Frustrated with Bigger Pocket Posts
Hello, I'm a newbie and this is my first post on Bigger Pockets although I have lurked here for several years. While I have been able to find invaluable information on this site, I find many of the posts (especially in the newsletters) to be frustrating because they sound a bit like internet marketing/motivational speak with little realistic or actionable advice although they are supposedly targeted towards young professionals. They tend to underestimate costs/skills needed/and timelines that many people have.
For example, my husband and I are a young professional couple in our mid-twenties. Many of the articles directed at our age group fail to address the following:
- many young people out of college do not have high incomes (median net compensation for individuals in 2013 is about $28k per year) http://www.ssa.gov/oact/cola/central.html; http://time.com/money/3829776/heres-what-the-avera...
- record high student loan debt (average amount of debt for individuals is $26,500 for 2011 graduates) http://www.nytimes.com/2012/10/18/education/report...
- most people are married and/or have children by age 30 (http://www.huffingtonpost.com/2013/11/22/marriage-... http://www.cdc.gov/nchs/data/databriefs/db19.htm; http://www.cdc.gov/nchs/fastats/births.htm; http://www.infoplease.com/spot/momcensus1.html)
- The median American household owes $3,300 of consumer debt (http://www.nerdwallet.com/blog/credit-card-data/av...)
- if you do have a professional job you will probably have to purchase a professional wardrobe (in our case we needed new clothes that were appropriate for cold winters)
- you will probably have to move to where jobs/graduate programs are (moving costs plus potential increase in the COL; see note on buying winter wardrobe)
- increasing rents (http://www.deptofnumbers.com/rent/us/)
-record high prices for cars (http://www.usatoday.com/story/money/cars/2013/09/0...) average price is $31k for new car and slightly used cars are only a few thousand dollars less); most households in the US need at least one car and if you were lucky enough to have one in high school it is probably starting to get old and have expensive maintenance issues by the time you are a young professional.
-record number of people in graduate school (http://www.census.gov/hhes/socdemo/education/data/...) poverty level pay and long hours that discourage people from working a second job during this time
- housing is expensive (down payment plus transaction costs- why do so many posts fail to go into detail about these? My husband and I wanted to purchase the condo we are renting- at a modest price- but the transaction costs doubled the cost of purchasing and we would have only saved $180 per month over the cost of renting. We decided it was better to pay down debt and move to a better location in a couple of years.)
- house hacking; there are not likely very many multi-family units in many towns and if there are they are probably expensive and in undesirable/dangerous parts of town
I am not trying to discredit the usefulness of this site or of investing in real estate. But many of the posts I have read come down to: either the OP majored in a related field in college and worked with other professionals shortly thereafter, had a much higher than average income starting out of college, or had their parents pay for college/weddings/ first mortgages, or the OP is not really young and is already a professional who is looking back at what they wish they did when they were younger (when they had no networks or money).
I think more accurate advice for 20 somethings would be:
- work on increasing your knowledge and income (try to find and fill your skill deficits so that you can be useful to others in the industry and make money; here is something that might be useful: http://www.slate.com/articles/podcasts/negotiation...)
- work on your people and organizational skills
- get your personal finances in shape
- set a realistic time frame for investing (it might take several years to be ready)
- work on getting your SO on board
- build a network of colleagues that you can call on later
- don't buy stupid motivational business books to learn, buy books that focus on specific skills and that have case studies
OR
- have access to specialized knowledge. a large amount of capital, and a professional network, already
- have access to people with those things
Many people go through seismic changes in their lives during their twenties that are not accounted for in these posts. The over simplistic messages I think overshadow the usefulness of the posts. Young professionals don