Investment year in review.

[9jNYstarkOH]

Will the people receiving the 10k be taxed on it? If so they will complain at tax time.

[phade]

17 minutes ago, BizCT said:

Exactly. Why are you penalized for doing well?

I was lucky and my parents paid for my college. But they never made much, they just saved a bunch. Why don't they deserve $10K? I guess I'm just pissed because yesterday I literally made another lump sum to my daughter's 529 fund (she's 2.5 years old) and I'm doing everything I can to save for her college while other people get a free $10K, which at 8% return over 30 years is $100K

I'm pissed because I'm going to have to write a check in January to pay the damn thing off. Been letting that money earn some interest since the freeze. It's a hard answer for when people are in or out because you'll never please everyone. I do agree that the cost of college has become untenable and the gov't backed loan system created hyper-inflation of tuition costs. There should have been some structure around it somehow to prevent it - no idea what that would be, but it went unchecked for a long time. Now people are shunning college as a growth opportunity in volume that we haven't seen.

It puts kids in a bad spot if they're not going into the job market or trades - I would love to think I was smart at 18, but I couldn't tell a good deal from a bad deal at that age. All I knew was I needed to go to college because I didn't want to do trades for a living (nothing wrong with it, was a preference). Thankfully I've netted positive ROI but it still stinks for those who chose other paths, don't qualify for programs, etc. The in or out slice is just a facet of life and taxes, lol.

Edited August 24, 2022 by phade

[phade]

9 minutes ago, 9jNYstarkOH said:

Will the people receiving the 10k be taxed on it? If so they will complain at tax time.

They should be as debt relief is usually taxable. I'm sure however, they'll create some code that allows it to flow free.

 

[phade]

I wonder if something like a match plan would have been better? IE Up to 10k relief with a 100% match of funds paid down on principal. So if you had $20K in debt, you could pay $10K and be done with a $10K match from the government. I don't know, throwing out ideas for the sake of consideration, but the washing of $10K up front just seems like inflation will keep going. It's like gas on a fire I guess.

[chads]

Why not just lower the Interest rates to 1% and let them pay back principle.

[phade]

9 minutes ago, chads said:

Why not just lower the Interest rates to 1% and let them pay back principle.

Not a bad idea by any stretch, but the "problem" per say is that some people don't have liquid means to repay. Not saying right or wrong, but saddling someone with 50-100K in debt for a teaching job or similar that pays $30-40K upfront makes it challenging with housing costs and what not. Again, not saying its right, but I think it's more about the payment size and debt load overall. Alot of the voting block this panders to, are people who took out SLs for community college and didn't finish or have some low-paying job with a basic two or four year degree. No perfect answer here if there is any type of debt relief. Short of paying back what you owe, of course. Novel idea, but I think that one is off the table.

[Nomad]

I’d like to see student loans run like most all others . Look at the value of the degree, it’s cost and the likely ability of the borrower to pay it back . Oh and a trip to Cancun during school will trigger an immediate recall of the loan .

Buy a house the bank appraises it , checks your credit, other debts, job history then decides if and how much they will loan . Car very similar, business loan ,let’s see your business model to start .

 

[phade]

6 minutes ago, Nomad said:

I’d like to see student loans run like most all others . Look at the value of the degree, it’s cost and the likely ability of the borrower to pay it back . Oh and a trip to Cancun during school will trigger an immediate recall of the loan .

Buy a house the bank appraises it , checks your credit, other debts, job history then decides if and how much they will loan . Car very similar, business loan ,let’s see your business model to start .

 

Unfortunately there would be alot of criticism of that based on the belief the credit system is flawed for certain demographics. Data shows certain demographics are many multiples more likely to repay their SLs. In some data cases, you see a BIG swing - one group repays 44% after X years (I think it was like 10-15 years) and another group had a net balance increase (due to not being able to draw down the principal and suffering interest compounding). 

Again, not saying right or wrong, but that kind of stuff would get into credit analysis in terms of ability to repay. Maybe the gov't could take that idea and set certain limits based on profession/degree type, however? I don't know. Hard thing to solve for.

[Five Seasons]

I'd like to see kids that have no desire to go to college, or know what they're interested in, or going to obtain some useless degree be educated more on the trades. I was talking with a guy at football this weekend who is in one of the local pipe fitters unions. His guys are making ~$130k a year. How is that not good money for something in such demand with little to no debt. They're still receiving a technical education in their trade, but their trade doesn't tack on art history 101 as a required part of it.

Society needs to stop looking down at blue collar. Literally every time I attempt a new home owner DIY project I gain more and more respect for these guys. Something that seems as simple as laying pavers has all sorts of levels (no pun intended) to it that must be done right. Sure the stakes and complexity aren't up there with heart surgeons, but not everyone needs to be a doctor or a lawyer.

Sincerely,

an engineer (haha)

[BizCT]

5 minutes ago, Belo said:

Society needs to stop looking down at blue collar. Literally every time I attempt a new home owner DIY project I gain more and more respect for these guys. Something that seems as simple as laying pavers has all sorts of levels (no pun intended) to it that must be done right. Sure the stakes and complexity aren't up there with heart surgeons, but not everyone needs to be a doctor or a lawyer.

Sincerely,

an engineer (haha)

Especially with the boom of HGTV, social media, influencers, etc. all related to homeowner stuff. Then throw in Covid and people are spending way more time at home so they are doing more and more renovations. If I could do it all over again I would have done something home-related and actually called people back! It would be a goldmine. It's really hard to find good quality work these days. But who knew 20 years ago?!?

[phade]

18 minutes ago, Belo said:

I'd like to see kids that have no desire to go to college, or know what they're interested in, or going to obtain some useless degree be educated more on the trades. I was talking with a guy at football this weekend who is in one of the local pipe fitters unions. His guys are making ~$130k a year. How is that not good money for something in such demand with little to no debt. They're still receiving a technical education in their trade, but their trade doesn't tack on art history 101 as a required part of it.

Society needs to stop looking down at blue collar. Literally every time I attempt a new home owner DIY project I gain more and more respect for these guys. Something that seems as simple as laying pavers has all sorts of levels (no pun intended) to it that must be done right. Sure the stakes and complexity aren't up there with heart surgeons, but not everyone needs to be a doctor or a lawyer.

Sincerely,

an engineer (haha)

This isn't a trade vs college argument at all but I always approach people's income levels with a grain of salt. People throw out numbers alot in generality. For example, those guys might be many years into their union careers, paid dues/hard knocks (dirty hands, clean money), etc. Some people are in business and have grosses at a good rate but net low, etc.

Data shows 1 in 10 to 1 in 12 Americans make $100K or more per year. It's a pretty consistent number. I'm sure wage inflation will make that go up in the 21-22 timeframe as data is refreshed, but still, not many people make $100K+ a year. Only about 30-35% of households make over $100K per year combined. I hear alot more people say they or others with them make $100K+ per year, way more than 1 in 10 or 12.

Similar to people saying how high they set their stands, the tape measurer might be off a bit. Off my soapbox.

One thing I will say about $100K jobs (adjusted for locale inflation) - none of them are easy by any stretch. Trade, white collar, you name it. Big money doesn't come easy. People earn it.

Edited August 24, 2022 by phade

[Five Seasons]

5 minutes ago, phade said:

This isn't a trade vs college argument at all but I always approach people's income levels with a grain of salt. People throw out numbers alot in generality. For example, those guys might be many years into their union careers, paid dues/hard knocks (dirty hands, clean money), etc. Some people are in business and have grosses at a good rate but net low, etc.

Data shows 1 in 10 to 1 in 12 Americans make $100K or more per year. It's a pretty consistent number. I'm sure wage inflation will make that go up in the 21-22 timeframe as data is refreshed, but still, not many people make $100K+ a year. Only about 30-35% of households make over $100K per year combined. I hear alot more people say they or others with them make $100K+ per year, way more than 1 in 10 or 12.

Alot of people say they make $100K+ per year, but similar to people saying how high they set their stands, the tape measurer might be off a bit. Off my soapbox.

One thing I will say about $100K jobs (adjusted for locale inflation) - none of them are easy by any stretch. Trade, white collar, you name it. Big money doesn't come easy. People earn it.

I know that wasn't the topic. But if we're bitching about the price of college, it's relevant. 

These wages were for anyone in the union, including those just starting. He actively cannot find enough people to fill open roles. They wouldn't be paying for radio ads if they were turning people away.

[phade]

1 minute ago, Belo said:

I know that wasn't the topic. But if we're bitching about the price of college, it's relevant. 

These wages were for anyone in the union, including those just starting. He actively cannot find enough people to fill open roles. They wouldn't be paying for radio ads if they were turning people away.

I'm not disagreeing, but math doesn't lie. only 8-10% of the US adult population makes $100K or more per year. $130K puts them in the top 6-7% of wage earners in the US. Not saying he is lying, but if it's 100% true, it's a mathematical anomaly, if you get my point. Most trades, just like most college-degree driven jobs do not lead to $100K plus per year. 

[BizCT]

The sad thing is I once read that 50% of Americans who make $100K+ still live paycheck to paycheck. That's terrifying to me. I have always been a believer of paying yourself first. The first thing that comes out of your paycheck is your savings. Then after your savings, comes your house and so on.

[Five Seasons]

13 minutes ago, phade said:

I'm not disagreeing, but math doesn't lie. only 8-10% of the US adult population makes $100K or more per year. $130K puts them in the top 6-7% of wage earners in the US. Not saying he is lying, but if it's 100% true, it's a mathematical anomaly, if you get my point. Most trades, just like most college-degree driven jobs do not lead to $100K plus per year. 

supply and demand and this field is skyrocketing the rates in recent years though. So you're right, not all tades will make that kind of money in a non-OT 40 hour week and of course the wear and tear on the body and dirty parts of the jobs. There is still something to be said that many company's will pay for you learn the skill, so you're not coming out with $100k in debt either. I get it too, i'm college educated. I make good money, I'm not anti-college at all. Just that we should stop pushing EVERY kid to go to college. 

[9jNYstarkOH]

If the colleges had to support the loans.  I think the usefulness of the classes and amount of students allowed to take courses with very limited job potential would automatically correct.

[phade]

5 minutes ago, BizCT said:

The sad thing is I once read that 50% of Americans who make $100K+ still live paycheck to paycheck. That's terrifying to me. I have always been a believer of paying yourself first. The first thing that comes out of your paycheck is your savings. Then after your savings, comes your house and so on.

Curious how much of that debt load is from SLs - IE doctors, attorney, etc., and other high end degrees that consume huge up front OPEX. Similarly, I wonder how much of that comes from $100K jobs in high COL areas like San Fran, NYC, etc. where homes start at insane amounts.

Lifestyle creep is a real thing, too, and something with age I've come to understand and balance, thankfully.

I have a friend who is a pediatrician. She exited school with $200K+ in SLs. She's been post-college for three years or so, and reeling it in quick. But still, that is a huge week to week paycheck life up front.

[phade]

8 minutes ago, Belo said:

supply and demand and this field is skyrocketing the rates in recent years though. So you're right, not all tades will make that kind of money in a non-OT 40 hour week and of course the wear and tear on the body and dirty parts of the jobs. There is still something to be said that many company's will pay for you learn the skill, so you're not coming out with $100k in debt either. I get it too, i'm college educated. I make good money, I'm not anti-college at all. Just that we should stop pushing EVERY kid to go to college. 

I don't think we do that any longer - have you seen the rates over the past few years? It's dropping when adjusted for population. Fewer people are going to college.

[phade]

10 minutes ago, 9jNYstarkOH said:

If the colleges had to support the loans.  I think the usefulness of the classes and amount of students allowed to take courses with very limited job potential would automatically correct.

This is valid for sure - the gov't backed loans allowed colleges to go for scale, admitted students that probably shouldn't have been, taking more students in general, and raising prices, etc. 

[Five Seasons]

11 minutes ago, phade said:

Lifestyle creep is a real thing, too,

I'd have given one of my nuts for just one week of the paychecks I have now when I was just starting out. I still save the same percentage but it's funny what happens when you just start buying better things lol. 

[phade]

16 minutes ago, Belo said:

I'd have given one of my nuts for just one week of the paychecks I have now when I was just starting out. I still save the same percentage but it's funny what happens when you just start buying better things lol. 

I would have too, but despite maxing a 401K match back then (I was diligent on that at day 1), I still would have pee'd away most of that paycheck on dumb stuff. It took a very long time for me to become smarter admittedly. Late bloomer I guess. I was flat out dumb back then.

We have some lifestyle creep but we keep it in check IMO. We still clear a material percent monthly. All our formal debts on a monthly basis equate to 15% of my gross alone, not inclusive of my wife's income, and my business. We're spending alot of time lately trying to become confident on how to best manage it on a go forward basis for passive income and preservation.

[phade]

Well it is official now with the tweet going out.

I am curious how they would determine income by borrower in a household or married tax filing status. I suppose you could get to it on taxes but that seems like it'd be alot of work, no? How would deductions apply to one person in a married filing? Assuming its AGI, too.

Edited August 24, 2022 by phade

[Five Seasons]

1 hour ago, phade said:

I would have too, but despite maxing a 401K match back then (I was diligent on that at day 1), I still would have pee'd away most of that paycheck on dumb stuff. It took a very long time for me to become smarter admittedly. Late bloomer I guess. I was flat out dumb back then.

We have some lifestyle creep but we keep it in check IMO. We still clear a material percent monthly. All our formal debts on a monthly basis equate to 15% of my gross alone, not inclusive of my wife's income, and my business. We're spending alot of time lately trying to become confident on how to best manage it on a go forward basis for passive income and preservation.

oh I'm still occasionally dumb, but I also don't work this hard not to enjoy what I worked for. I think it's just important that you don't keep upgrading as you make more money and as you noted, keep living paycheck to paycheck. 

[moog5050]

I find the whole concept of student loan forgiveness as a bit absurd when the rest of the country will be forced to now incur those costs.  I paid my own loans (to the extent I borrowed), pay for schools via taxes that my kids don't attend and now I will have to pay for loans that others took out via my taxes.   It was their decision to take the loan.  Those that took the loans should pay them just like all those before them did.  We have had far too many "free" handouts already that will burden future generations due to crazy national debt.

Edited August 24, 2022 by moog5050

[suburbanfarmer]

3 minutes ago, moog5050 said:

I find the whole concept of student loan forgiveness as a bit absurd when the rest of the country will be forced to now incur those costs.  I paid my own loans (to the extent I borrowed), pay for schools via taxes that my kids don't attend and now I will have to pay for loans that others took out via my taxes.   It was their decision to take the loan.  Those that took the loans should pay them just like all those before them did.  We have had far too many "free" handouts already that will burden future generations due to crazy national debt.

Agreed, what are we really teaching our future generations here?

Keep borrowing and eventually you dont have to pay?