Comparing the cost of living from 2000 to 2020: Inflation is a lot higher than you think and your purchasing power is declining.
The cost of living in the US is getting more expensive and the way our banking system is setup, we are primed for continued inflation. Our major purchases are financed with debt and low interest rates so the true cost of many things in our lives are understated by the “monthly payment†mentality that many people live under. Yet there is a major catch since we are addicted to low interest rates and we really can’t go much lower so that silver bullet has now been maxed out. This impacts college tuition, housing prices, automobile costs, and practically all items that we utilize and purchase in our lives. Inflation catches up on you in a slow and sneaky way. Little by little you start to realize that your money isn’t going as far as it once did. We typically see reports showing that inflation is moving along nicely through the Consumer Price Index (CPI) but in reality, things are very much different. Let us compare the cost of living between 2000 and 2020.
Read MoreOne third of 18-34 year olds living at home with parents and student debt rages out of control to $1.6 trillion. Total US credit market debt at $74.5 trillion.
Young Americans are having a tough time in this economy when it comes to pursuing their own version of the American Dream. New data highlights that many young adults are still living with their parents deep into adulthood and this is largely being driven by economic reasons. This is all happening during a time when the stock market is at a record high, housing values are up, and the employment rate appears to be healthy. So what gives? What gives is that many young Americans while having work, are not making enough to save for a home and are stuck having to pay off a mountain of student loan debt. Student loan debt now sits at $1.53 trillion officially but this data is old and we are racing to $1.6 trillion. Young Americans are having a failure to launch moment because many are already carrying mini-mortgages before jumping out of the nest.
Read MoreThe growing gap in retirement savings: Half of American families have zero in retirement savings and most are worse off than they were in 2007.
While we have been on a strong bull market run since 2009, half of American families have nothing financially to show for it. The gap between the retirement ‘haves’ and ‘have-nots’ has grown since the recession ended. It is telling that half of American families have no retirement savings and many are going to rely on Social Security to get them by when they enter old age. Is this something we should worry about? I would argue that this is something that is incredibly important because being able to save and build up wealth is one way to establish a nest egg for old age. To build up a nest egg you need to have the ability to save money. The challenge is that many Americans are living paycheck to paycheck and don’t have the ability to put money aside.
Read MoreStudent debt hit a depressing amount now hovering at $1.5 trillion. Where do we go from here?
How much is a college education worth? This question seems to be growing in importance over the last decade as the cost of attending a university is getting out of reach for many. Going to college and getting an education seems to be part of the package deal when we think of the American Dream. However, the cost of attending college has gotten so expensive that Americans now find themselves in debt to the tune of $1.5 trillion in student debt. This is troubling on many fronts because young Americans are entering a market where housing prices are out of reach and the cost of living is simply outpacing any wage gains. Having a large student loan payment each month only makes it harder to build wealth and take the next step in being financially secure. There is something depressing about the $1.5 trillion figure because only a decade ago we were ag $600 billion – in other words, we’ve added nearly a trillion dollars in student debt since the iPhone hit the market.
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