"John Richards" <jr70[at]blackhole.invalid> wrote:

- quote -

http://www.census.gov/hhes/www/housi...ownerchar.html

"Generally, homeownership rates rose in each decade since 1950, except in the
1980s when it remained unchanged ¾ increasing from 55 percent in 1950 to 66
percent in 2000. "

-- Doug

John - I thought of what you refer to. People and contacts are as much
a part of financial planning as running spreadsheets for retirement.
"People skills" are vital, even for routine things like negotiating a
mortgage, and certainly in a retirement community. To the degree that
"job specialization" and "entertainment" isolate us from others, we
lose a "standard of living". I think Elizabeth draws a valid
distinction there. The internet and this forum work to facilitate
communication, and I don't want to get in trouble with the worthy
moderators (Hi, Skip!).

"Elizabeth Richardson" <erichktn[at]worldnet.att.net> wrote in message
news:PDtGg.283357$mF2.95333[at]bgtnsc04-news.ops.worldnet.att.net...
- quote -

Is it? I'd like to see some actual home ownership statistics.

- quote -

Is acquiring a TV really such a big improvement in living standards?
What did people do before TV? They played games together, went to the
theater, roller-skating rink, etc. It seems to me that people-to-people
interaction is more beneficial than just sitting in front of the boob tube.
Modern inventions like the cell phone are turning into double edged
swords. People are developing higher levels of anxiety because they are
accessible 24/7 to their bosses and others making demands on their time.
Also, there's the increase in car accidents caused by cell phone users.
So, I guess I was very naive being happy in the 1950's, not knowing
I was deprived of big screen TVs and cell phones.

--
John Richards


======================================= MODERATOR'S COMMENT:
Please relate comments to financial planning.

If the average person's furniture
- quote -

I wasn't necessarily responding to the furniture comment. This whole thread
has talked about the cost of living, while the subject is the standard of
living. Most people didn't own their own homes in 1950. I don't know whether
it's yet a majority of people now, but it's certainly a much larger
percentage. That's an increase in the standard of living, regardless of the
cost of houses. And, frankly, most of those who had homes, didn't have
dining rooms, so how much dining room furniture cost in 1950 vs 2006 is a
moot point. I know that few people had TVs in 1950, while it is an unusual
household in the US today that doesn't have one. That's an increase in the
standard of living, no matter what TVs cost today vs 1950. Most of the
people who had telephones in 1950 had a party line. Does anyone think that
today's phone service isn't an increase in the standard? I could go on and
on. Given, the cost of living has risen enormously. So has the standard of
living, which is the subject.

Elizabeth Richardson

Elizabeth Richardson wrote:
- quote -

Standard of living must account of the quality of goods being consumed
(in addition to the quatity) which is what I think he was referring to.
I don't think they are orthogonal. If the average person's furniture
is of worse quality today than it was 50 years ago, then I think that
is a drop in that aspect of the standard of living.

Anoop

"dapperdobbs" <GeorgeCFL[at]hotmail.com> wrote in message
news:1156112793.584831.286450[at]i3g2000cwc.googlegroups.com...
- quote -

I think we're talking about two different things, here. I understood the
subject to be Standard of Living, yet most of you seem to be talking about
Cost of Living. Those are two entirely different issues.

Elizabeth Richardson

"Ron" <Brock_zz[at]yahoo.com> wrote in message news:1156034384.161942.128460[at]i42g2000cwa.googlegroups.com...
- quote -

Appearances can be deceiving. Our house started out with a nice
brick chimney, but it was damaged bad enough in an earthquake that
we replaced it with a framed one. Everyone else in the neighborhood
had to do the same. Nothing beats the strength of frame construction.

--
John Richards


======================================= MODERATOR'S COMMENT:
Please relate future comments to financial planning.

Ron wrote:
[snip]
- quote -

That's part of what makes the picture confusing - furniture today is
basically low quality, unless you want to pay $35,000 for a dining room
set crafted of real wood. In some sectors, the technological input has
reduced prices and raised quality (notable example: computers, air
travel). But in other sectors, such as "non-exportable sourcing,
labor-intensive" products and services (housing, furniture, education,
and medical care), it seems the costs of production and delivery
quintupled. Part of the costs are in scarcity of raw materials (wood,
real estate), and apparently in medicine bureaucracy had chewed up at
least 30% of costs, but I think the major costs of production are
domestic salaries and wages. (I'm not pointing a finger - just seems to
be factual.)

Although there is a lot more to buy today, and apparently we have
enough money to buy it, I still get the feeling that basics of life
cost more than the CPI would seem to indicate. E.g. I can either afford
or do without HDTV, laptops, and exotic cars - but the major portions
of my expenses that I cannot do without (houses, furnishings, medical
services, education) seem to be getting disproportionately expensive.

The new technologies (new products) are generally cheaper by the year,
but the old technologies are skyrocketing in price: education, housing,
medicine. The common factor seems to be that while computers and cars
can be manufactured overseas, land, houses, medical care, and education
cannot be manufactured overseas.

Maybe these are the items everyone needs, maybe there is an
inflationary spiral upwards in these sectors, and maybe this is what
makes us feel we don't have enough money. N. medical care is arguably
the biggest cost of retirement.

People today in the US are much more obsessed with material things in
my opinion. Earlier in this thread someone asked what size house a
person could buy in the 1950's and essentially was trying to make the
point that two incomes are needed because today's homes are bigger.
This may be true, but they are also generally built much more cheaply
with less expensive materials and workmanship. Just one example is
masonry chimneys. Most of the mc-mansions ging up today have framed
chimneys because getting a brick chimney laid is very expensive. The
new homes today by and large look great when new but they are not
comparable to homes built in the post war era in terms of materials and
quality.
It is appearance over substance and quality in my opinion....

"Douglas Johnson" <johnson[at]classtech.NOTPARTOFADDRESS.com> "Elle" <honda.lioness[at]nospam.earthlink.net> wrote:
- quote -

I think this is certainly a part of the occasional
significant reduction someone uninsured paying with a credit
card might receive. To back it up, a year or so ago I saw a
report on why a large university hospital charged uninsured
folks about 30% more. IIRC part of the explanation lay in
the cost of collecting bills. (Well maybe if they didn't
charge 30% more, it would not be quite so difficult?)

I am not pointing a finger here. I am saying the cost of a
medical procedure appears to vary a great deal from patient
to patient, insured to uninsured, hospital to hospital,
adjusting for effects like local economies and patient
health.

- quote -

I agree. In this vein, the media has recently reported on
studies demonstrating that some 20 to 30% (if memory serves)
of health care costs would vanish if we used a centralized
health care system, because 20 or 30% of each bill is the
cost of administering it.

I do think some important financial planning advice comes
out of this for those folks who are rolling the dice and
"self-indemnify." Namely, check with your health care
provider to see if they are giving the best rate possible
that they can. Make sure they know you're paying cash. Or
perhaps always pay with a credit card, like you say,
Douglas. I do not think this is taking advantage of the
system if, as some reports state, doctors and hospitals have
a two-rate system: The one they tell insurance companies is
the rate before the "fat" discount, and the smaller(?) rate
that makes sure everyone in the hospital (or whatever health
care facility) gets paid.

Kinda like the MSRP for cars vs. paying close to invoice?

I think the BEA gives inflation adjusted salaries and wages in some of
their income-related table.

The seeming consensus is - you succinctly stated it - the irony that
even though we in fact have more money, we feel we "do not have enough
money" because the things we "have to buy" total more than our increase
in income.

If anyone wanted to dig into it, I guess a list of the items added to
the CPI would shed somemore light. And come to think of it, the
assumptions about size and quality would be interesting, too. (E.g. is
the CPI definition of a TV set a 17" box, or is it the latest
flat-panel HD?) I know one factor in our spending must be a waste
factor - like needing a new car every three years, or tossing a
livingroom set instead of having it re-upholstered - and the CPI guys
don't account for consumer irrationality in their numbers. Nor does it
account for the amount of time spent watching TV instead of producing
or talking with friends. Aldous Huxley many years ago wrote in his
novel "Brave New World" about "soma" and entertainment. Interesting.

"Elle" <honda.lioness[at]nospam.earthlink.net> wrote:

- quote -

I've had this happen to me, too. This may be due to the fact that cash on a
credit card is payment certain, right now. Insurance is payment maybe in 60
days as long as the paperwork is all filled out correctly, is not lost is
processing....

-- Doug

"Tad Borek" <borekfm[at]pacbell.net> wrote
- quote -

services was "billed" but the patient paid "only" $3k.

Tad, of course this is what I would expect. What might
surprise you is if you found that the hospital across town
did the same services for half the price. We can't know, of
course, without some intensive offline research.

Uninsured this past spring I was originally to be billed
some $200 for a routine blood workup. Unprompted by me, the
front desk person said to call the lab and tell them I had
no insurance, and they would lop this bill in half. They
did. Uninsured last month I had root canal re-do surgery.
The bill shows a "fee" of $2045 but adds that I was being
given a discount of $660 for the two "extra" roots that had
to be cleaned out. I was billed $1385. I have no idea why I
was given this "discount." All I said was I was paying
"cash" with my credit card.

- quote -

If we could define "reimbursement" here, then maybe we could
dissect the issue further. But we have no idea what the
actual, "going rate" is for an appendectomy, for example,
given so-called insurance company discounts; the markup of
the health care industry to help ensure the discount does
not eat up too much profit; whatever the industry is now
doing to keep high deductible and/or cash-paying folks like
myself as customers; and the prodigiously high rate of
billing errors that occur between hospital and insurer.

Moderators: If you're going to shut down this thread, would
you please announce it?

"bo peep" <cowartmisc1[at]yahoo.com> writes:

- quote -


here's a handy CPI inflation calculator from the BLS:

http://data.bls.gov/cgi-bin/cpicalc.pl

Wages go up faster than inflation. (Total compensation has
been going up faster than wages, what with healthcare and such).

I wouldn't be surprised if average *real* (ie. inflation
adjusted) income has gone up by about 3x since 1950.
According to the census, indivual income has gone up
by about 2x between 1967 and 2003. (Again, that's
inflation adjusted. In nominal terms, that means that
the dollars themselves have gone up by 2x * the CPI
adjustment, which, between 1967 and 2003 gives a total
nominal increase of about 10x)

http://www.census.gov/hhes/income/histinc/p01ar.html
for example

- quote -

That's not true, at least according to the numbers,
your perceptions thereof notwithstanding.

Do not think that I'm minimizing your perceptions - they
are very real and have a huge impact here - but the amount
of stuff you can buy - and that includes everything from
shelter to healthcare - has vastly increased if your income
kept up with overall wage growth.

It's mainly that things that we all take for granted today -
from long-distance phone calls to color televisions to
high-tech medications to cars to air conditioning - these
things were far fewer - as many of them as existed at all -
during our parents generations.


--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
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dapperdobbs wrote:
- quote -

It probably increased a lot more than that, as the 1950-2006 period
includes some very high inflation/wage growth years. In my own case, I
entered the civilian workforce in 1969. Between then and 2004, my
income increased about 800%. However, if I compare car prices, my most
recent purchase (an economy car) cost almost 9 times as much as my
first new car, purchased in 1970. Gasoline is now more than 9 times
what it was then. I bought a house in 2003 about the same size as the
one my parents bought in 1968, but mine cost over 14 times as much as
theirs. Haircuts cost 10 times what they did in my youth, etc.

So while it is true that I make more *dollars* than my parents would
have ever thought possible, in most cases I can't buy as much with my
income as they did. So I have a lower standard of living than they did.

John Cowart

Elle wrote:
- quote -


Let me give a real example. I have a bill on my desk for four days at an
area hospital, from some complications involving a family member. This
was actually a short stay, positive outcome, no-big-deal event. $23,963
is the bill. $13,679 was the contractual adjustment. $7348 was paid by
the insurer. I owe $2936.

This is just one of a series of bills and the out of pocket liability is
typical - about 10%-15% of the original total. And it caps out at a
maximum each year based on the policy, so bankruptcy isn't going to
happen. You just need to reserve your out of pocket maximum in
accessible savings, and it's not a huge number.

You are correct that it is possible to go bankrupt even with health
insurance, because most plans don't cover 100% of services and
eventually hit a maxium. But obviously, the likelihood is much much
higher when the coverage is 0%. I am not going to go bankrupt off that
remaining 2936 amount and neither would anyone of even modest means. And
hitting lifetime policy maximums is unusual.

BTW this is the first significant medical expense in about 12 years. Did
the insurance justify itself? Yes, it did. The total bills were about
$60k originally, marked down about ~2/3, and then mostly reimbursed by
the insurer. The bulk of these expenses were hospital room/facility
charges, a few fairly routine tests, and doctor time. My guess is that
an appendectomy (surgery) would be at least in the low-to-mid-10k's
range (30k?) based on surgery bills I have seen. Heart surgery (bypass)
& recovery I saw recently and it was something like $60k after insurance
discount, some insane amount before it, and I think $0 after insurance.
That's become a somewhat common procedure.

And on and on. Set foot in a hospital and you are probably going to be
out a few $k per day at a minimum. So no I do not think $1400 is much to
pay for protection against that. Thinkin in terms of financial planning
priorities...many people insure their cars against
collision/comprehensive damages for close to that amount every year,
though the potential liability is much higher for health problems, and
arguably more likely to occur.

Again, I think the fact that you don't have control over prices makes it
even more important to seek insurance. At least you have a motivated
agent (the insurance company) that seeks to minimize reimbursement to
the facility. And you have coverage for the bulk of the cost, between
the coverage itself and the negotiated discount. Without insurance
you're directly exposed to the whimsical and irrational pricing that
seems to go with health care.

-Tad

"Elle" <honda.lioness[at]nospam.earthlink.net> writes:

- quote -

Actually, by having a catastrophic coverage plan, you would
probably qualify for your insurance company's negotiated
prices for the healthcare that you do pay for out of pocket -
which savings are *huge*.

Yes, it'd be nice if prices were simply posted or listed
before hand and if there weren't such bizarre price-discrimination
in the system (uninsureds paying higher prices for the exact
same service if they pay out of pocket) but all the wishing
in the world won't change that right now.

I'd be very surprised if your physicians and other medical
service providers to not have a prenegotiated - and very
much lower rate - for members of specific healthplans
including, very likely, that high-deductible plan you
mention above.

--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting

"Tad Borek" <borekfm[at]pacbell.net> wrote
- quote -

Can you tell me the average and approximate standard
deviation of the cost of an appendectomy in your city today,
with and without health insurance? How many folks with
health insurance have nonetheless had to declare bankruptcy
after a severe ailment? A recent NY Times report indicates
that even good health insurance plans will not preclude
bankruptcy.

I think some $1400 a year for catastrophic health insurance
is not cheap given I have virtually no control as a consumer
over prices. Because health care costs are so unknown (and
apparently so variable, even in the same city), ISTM many
people are "flying blind" with or without health insurance.

The Guy wrote:
- quote -

I think the average income has tripled from 1950, while the CPI index
has doubled, and if those numbers are right, we should (again) have
more money ... but as you and others have pointed out, there seem to be
more things we cannot have. Elizabeth points out that what we CAN have
is the same, depending, if I read her correctly, on our "ambitions".

Maybe my flawed classical nature is showing, but I think back to the
sinking of the Titanic, and of the genuinely wealthy aristocrats who
gave up their seats on lifeboats to women and children in steerage
class. Honor and integrity walk on all roads of life, rich and poor,
and it is the only thing we can take with us.

Wish we had more of it! It would make life easier.

- quote -

Somehow, I've never thought of the cost of things making a difference in the
comparison of different living standards. To me, a living standard would
compare size of dwelling, number of appliances, and other things that make
life easier, convenient, etc. What difference does it make how much a 1400
sf house cost in 1950 compared to 2006? It's still the same 1400 sf house,
so the standard of living is the same. Yes, the cost of those things affects
one ability to maintain or increase one's standard of living, but it isn't
reasonable to compare the cost of the same item over a span of years and
conclude that the standard has changed (one way or the other).

I realize the original question also addressed why people today have less
money than the people in the 1950s. The fact that so many more people
actually own their own - larger - living quarters is an indication how much
the standard of living has increased. I don't have any statistics in front
of me (I'm sure several of you will run find them), but I think the
percentage of home ownership has grown quite a bit in the last 50+ years. We
also have a lot more "things", most of which did not exist 50+ years ago.

Elizabeth Richardson