[quote=AN] . . . Just for fun, I ran the scenario I just described above but use today’s housing price instead. Lets assume you have 2 houses that averages out to be $350k/house. If price goes up 3.5x, those two houses will be worth ~$2.45M. If you then put that in a 30 years CD making 15%, that $2.45M will be at $162M after 30 years. Man, old folks seems have all the luck. Hopefully us Gen X/Y will get to see some of that luck someday soon.[/quote]
AN, most “old folks” ahem (if you mean boomers), were likely raising families in 1980 (like you are now). They couldn’t sell their home to buy bonds because they (and their families) were living in it. Very few owned rental homes as well, and if they did, they had mortgages on them and so had little profit to spare every month which had to be saved for vacancies and repairs. And many of the WWII Gen and Greatest Gen before them who WERE invested in these high-interest bonds (because their homes were paid off) had to LIVE OFF of their bond income and pay for board and care, nursing homes and even hospice with it. Medical insurance plans back then did not cover such things and SS payments and even government pensions were nowhere near what they are today.
Your “pie-in-the-sky” scenario likely only applied to a few of the “rich” at the time … who had perfect timing. It did not generally apply to joe6p..
Due to changes in labor law over the last 2-3 decades and greater access to money for higher education, more of your generation (Gen Y?) has FAR greater earning power and FAR better working conditions than ANY generation before it. The reason why most of your brethren don’t have as many assets at the same age as your predecessors did is because your generation (and to a large extent, Gen X) has a much higher expectation of standard of living than boomers did and so most of you spend your money every month to achieve that instead of save it. Many, many Gen Y are saddled with higher-interest student loans, as well, so that “greater access to money for higher education” has proven to be a two-edged sword for many :-0
