Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - 30th Nov 21
Omicron Covid Wave 4 Impact on Financial Markets - 30th Nov 21
Can You Hear It? That’s the Crowd Booing Gold’s Downturn - 30th Nov 21
Economic and Market Impacts of Omicron Strain Covid 4th Wave - 30th Nov 21
Stock Market Historical Trends Suggest A Strengthening Bullish Trend In December - 30th Nov 21
Crypto Market Analysis: What Trading Will Look Like in 2022 for Novice and Veteran Traders? - 30th Nov 21
Best Stocks for Investing to Profit form the Metaverse and Get Rich - 29th Nov 21
Should You Invest In Real Estate In 2021? - 29th Nov 21
Silver Long-term Trend Analysis - 28th Nov 21
Silver Mining Stocks Fundamentals - 28th Nov 21
Crude Oil Didn’t Like Thanksgiving Turkey This Year - 28th Nov 21
Sheffield First Snow Winter 2021 - Snowballs and Snowmen Fun - 28th Nov 21
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21
Stock Maket Trading Lesson - How to REALLY Trade Markets - 26th Nov 21
SILVER Price Trend Analysis - 26th Nov 21
Federal Reserve Asks Americans to Eat Soy “Meat” for Thanksgiving - 26th Nov 21
Is the S&P 500 Topping or Just Consolidating? - 26th Nov 21
Is a Bigger Drop in Gold Price Just Around the Corner? - 26th Nov 21
Financial Stocks ETF Sector XLF Pullback Sets Up A New $43.60 Upside Target - 26th Nov 21
A Couple of Things to Think About Before Buying Shares - 25th Nov 21
UK Best Fixed Rate Tariff Deal is to NOT FIX Gas and Electric Energy Tariffs During Winter 2021-22 - 25th Nov 21
Stock Market Begins it's Year End Seasonal Santa Rally - 24th Nov 21
How Silver Can Conquer $50+ in 2022 - 24th Nov 21
Stock Market Betting on Hawkish Fed - 24th Nov 21
Stock Market Elliott Wave Trend Forecast - 24th Nov 21
Your once-a-year All-Access Financial Markets Analysis Pass - 24th Nov 21
Did Zillow’s $300 million flop prove me wrong? - 24th Nov 21
Now Malaysian Drivers Renew Their Kurnia Car Insurance Online With Fincrew.my - 24th Nov 21
Gold / Silver Ratio - 23rd Nov 21
Stock Market Sentiment Speaks: Can We Get To 5500SPX In 2022? But 4440SPX Comes First - 23rd Nov 21
A Month-to-month breakdown of how Much Money Individuals are Spending on Stocks - 23rd Nov 21
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks - 23rd Nov 21
Like the Latest Bond Flick, the US Dollar Has No Time to Die - 23rd Nov 21
Why BITCOIN NEW ALL TIME HIGH Changes EVERYTHING! - 22nd Nov 21
Cannabis ETF MJ Basing & Volatility Patterns - 22nd Nov 21
The Most Important Lesson Learned from this COVID Pandemic - 22nd Nov 21
Dow Stock Market Trend Analysis - 22nd Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Living on Two Paychecks or on Too Many Expectations?

Personal_Finance / Money Making Nov 15, 2013 - 10:03 AM GMT

By: Don_Miller

Personal_Finance

A good friend once asked me, "How come in the 1950s, you could support a family on a single paycheck, but now my wife and I both have to work to make ends meet?" I'd heard this question many times before. People give countless answers, from the Fed's inflationary policies to the lack of decent-paying manufacturing jobs. Usually, the explanations suggest macroeconomic shifts and major policy changes. And sure, those explanations are a part of it, but folks rarely mention increased expenses and heightened expectations.


Strip out unnecessary modern expenditures and make an apples-to-apples comparison between the cost of living today and that of the 1950s, and most of us could probably live on a single paycheck. The problem is not that our standard of living has gotten worse – it's that our expectations have far outgrown the reality of most paychecks.

Let's start with modern inventions; ultimately, most are conveniences. For example, there's your cellphone bill and monthly high-speed Internet connection. These are important tools in the modern age, but you could live without them. Then, think of the innumerable gadgets which occupy most of our homes, from iPads and iPods to laptops to flat-screen TVs to Xbox game consoles, and so on. Unless you really need these devices for work, it's hard to argue that one couldn't live without them. People in the 1950s survived without them – and so could you.

Let's move on to a bigger expense: the family car. Today, "fleet of cars" is usually more accurate. According to the Department of Energy, in 1950 there were 323 vehicles per thousand people in the US. In 2010, there were 811 vehicles per thousand people. Today, every member of the family has a car, if not one to spare – and we're not talking old junkers, but pretty nice cars.

Now let's look at the really big expense: the family home. Drive down to a middle-class neighborhood built in the 1940s or '50s. You'll see very modest homes – one-story buildings with a small bedroom for the parents and two to three closet-sized bedrooms for the kids, a living room, a kitchen, and a dining room. Depending on how lucky you were, there may have been two bathrooms instead of one. This cookie-cutter formula spanned the country. The houses weren't that pretty or incredible, but they got the job of raising a family done.

After your drive to that part of town, cruise into a middle-class subdivision built in the last ten or twenty years – it's a completely different picture. Every house is either a McMansion or made to resemble a smaller version of a McMansion. The kids' bedrooms in these things are bigger than most people's first apartment. Let's not even mention the size of the master bedroom; and of course nearly every bedroom has its own bath. Don't forget the additional rooms, such as "the playroom."

What's considered a middle-class lifestyle today isn't even close to the middle class of the 1950s. Add up all of these things: the gadgets, the cellphone and Internet bills, the brand-new cars for the whole family, and the mini-mansions – it's a ton of money that previous generations weren't spending. When someone lives this sort of lifestyle and wonders, "Jeez, why do my wife and I both have to work?" my answer is, " Of course both of you have to work. Look at your lifestyle." If you lived more modestly, the necessity of two paychecks might not seem so set in stone.

Now, I'm not suggesting that everyone should live a miserly, monastic life. I'm sure that if we could send cellphones back into the past, people in the 1950s would buy them too. I'm simply suggesting we take a second and reconsider what really makes us happy and fulfills our needs. Did people in the 1950s live unfulfilled lives without three iPads and a McMansion?

This reevaluation of spending priorities is especially important for retirement planning. If you want to work longer to continue spending, that's up to you. There's nothing wrong with that choice. However, at some point it can make you a prisoner of your own expectations. With an investment-newsletter subscription, we recommend investments to strengthen your portfolio. While managing your investments is important, what doesn't cost a penny is adjusting your expectations. It's a lot harder to earn 30% returns than to downsize to a lifestyle that only requires 8% returns.

When it comes to retirement, if you don't limit your expectations and put them into check, one of two things will happen. Either you will have to keep slaving away to bring in more income, or you'll fail to earn enough, and you'll always feel jilted and empty. Even if the first option works out, someone will always have a bigger yacht or house. At retirement, it's time to stop keeping up with Joneses (and stopping well before then can help you hold on to more of your hard-earned money). The combination of a fixed income and endless desires is a guaranteed route to misery and unhappiness.

Maybe you don't need to retire in a McMansion or have three houses in retirement or drive the newest Corvette. People lived very well on more modest incomes long before the current era of unlimited spending and endless expectations. Maybe – just maybe – the problem in our modern society is not a paycheck which is too small, but rather expectations which are too big.

While it is unrealistic to expect consistent investment returns of 30% or more, it is important to find the most secure vehicles to fund your retirement so that your lifestyle won't force you back into the workplace. This requires research, diligence, and active management of your wealth, but you do not have to do it alone.

The Miller's Money Forever team is constantly on the lookout for secure investment opportunities with healthy returns and strong dividends. We've outlined the best ways to put your current nest egg into cash-producing instruments so you have enough to cover your expenses each month. If you do it right, you'll have several "paychecks" coming in each month. We strongly urge you to check out our free Money Every Month special report so you can start earning those extra paychecks and keep living on your own terms.

© 2013 Copyright Casey Research - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Casey Research Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in