Editor: Crass Cash
For those of you who haven't heard of the "latte factor", it's the idea that a lot of small expenses add up to large amounts over time. For instance you can fund your retirement with the simple restraint of not buying that cup of latte at Starbucks each day. I pick on Starbucks and lattes, but in reality it can be any small amount that you buy on a daily basis.
Once again this is under attack by the same old tired person. In a yahoo finance article she says, somewhat justified in my opinion, that the real culprit is the basic necessities of life more specifically housing, education, and healthcare. I agree with the healthcare part, especially now that Obamacare has kicked in. I've personally seen mine rise by 20% in 9 months and it's going to go up by 50% in another 14 months. Somewhat about that will have to be done. I never thought I'd pine for the days of only 9% increases every year...
The other issues are still your fault though. There's no reason why you can't control the cost your housing or education. Americans are living in entirely too big of homes. They've doubled in size in one generation, all the while fewer people are living under the same roof. I've talked about this extensively and Americans need to downsize. Quickly! Why do we do this? It's do the idiotic incentives thrown at us from Washington. We can completely resist this, but they definitely don't try to help us. Instead we're given the incentive to keep trading up and to also pile on more and more mortgage debt. As a result Americans have used their homes as tax advantaged piggy banks. And also don't forget about the $250k and $500k (if married) tax exemption you get for you home. With these types of incentives who wouldn't want to live in the biggest and most expensive home possible in order to take advantage of the leverage??
Yes education is expensive and it's becoming more expensive. Again this is a situation where you don't have to participate in and where the govt is creating artificial demand, thus driving up prices. By giving anybody and everybody who qualifies money to go to college this drives up the quantity demanded and in return the prices for education. We have college graduates who can't find jobs and at the same time service technicians who can't find enough qualified people. The idea that everybody in this country needs to be a college grad so that they can type on a keyboard all day is absolute batshit crazy! It's a huge loss of resources. When my father graduated from college around 8% of the workforce was a college grad. Now it's above 25% and going to 30% in a hurry.
Having junior go to a small private school in the Carolinas to major in philosophy so that he can serve the engineer lattes when he graduates is not the answer. Oh and btw, he's going to graduate with $50k in debt, thus succumbing to a lifetime of indentured servitude. I'm being sarcastic, but that seems to be the mentality of most recent grads today.
So what's the conclusion? All things matter, even the lattes. Live in a house that suites your needs, not one that gives you the best tax advantage. If your child is smart than send them to a public school to major in something that they can actually get a job when they graduate. Pay cash for your car and drive it for 10 years. Brew your coffee at home, eat at home, cancel your cable, and reduce your cellphone bill. I promise life won't come to an end. You'll actually probably be happier.
Once again this is under attack by the same old tired person. In a yahoo finance article she says, somewhat justified in my opinion, that the real culprit is the basic necessities of life more specifically housing, education, and healthcare. I agree with the healthcare part, especially now that Obamacare has kicked in. I've personally seen mine rise by 20% in 9 months and it's going to go up by 50% in another 14 months. Somewhat about that will have to be done. I never thought I'd pine for the days of only 9% increases every year...
The other issues are still your fault though. There's no reason why you can't control the cost your housing or education. Americans are living in entirely too big of homes. They've doubled in size in one generation, all the while fewer people are living under the same roof. I've talked about this extensively and Americans need to downsize. Quickly! Why do we do this? It's do the idiotic incentives thrown at us from Washington. We can completely resist this, but they definitely don't try to help us. Instead we're given the incentive to keep trading up and to also pile on more and more mortgage debt. As a result Americans have used their homes as tax advantaged piggy banks. And also don't forget about the $250k and $500k (if married) tax exemption you get for you home. With these types of incentives who wouldn't want to live in the biggest and most expensive home possible in order to take advantage of the leverage??
Yes education is expensive and it's becoming more expensive. Again this is a situation where you don't have to participate in and where the govt is creating artificial demand, thus driving up prices. By giving anybody and everybody who qualifies money to go to college this drives up the quantity demanded and in return the prices for education. We have college graduates who can't find jobs and at the same time service technicians who can't find enough qualified people. The idea that everybody in this country needs to be a college grad so that they can type on a keyboard all day is absolute batshit crazy! It's a huge loss of resources. When my father graduated from college around 8% of the workforce was a college grad. Now it's above 25% and going to 30% in a hurry.
Having junior go to a small private school in the Carolinas to major in philosophy so that he can serve the engineer lattes when he graduates is not the answer. Oh and btw, he's going to graduate with $50k in debt, thus succumbing to a lifetime of indentured servitude. I'm being sarcastic, but that seems to be the mentality of most recent grads today.
So what's the conclusion? All things matter, even the lattes. Live in a house that suites your needs, not one that gives you the best tax advantage. If your child is smart than send them to a public school to major in something that they can actually get a job when they graduate. Pay cash for your car and drive it for 10 years. Brew your coffee at home, eat at home, cancel your cable, and reduce your cellphone bill. I promise life won't come to an end. You'll actually probably be happier.
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