A Socio economic discussion about boomers.

Back to boomers and the housing market…

Two anecdotes do not a trend make, but just in the last month 2 boomer friends are selling rather large, multi-level homes to move into much smaller, single floor ranch-style homes. “Less to maintain” is the prime motivation. I wonder if, over time, these large “McMansions“ will be a harder and harder sell to upcoming generations.
 
wilkersk said:
Hmm.... ===>>https://www.bls.gov/opub/mlr/cwc/co...ngs-of-the-baby-boomers-and-other-cohorts.pdf
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I like these comparative analyses; while they can point out some stark differences, I feel like a bit of reality and context is always missed.

The youngest cohorts will near always be worse off than the oldest cohorts simply because of math.

Let’s say a 22-year old is entirely debt free and just started job 1. That persona has a net worth of zero, and decides to fully fund an IRA in year 1. At the end of year one, that’s a net worth of about $6500. With no other investments (no IRA, no non-qualified accounts, no savings, no nothing but $6500/yr into an IRA). Monthly, that’s $541 per month.

Over the 43 years, the basis will be $260K put into this IRA and, even with a paltry average return of 7%, compound interest will turn the basis in somewhere between $1.1M and $1.5M.

At 22 though, it’s hard to he disciplined enough to do that, so let’s start the math at age 30. That returns between $625K and $883K in a basis of $227,500. The only variable in the numbers relates to traditional vs Roth IRA.

Knowledge is power, and that kind of knowledge isn’t making it’s way into the heads of most young adults, I dang sure know it didn’t make their way into my head until my late 20s, which is one reason we started open conversations around the topic when our kids still in elementary school, and y’all see how that played out in their ‘adulting’ since 2016.

It’s hard to be young, knowledgable, and disciplined, and I’m somewhat glad some employers automatically opt new employees in to 401Ks; I just wish they also educated those new EEs on the time value of money between just leaving those contributions as cash or company stock versus an S&P500 or total market index fund.
 
Half Fast said:
Any engineer who can’t figure out that math on his own should have his degree revoked and his IEEE membership rescinded.
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ALL engineers should understand the world doesn’t revolve around that discipline; EE is HR shorthand for employee. Without HR most of those engineers wouldn’t have jobs.
 
MarkH said:
That proves my point - it's 50k+.
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Unfortunately the OEMs have learned that people will pay whatever it costs to buy the truck they want. Supply and demand. If folks stop buying trucks, the price will fall.
 
Half Fast said:
Any engineer who can’t figure out that math on his own should have his degree revoked and his IEEE membership rescinded.
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No doubt, there are exceptions, but a lot of the new engineers I see don’t know how to change the tire on their car or change the oil. But they can do a really nice PowerPoint on how to do both tasks. They wouldn’t recognize a socket wrench if it bit them. Now get off my lawn.
 
MarkH said:
That proves my point - it's 50k+.

My first house was 27k and I bought it in 2015.
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You do understand Ford loses $35K+ per EV it produced in 2023, right? That’s to the tune of $4+ billion this year alone. Those losses have to he made up elsewhere and Ford will likely need a multi-year effort to figure out profitability for that segment since the demand point appears to be tied to a lower selling price than they’re getting for them today.

Add to that their new labor agreement will end up adding about $900 per production unit.

As for dealer stock, one of our local, average price Ford dealers has a dozen or more new F150s in the low $40s.

New Ford vehicles in New Braunfels, TX | Bluebonnet Ford

Search for new Ford cars, trucks and SUVs for sale at Bluebonnet Ford in New Braunfels, TX
www.bbmotors.com www.bbmotors.com

Not to burst your bubble, but a near-local Ram dealer has new Ram 1500 quad cabs in the low, mid, and high $30s, depending on RWD or 4WD.
 
TCABM said:
ALL engineers should understand the world doesn’t revolve around that discipline; EE is HR shorthand for employee. Without HR most of those engineers wouldn’t have jobs.
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Baloney.

There were EEs when “HR” was called “Personnel” and we were people instead of “human resources,” ranked alongside oil resources and mineral resources. Those dweebs in HR don’t get to appropriate our abbreviation. We were there first.

And it’s the other way around. Engineers create products. HR merely creates overhead. HR wouldn’t exist without productive employees like engineers, production workers, salesmen, etc.

And I’ve been putting the EE into GEEK since 1984.
 
FastEddieB said:
Back to boomers and the housing market…

Two anecdotes do not a trend make, but just in the last month 2 boomer friends are selling rather large, multi-level homes to move into much smaller, single floor ranch-style homes. “Less to maintain” is the prime motivation. I wonder if, over time, these large “McMansions“ will be a harder and harder sell to upcoming generations.
Click to expand...
I do remember during the 2008 housing recession, at least locally, it was the McMansions that sat without a buyer. The smaller homes moved relatively easily.
 
My wife and I are very fortunate to live a comfortable lifestyle in a HCOL area. Rent and housing prices are out of control. The people our age that have houses, bought several years ago when they were somewhat affordable. Now, for 650K, you get a fixer up-er in a terrible school school district. I feel for the people here. It’s tough and extremely unaffordable. Even apartments are ridiculous. $2000 for a small studio is typical. 2500-3000 for a 1 bed
 
Half Fast said:
Any engineer who can’t figure out that math on his own should have his degree revoked and his IEEE membership rescinded.
Click to expand...

It's not about the math, it's the maturity. I made all sorts of financial moves in my early to mid 20s that I wish I could take back, and it had nothing to do with a misunderstanding of the math. :p
 
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