All Forum Posts by: John Jabson

If our wages remain stagnant like they have in the last 30 years, we're not going to have a middle class in another few decades.

You're missing what I'm saying here...in 13 years I'll be making the equivalent of today's 60K. It might be 75 or 78, whatever it equals out to be. Therefore my standard of living will increase slightly, I think...

With that being the case, my SOL should increase?

In my case, my raises are about 3% per year but our salary structure changes every few years. For example, when I came out of college in 2004, our district paid 28-30K for starting. Now we pay about 34K for starting. That's clear that the salaries are going up in addition to the 3% raises per year. That, itself, is why my coworker, who has 20 years experience, makes 60K while I make 42K and thus has a higher wage and spending power than I do.

Now that I'm thinking about this, I still don't get it. I understand the concept that if your income increase per year does not exceed inflation per year then your SOL will not increase. I get that.

However, for example, here's my situation. I currently make 42K myself (I live in a depressed rural area). I have 7 years in the school system. In another 10 years I will have 17 years in the system and I"ll be making the equivalent of 55K (whatever that looks like in inflated dollars) So in 10 years I will be making more money at 17 years experience than somebody with 7 years experience. Doesn't that, by default, give me a higher standard of living (assuming I'm not increasing my expenses willingly)? If the answer is no, then by default, the person with 7 years experience would lose SOL in comparison to my 7 years in the year 2013. If that's the case, in 50 years all entry level jobs would make no money, at all. I don't understand this...

There has to be something to be said for decreasing expenses though too, right? My primary housing expense (principal and mortgage) is 26% of my total income. If you add 10% inflation it brings housing (P and M) expense to 22.5%. That's a few hundred dollars a month right there.

Housing is probably the only expense that works like that, but still.

Also-I would like to think I'll be better off in 10 years than I am now because I'm spending alot of money on a new furnace, cutting down trees close to my house that are dangerous, rewiring areas of my house that were previously dangerously wired. Maybe I'm living in rainbow land but maybe in 10 years I won't be spending money on that kind of stuff?

I have to make myself feel better here. I feel like I'm never going to get ahead on my teachers salary. That makes me a little saddened...

This is such a basic question, but I don't quite understand the basics of it.

If my income increases by 3.5% per year (that's my current raise per year per our contract) and inflation has been between 3-5% per year, how can my standard of living ever legitimately increase?

Obviously some people increase their standard of living as their career advances. I observe people who have gotten 3% raises throughout their life and they live better at age 50 than they did at age 30. There's the argument that they've paid off debt. Even with that being the case, if inflation is indeed 3-5% per year an electric bill in 2013 that is $100 will be close to $200 by 2030. So even while paying off debt, other expenses are increasing. How does anyone improve their SOL?

When I say SOL I am referring to more disposable income and less debt-income ratio, etc.

As usual, govt gets involved and screws things up for people. Thank you FEMA.

Supposedly the seller has a letter stating it's not in a flood zone. I'm investigating to find out whether or not that was done through FEMA. From what I understand FEMA changed their maps after Hurricane Katrina in 2005-06. This letter was done 2.5 years ago so I'm hoping it was done through FEMA and it will hopefully save me from paying for FI that I'm never going to use.

Is it possible to drop flood insurance after closing? I know that this property will never get flooded. Even in the 1972 flood the waters never came close. And they created a large dam that does not allow the water to get to 1972 levels. It's never going to happen.

Just wondering if you can get away with dropping it after a certain time period.