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WaterDR · 02-27-2008, 09:59 PM

Great questions.....I think about it a lot.....

First off, you can't look at the past few years and predict the future. The economy and housing costs is cyclical. We have had a complete role reversal with Canada the past few years. They are now laughing at us as their economy is booming. They were in the tanker a few years ago.

I feel bad for folks in their 20's these days. First off, jobs don't pay shit. I will give you an example. My first job after graduating college and leaving the Navy (4 years) paid $65k the first year (that was in 1994). I had total benefits....paid for nothing and bought my first house when I was 25. It was a 2500 square foot, 3 year old house. I had no help from parents.....none. The house was $150k.

How many of you guys at that age now can say that? Most of you live at home with parents and many of you will for a long time because you are in debt up to your asses in college loans, houses are expensive, and medical insurance is high. It is REALLY hard to get started these days.

The average college student graduates $45k in debt now and I bet starting salaries have not hardly risen at all since 1994. In fact, adjusted for inflation and other costs, they have most likely decreased.

The housing market is simply adjusting from years of people borrowing against them to pay for life styles that they should not be living in the first place. Newsflash....if any of you have a car loan more then 5% of your gross income, your are way too much in debt for a car. These are not my rules, but from financial planning experts.

Houses have decreased, but there are some signs that some areas have improved. I own a second house near Mystic, CT. It appraised for $20k more last month then it did 2 years prior AND appraisers are now more conservative.

Some of you may be now upside down on your house.....so what? So long as you can pay the mortgage, continue paying it. You have to live somewhere, just like you need to drive a car. Sooner or later, things will come back....first slowly, then this will all seem like a distant memory.

There is one saving grace. There is a major labor shortage looming on the horizon. I just had a meeting with our CEO today. We are a $5 Billion in annual sales and the company has identified one of our biggest challenges to meeting our future growth requirements as manning.

The experts are predicting that labor shortages will ultimately drive labor costs up especially in certain job classifications. This will actually create situations where some women will leave the workforce because their husbands now make enough, creating even a bigger problem.

The way the situation gets resolved is:

1 - Outsource overseas
2 - Automation
3 - Flexible workplaces

All three factors will and already are taking place.

All in all, I remain hopefully optimistic, but I think the next few years won't be our best.

My 401k is down 8.5% this year. Not good, but far from a crisis. Let's hope it stays that way.

02-27-2008, 09:59 PM	#2 (permalink)
WaterDR Administrator Join Date: Sep 2004 Posts: 6,363	Great questions.....I think about it a lot..... First off, you can't look at the past few years and predict the future. The economy and housing costs is cyclical. We have had a complete role reversal with Canada the past few years. They are now laughing at us as their economy is booming. They were in the tanker a few years ago. I feel bad for folks in their 20's these days. First off, jobs don't pay shit. I will give you an example. My first job after graduating college and leaving the Navy (4 years) paid $65k the first year (that was in 1994). I had total benefits....paid for nothing and bought my first house when I was 25. It was a 2500 square foot, 3 year old house. I had no help from parents.....none. The house was $150k. How many of you guys at that age now can say that? Most of you live at home with parents and many of you will for a long time because you are in debt up to your asses in college loans, houses are expensive, and medical insurance is high. It is REALLY hard to get started these days. The average college student graduates $45k in debt now and I bet starting salaries have not hardly risen at all since 1994. In fact, adjusted for inflation and other costs, they have most likely decreased. The housing market is simply adjusting from years of people borrowing against them to pay for life styles that they should not be living in the first place. Newsflash....if any of you have a car loan more then 5% of your gross income, your are way too much in debt for a car. These are not my rules, but from financial planning experts. Houses have decreased, but there are some signs that some areas have improved. I own a second house near Mystic, CT. It appraised for $20k more last month then it did 2 years prior AND appraisers are now more conservative. Some of you may be now upside down on your house.....so what? So long as you can pay the mortgage, continue paying it. You have to live somewhere, just like you need to drive a car. Sooner or later, things will come back....first slowly, then this will all seem like a distant memory. There is one saving grace. There is a major labor shortage looming on the horizon. I just had a meeting with our CEO today. We are a $5 Billion in annual sales and the company has identified one of our biggest challenges to meeting our future growth requirements as manning. The experts are predicting that labor shortages will ultimately drive labor costs up especially in certain job classifications. This will actually create situations where some women will leave the workforce because their husbands now make enough, creating even a bigger problem. The way the situation gets resolved is: 1 - Outsource overseas 2 - Automation 3 - Flexible workplaces All three factors will and already are taking place. All in all, I remain hopefully optimistic, but I think the next few years won't be our best. My 401k is down 8.5% this year. Not good, but far from a crisis. Let's hope it stays that way. __________________ Black 2000 GT Vert: Novi-2000 with Intercooler (375rwhp @ 9 psi); Tune by Kauffmans; Roush 380R Body kit; Steeda Subframes; Steeda Strut Tower Support; Deep Dish Bullets; FRPP 4:10's; SCT 4 Position Chip with four custom tunes; Steeda CAI; C&L Pleum; BBK 75 TB; SLP Loudmouth; SLP Catted X-Pipe; Bullitt Suspension; UPR Conrol Arms; Focus Fuel Pump My Car My Email