live in Portland. What's wrong with attending OSU or UofO to get in-state tuition and applying for the many, many scholarships that go unused?

I get what you're saying and I don't disagree. My point was that ALL tuition is going up at rates that just don't make sense.

 

[BLAZINGGIANTS]

well, in LA a reasonable house in a safe neighborhood is over a million dollars. in Portland, yeah, you don't need that much you can get a nice house for $200k but not here. and unless you live in like a handful of school districts, you HAVE to send your kids to private school. the public schools here are horrendous.

That's a slight exaggeration on the $1 million. Maybe during the boom. But I have several family members who live in nice (nothing fancy schmancy, but still quite lovely) homes in safe neighborhoods in LA. Of course, a lot of what I've seen in LA..... you can have a great 5-6 block radius.... And then a very scary one butting up against it..... and then another great 5-6 block radius... and then another shit hole. I'm sure the shit spills into the nicer blocks at times.

As for the schools.... yes, LA public schools are quite shitty. Sadly, a lot of Oregon schools are going downhill - that's why I have chosen to live in a quiet suburb with one of the best public school districts in OR.

 

[BLAZINGGIANTS]

This probably isn't what you want to hear, but if the loans have been racked up on private schools, why is it that something needs to change? Especially at the political level? Having your kids attend a private school is a choice you and your family made. And now that the bills are real is when it hits home that private college is extremely expensive? You live in Portland. What's wrong with attending OSU or UofO to get in-state tuition and applying for the many, many scholarships that go unused?

Don't forget PSU! Not that you were dissing PSU by omitting from your list, but PSU has some very well-known and respected programs and is conveniently located within the metro area (so one could commute, whether living with parents or renting a place in the burbs). I chose PSU because there were more reasonable jobs and other opportunities than the other in-state schools offered, and I would have spent my entire days partying away in those tiny towns (as it was, I only spent 90% of my time partying). They've done a lot to draw more of the "typical" college crowd in recent years, so depending on what one studies, he or she should definitely consider a place like PSU. Granted, I've been out of school for 7 years now, but I left with a positive college experience, a good degree, a good job, and most importantly, not a ton of debt.

 

[blazerboy30]

I get what you're saying and I don't disagree. My point was that ALL tuition is going up at rates that just don't make sense.

It does seem as though even in-state tuition is rising at too high of a rate. I agree with Ed O, that it is likely due to the amount of free money flowing into the system due to the loan system.

 

[EL PRESIDENTE]

Well, that isn't true. I live in perhaps the most expensive area in the country. While it is expensive, you don't HAVE to make $200k to raise a kid in the area.

How much is a "decent" house in your area. $700-900k? You should probably be making around $200k to buy a house at that level. Then to provide for a wife and two kids and savings?

 

[EL PRESIDENTE]

That's a slight exaggeration on the $1 million. Maybe during the boom. But I have several family members who live in nice (nothing fancy schmancy, but still quite lovely) homes in safe neighborhoods in LA. Of course, a lot of what I've seen in LA..... you can have a great 5-6 block radius.... And then a very scary one butting up against it..... and then another great 5-6 block radius... and then another shit hole. I'm sure the shit spills into the nicer blocks at times.

As for the schools.... yes, LA public schools are quite shitty. Sadly, a lot of Oregon schools are going downhill - that's why I have chosen to live in a quiet suburb with one of the best public school districts in OR.

bulletin: the good houses didn't get affected that much by the real estate bust. There is no boom in desirable areas that can't be built out. In Orange County, sure...but in LA, if you want to live on the westside, its 500-700k for a starter house.

 

[jlprk]

The real question is already the theme of this entire board--how do we get at Denny's money?

Meanwhile, if you have a truckload of hard rock candy delivered to your house, it only costs a penny per piece.

 

[BLAZER PROPHET]

The real question is already the theme of this entire board--how do we get at Denny's money?

Meanwhile, if you have a truckload of hard rock candy delivered to your house, it only costs a penny per piece.

Not that's putting things in proper perspective!

 

[jlprk]

Yesterday I saw a bumper sticker, "A man is not a financial plan."

I'll pay off my $100,000 college loans in my 20s. In my 30s I'll save $500,000 for a house. In my 40s I'll save $200,000 for my kids' college. In my 50s I'll save $500,000 for my retirement. I'll retire early at 60 and travel around the world. Then I'll die and--forgot to save for the funeral. Well those little brats can pay for something.

You know what caused this? The minimum wage is too high. Why do we have to subsidize the poor people?

 

[BLAZINGGIANTS]

bulletin: the good houses didn't get affected that much by the real estate bust. There is no boom in desirable areas that can't be built out. In Orange County, sure...but in LA, if you want to live on the westside, its 500-700k for a starter house.

You'd be shocked, then. Having several family members that work in the mortgage industry, they re-fi'd all our friends and family down there, and/or helped with financing a new purchase, none of which appraised for, or cost, more than $1million (which is what you said you need to find a reasonable house in a safe neighborhood). All of the houses are at least 1400 sq. ft. (but most closer to between 1600 and 2000 sq ft.). Maybe it's all semantics, and what not.... And I'm not sure what type of house you're talking about, or how you classify "starter" homes, and I don't know everything about SoCal, but there are some nice houses in safe LA neighborhoods to be had for under a $1million.

 

[EL PRESIDENTE]

You'd be shocked, then. Having several family members that work in the mortgage industry, they re-fi'd all our friends and family down there, and/or helped with financing a new purchase, none of which appraised for, or cost, more than $1million (which is what you said you need to find a reasonable house in a safe neighborhood). All of the houses are at least 1400 sq. ft. (but most closer to between 1600 and 2000 sq ft.). Maybe it's all semantics, and what not.... And I'm not sure what type of house you're talking about, or how you classify "starter" homes, and I don't know everything about SoCal, but there are some nice houses in safe LA neighborhoods to be had for under a $1million.

Maybe in the *shrug* Valley.....

 

[EL PRESIDENTE]

only house between 500-700k for sale in my city on Realtor.com.

http://www.realtor.com/realestatean...rldom-Ave_Playa-Del-Rey_CA_90293_M18070-49049

:MARIS61:

 

[BLAZINGGIANTS]

Maybe in the *shrug* Valley.....

My cousin's house is close to LAX (and an extremely quick drive to Manhattan Beach). Not the best neighborhood, but not bad at all (it looks more like an older SE PDX neighborhood), but I've never had any issues all while staying there and I know my cousin hasn't had any issues or heard anything bad from his neighbors. It's a nice house on a quiet street, hard woods throughout. I know they did some basic remodeling in the house after purchase, but they probably paid $650-700K. Not trying to oversimplify, but I do know that (3 years ago) when the market was down, some of those neighborhoods dropped pretty significantly in price (like anywhere else).

 

[EL PRESIDENTE]

How much do you think a family should bring in with two children and two parents in order to comfortably afford a $650k house?

 

[blazerboy30]

How much is a "decent" house in your area. $700-900k? You should probably be making around $200k to buy a house at that level. Then to provide for a wife and two kids and savings?

You can't get a house in Palo Alto for less than $1M. Perhaps you have a different idea of getting by and raising kids that most do. Most families have to rent places, but they can raise kids on less than $200k.

 

[EL PRESIDENTE]

You can't get a house in Palo Alto for less than $1M. Perhaps you have a different idea of getting by and raising kids that most do. Most families have to rent places, but they can raise kids on less than $200k.

I'd imagine renting for a family of four would be, at a minimum $2500 a month (3 bedroom apartment). Sure, you can also feed children cup of noodles every night too I suppose and shop at goodwill for all their clothes.

I'm talking 2 cars, 3 bedrooms, eat decently and healthy and put away money for college and save, entertain and stay debt free. In Palo Alto, its very hard to do for $200k a year, which is why people there make so much.

 

[RR7]

That seems to be a huge leap from

I don't see how you can raise kids today making under $200k a year.

to 2 cars, 3 bedroom house, eating well and saving for college also. I would say MOST people aren't raised that way. Lots of families need to cut costs where they can when they have kids, whether it's not eating as nice, not as much on entertainment, stretching out cars until they die, renting versus owning, etc.

 

[EL PRESIDENTE]

hence the "sad state of affairs".

 

[RR7]

hence the "sad state of affairs".

it's just completely off from your original statement, from just raising kids under that amount to having a perfect life. Yeah, nobody can own a million dollar home, send their kids to private school, eat filets every night with a 50 dollar bottle of wine, vacation for 3 weeks in Europe every summer, and only make 200K

 

[EL PRESIDENTE]

its not a perfect life. its just one where you can pay for where you live, afford what you buy and want to buy, and save a little money. The "american dream".

Sure, in Oregon, $200k is a lot of money if you decide to live in the burbs, but out here in LA or in Palo Alto, its really not that much money at all.

But people were living on less than that and getting into massive debt, using their houses as ATMs, taking out strange mortgages and we are where we are.

 

[Denny Crane]

Geez. Palo Alto is one of the most elite neighborhoods in the country. You can buy a house in nice neighborhoods nearby, like Santa Clara or San Mateo for 1/3 the cost of a home in Palo Alto.

 

[blazerboy30]

I'd imagine renting for a family of four would be, at a minimum $2500 a month (3 bedroom apartment). Sure, you can also feed children cup of noodles every night too I suppose and shop at goodwill for all their clothes.

I'm talking 2 cars, 3 bedrooms, eat decently and healthy and put away money for college and save, entertain and stay debt free. In Palo Alto, its very hard to do for $200k a year, which is why people there make so much.

You're describing a scenario that really has never existed for most people in the country. So by saying people can't do it today, you really aren't making much of a point. I think you have some idea where parents will live the lifestyle you live... living in a hipster loft, eating out every night, spending money on drinks at the club several times a week, buying any new gadget you ever want, etc etc all while sending their kids to really expensive daycares, or hiring nannies. Do you really think our grandparents were brought up like that?

 

[blazerboy30]

Geez. Palo Alto is one of the most elite neighborhoods in the country. You can buy a house in nice neighborhoods nearby, like Santa Clara or San Mateo for 1/3 the cost of a home in Palo Alto.

Palo Alto is the center... everything gets cheaper as you move further north or south from there. But the demand for Palo Alto is unbelievable. They had no idea there was a housing market crash.

 

[donkiez]

School is fast becoming the next housing bubble. If you look at it, it has a lot of the same issues. Government guaranteed loans, little regulation and declining value in receiving an education. These kinds of issues reduce the free market approach to pricing and allow schools to price hike exponentially. Eventually the value of an education will be less than the cost and that point will be soon. One thing that keeps the bubble going is the Conventional wisdom that when times are hard you get more education to secure a better future. As the OP shows this is leading to highly educated servers and unemployed with ridiculous debt. To make matters worse even bankruptcy will not forgive student loans.

I've lived in New Zealand and Japan, and I’ve been to most of Europe and South America. In a lot of these countries not only is school free (or cheap) but you actually receive an allowance from the government for going to school and maintaining good grades. It may be a socialist attitude but at least they are investing in their future as a country, as we keep living off our past.

 

[BLAZER PROPHET]

School is fast becoming the next housing bubble. If you look at it, it has a lot of the same issues. Government guaranteed loans, little regulation and declining value in receiving an education. These kinds of issues reduce the free market approach to pricing and allow schools to price hike exponentially. Eventually the value of an education will be less than the cost and that point will be soon. One thing that keeps the bubble going is the Conventional wisdom that when times are hard you get more education to secure a better future. As the OP shows this is leading to highly educated servers and unemployed with ridiculous debt. To make matters worse even bankruptcy will not forgive student loans.

I've lived in New Zealand and Japan, and I’ve been to most of Europe and South America. In a lot of these countries not only is school free (or cheap) but you actually receive an allowance from the government for going to school and maintaining good grades. It may be a socialist attitude but at least they are investing in their future as a country, as we keep living off our past.

An excellent post.

I fully agree with the first paragraph. As to the second, sadly, we're in no position to do this given our sad state of affairs for a variety of reasons. Too much fraud, waste & abuse in the social services sector that sucks money away from things like education is just one of the problems.

 

[BLAZINGGIANTS]

its not a perfect life. its just one where you can pay for where you live, afford what you buy and want to buy, and save a little money. The "american dream".

Sure, in Oregon, $200k is a lot of money if you decide to live in the burbs, but out here in LA or in Palo Alto, its really not that much money at all.

But people were living on less than that and getting into massive debt, using their houses as ATMs, taking out strange mortgages and we are where we are.

$200K is a lot anywhere in Oregon, really. And people in Oregon were doing the same things (people everywhere were doing that), it's simply that the cost of living is higher in some places (and so are wages/salaries).