More Millennial households in the US are in poverty

[bhobba]

The trend of delaying adulthood is real and predates millenials, so it cannot be blamed entirely on the recession. I'm 42 and I've seen friends/acquaintences in my age bracket make immature/selfish/passive life choices in their 20s and 30s that likely would have horrified Boomers.

That raises an interesting question - when does someone become an adult. That however requires its own thread.

The only comment I will make here is where I live in Aus many many moons ago someone noticed a disparity - you could be drafted and die for your country at 18 but not vote for it. So what did they do - lowered the voting age to 18. I remember thinking at the time (I was only 18 or so myself and knew I was immature) its likely better to raise both conscription age and voting to 25 - but politicians I think find conscription in general a touchy subject. Australian culture is very much against conscription, and it was written in our Constitution its not allowed. A referendum was needed. One was held and was soundly defeated. I still never understood how it became possible - some legal eagle in Australian law needs to explain that one - I have no idea. But anyway a volunteer army is always more effective so don't understand its need and never will. No country has ever lacked sufficient volunteers when and if the need arises. My 'feeling' for what its worth is politicians want it because the public can too easily see through BS when its their own life on the line so are scared like crazy if it comes to war they will be found out for what they so often do - do it for political reasons - not actual necessity. But this is getting off topic and needs its own thread.

Thanks
Bill

 

[bhobba]

Situations like this one are what turned me into a radical centrist.

You too?

I was once just slightly to the left of Atilla The Hun - Ayn Rand was my hero (until I saw through her errors - which actually isn't that easy - she has persuasive arguments - but her downfall is - as pointed out by her once disciple - Nathaniel Branden - she came to believe she was 'infallible' and others were automatically wrong - at least that's his view anyway and I tend to agree with it - very very anti-scientific) - but life experiences change all sorts of things and I now know things are not quite as simple as the left or right sometimes portray it. Nearly every issue is very nuanced. That's one reason I am enjoying this thread .

Thanks
Bill

 

[bhobba]

For non millenials- did any of you get financial/life guidance in a formal setting such as in high school? I ask because it seems like people haven't the slightest clue on any form of fiscal discipline or responsibility. I wonder if having a mandatory class in high school would help this in a similar way that Sex Ed class informs students on STDs and pregnancy.

No - got nothing.

But I did trade shares on the side for a while - that is a very financially illuminating experience. Don't do it now - I saw too much 'light' - although I still subscribe to a newsletter on a certain trading method based on momentum simply out of interest.

The only financial book I trust after that experience is one very old and out of print by a guy called Austin Donnerly:
https://www.fishpond.com.au/Books/Sensible-Share-Investing-Austin-Donnelly/9781875857159

It works on a very well known scientific principle - regression to the mean - in investing circles sometimes called contrarian investing. Buy when people are scared and selling like crazy - sell when they are buying everything is sight. How to you determine which is which - simple run a line of linear regression through the market index - if its way below the mean - buy - way above - sell. Actually you do it in stages - a bit below - buy a bit more - a lot below - buy a lot more and conversely. Above and below the line of regression is divided into zones for that purpose.

But I generally am in favor of financial literacy being a compulsory subject at HS. I remember a long discussion I had with a financial adviser on this very issue. His wife was a teacher and while he of course, like me, believed in the value of financial literacy - said, according to his wife, the curriculum is so crowded now its unlikely it could be fitted in without a howl from some sector or another- eg the foreign language enthusiasts who believe you need to study a foreign language all though HS.

Thanks
Bill

 

[opus]

Yeah that's nuts to me. I studied Spanish every year in high school, was required to take drivers ed, art, sex ed, and gym class. I think financial literacy is at least as important. The school system is a mess. But that's for another thread.

 

[russ_watters]

For non millenials- did any of you get financial/life guidance in a formal setting such as in high school? I ask because it seems like people haven't the slightest clue on any form of fiscal discipline or responsibility. I wonder if having a mandatory class in high school would help this in a similar way that Sex Ed class informs students on STDs and pregnancy.

No, I didn't and yes, I think it would help. Fortunately for me, my parents made an effort to teach me when I was a kid (doing my own taxes, them buying stock in my name and letting me pick, reading a bank statement, etc.). I knew of friends who were clueless about money in high school for whom it continued to be a problem later on. It's such a huge problem, I have no idea why an effort isn't made to do anything about it.

 

[Vanadium 50]

Because in an extreme case I can park the car, call the loaner and say "Come pick up your car, I am done with it."

In the US, if you do this, you still owe the money. It is true that subsidized student loans are not dischargable by bankruptcy. However, as a practical matter I don't think it matters: car loans and student loans have essentially the same default rate: 11% vs 10%,

and you have received two answers, and you have addressed neither.

How dare me! It's been literally hours! Don't I have anything better to do!

In any event, I think the more germane response was that nitsuj had an expectation that a particular college degree would entitle him to a given future income, and that didn't happen. There was a famous 2008 US News and World Report article claiming the Net Present Value of a college degree was - on average - $300,000. The key to that is - on average - as they say "your mileage my vary".

 

[WWGD]

In the US, if you do this, you still owe the money. It is true that subsidized student loans are not dischargable by bankruptcy. However, as a practical matter I don't think it matters: car loans and student loans have essentially the same default rate: 11% vs 10%,
How dare me! It's been literally hours! Don't I have anything better to do!

.

I thought you were including my post in your comment, and the same applied to me, i.e., it had only been hours. EDIT: There is the additional issue, to being able to benefit from the car right away --without having to wait some 4 years -- of the fact that the amount of energy needed to benefit from owning a car (e.g., oil changes, pumping gas, occasional wash ) is nothing in comparison to the amount of effort needed to obtain the degree: attending classes, studying, writing papers, etc.

 

[WWGD]

<Snip> I have no idea why an effort isn't made to do anything about it.

It is being made, but not fast enough nor with enough resources. Some institutions ( schools, here) are both more resistant to change and slower to adapt. I was stating in another post that I worked for an organization one of whose goals was precisely that, but it was a bootstrap operation. I enjoyed working towards goals like this one , but at the end the boss was too much of a #$% and I quit.( Worse of all, when changes do happen, they are often the wrong ones, like adopting PCs in classrooms, whose benefits have not materialized; there is something to having to write things down, visualize them on your own, instead of doing an online search. At least at this age and developmental level.). This is one of the essential problems nowadays, when the rate of change outpaces the ability of existing institutions to adapt. Check out, e.g., Future Schock, presciently written in 1970 by Alvin Toffler ( who , sadly, died in 2016). Interestingly, to tie all topics here together, I wrote a paper on this book in college (1990s)

 

[WWGD]

No - got nothing.

But I did trade shares on the side for a while - that is a very financially illuminating experience. Don't do it now - I saw too much 'light' - although I still subscribe to a newsletter on a certain trading method based on momentum simply out of interest.

The only financial book I trust after that experience is one very old and out of print by a guy called Austin Donnerly:
https://www.fishpond.com.au/Books/Sensible-Share-Investing-Austin-Donnelly/9781875857159

It works on a very well known scientific principle - regression to the mean - in investing circles sometimes called contrarian investing. Buy when people are scared and selling like crazy - sell when they are buying everything is sight. How to you determine which is which - simple run a line of linear regression through the market index - if its way below the mean - buy - way above - sell. Actually you do it in stages - a bit below - buy a bit more - a lot below - buy a lot more and conversely. Above and below the line of regression is divided into zones for that purpose.
Thanks
Bill

There are other techniques, AFAIK, like knowbots using ML ( Sentiment Analysis ) going over blogs , counting and weighing key words denoting "Irrational Exuberance" , Panic , or in-betweens ( Not as many opportunities).

 

[WWGD]

I

In any event, I think the more germane response was that nitsuj had an expectation that a particular college degree would entitle him to a given future income, and that didn't happen. There was a famous 2008 US News and World Report article claiming the Net Present Value of a college degree was - on average - $300,000. The key to that is - on average - as they say "your mileage my vary".

https://duckduckgo.com/?q=flaw+of+averages+definition&t=hf&atb=v88-7&ia=web

There is a book by this actual name. It details cases where considering only the average value created problems, like the case of expeditions to the Arctic circle who chose to take a certain number of coats to their expeditions based on the average duration of a coat. No consideration for spread, nor for which type of error : too many or too few, would be worse in that case :https://www.amazon.com/dp/0471381977/?tag=pfamazon01-20

 

[nitsuj]

nitsuj had an expectation that a particular college degree would entitle him to a given future income, and that didn't happen.

lol entitle me to a given future income? Err no, that's not education. that's experience. google the definition of entitled...your suggestive comment doesn't even make sense.

What's more it has "happened", after an amount of time that experience is the increase in my pay; thought that point was clear. It didn't get me in at a higher pay tier.

I didn't say i was entitled to anything, I implied I wasn't treated as fairly as a business entity. And that experience improves income over time.

Education slots one into an income level after grad...accounting diploma low end start salary not enough to pay monies loaned.

I do feel entitled to be treated the same as a business entity with respect to such a loan. In which case loaning me the money in the first place probably wouldn't have happened or to mitigate loaner risk be guided towards a less risky/more profitable endeavor by a "professional", either way... win win

 

[nitsuj]

It is true that subsidized student loans are not dischargable by bankruptcy. However, as a practical matter I don't think it matters: car loans and student loans have essentially the same default rate: 11% vs 10%,

When it goes to "default" its with respect to the loan agreement which means it can go to court and the law (a judge decides) what should become of the debt. In the case of a car, I can put it on the bankruptcy list and have the debt extinguished. That cannot be done with a student loan, the loan still exists and is owed and has defaulted...in such a case the judge is to permise income source deductions / bank withdrawals. However it's my understanding while strict do consider circumstances, particularly for health/disability reasons.

By law one who is not employed cannot be "sued" for the student loan.
Ontario, CAN laws.

The likeness of the default rates tells me my argument is legitimate. Student loan debtors are not simply deciding they don't want to repay, they want to repay the debt equally to car loan debtors who can extinguish the debt through bankruptcy.

 

[ModusPwnd]

The average student loan is $30,000. The average new car loan is also about $30,000 (and there are many more of them, even when restricted to 18-34s). Why is the former a crisis, but the latter not?

Some differences. Witha car loan one is actually vetted to some extent to make sure they can likley pay it back. My student loans came with no means to pay them back, just hopes and dreams. A car can be sold and your debt lowered or even erased. I can't sell my education for pennies on the dollar to reduce my debt.

But in the end, in my household, a 30k car loan would be a crisis. My student loans easily go into deferment and income based repayment. A car loan does not. Student loans are holding my family down. A car loan would crush us.

 

[russ_watters]

Thread closed. Rebooting here:
https://www.physicsforums.com/threa...lds-in-poverty-re-launched-discussion.936791/