[afpx]

Here’s a controversial perspective. Maybe most people’s expectations are too lofty, and their abilities much lower than the think they are.

In 2000, less than 25% of the working popultion had a bachelors degree. Today, every young person I talk to expects to finish a Phd, JD, and MBA. And, now everyone wants to live in the trendiest (highest-cost areas). There are plenty of places in the US where a house can be purcahsed for under $100k.

Unless you came from wealth, or you’re definitely in the top 1% of your peers, maybe set your expectations a bit lower. Or, at least be patient as you work your way up. Build wealth the old fashion way (like we did 25 years ago) - get a menial job (i.e. “in the mail room”), genuinely try to help your bosses (not compete with them), slowly build your reputation and circle of influence, take night classes at the community college, live below your means, save, etc.

[annabellish]

What the linked article is trying to explain is that the opposite is true. It isn't that everyone wants to live in the trendiest areas, it's that they _have_ to in order to find a job that has any hope of paying off their debts fast enough for them to save up enough so that when the next huge expense comes through they can afford it... likely taking on more debt even so.

It isn't that everyone wants a degree - certainly not, given the price - but if you don't have one then you don't even have a chance of making enough savings to afford housing, healthcare, education for your children, et cetera.

People _can't_ "set their expectations a bit lower". Your options are to have no expectations, and accept that you're not going to be able to provide for your children, or to join the same rat race as everybody else and get locked into this cycle of wildly increasing prices. There isn't a middle ground for people to aim at any more.

[Raidion]

I disagree. I think it would be interesting to do that same article, but replace the MIT tuition with that of a decent in state school, and replace the housing prices with those of a medium/large midwest city like Omaha, Cleveland, or Pittsburg.

Salaries don't scale like rent does. In Cleveland, you can get a 1 bedroom for around 900 dollars, in SF, that's 3.5k+. That means to maintain the same purchasing power and keeping monthly rent at 1/40th of salary, you'd need to earn 36k in CLE, but 140k in SF. 140k isn't out of reach in the Bay Area at all, but usually requires a college degree, while 36k in CLE is in reach of those without a college degree, and numbers twice that high are in reach of those with a STEM degree.

This means you're going to have more disposable income, not having to deal with 5%+ rent increases every year, pay less in the higher tax brackets, and be able to buy a house without paying nearly as much interest. All just because you stop trying to be the top 1% and live in some place that isn't NYC or SF, but is still in the top 50 largest cities in the US.

[annabellish]

It's possible that if you did that you might be okay _today_, if your kids are also gonna go to a "decent" school instead of a better school, if you're also gonna get a "decent" house, et cetera, and you happen to live in the right place to enable all of this. The trend lines are strongly suggesting that everywhere is going down similar paths, though. There's no indication there's anywhere specific they're going to -stop-.

The problem here is the trends, not today, because those big expenses are in the future and we need to worry about what they'll be then, not what they are today. The trends are happening just about everywhere, just to different degrees.

[lotsofpulp]

Yes, with the wealth (and power) gap increasing, if you want your descendants to have a chance to move up class-wise, you have to try and be in school districts where they will make friends who are high achieving (usually from high achieving parents), so then they can get into high achieving colleges where they can create a network of high achieving people to rely on in their future careers and lives, and maybe even marry one of those. It all compounds, and the faster it compounds, the faster the gap widens and the harder it is to catch up. Until something causes the reset button (revolution) to be hit.

[Raidion]

But that's the thing, by definition, you can't always move up, and in a lot of cases, it's harmful trying to move up when you're really not ready to spend the effort it takes to give there.

It's statistically unlikely that you and your offspring going to perform at world leading levels of being in the 1%. It's the equivalent of buying the best carpentry tools in the industry and then complaining that they're too expensive for your hobby use. If you're going to pay for Harvard/MIT, you're going to get a lot out of them, but the ROI for going to a such expensive school and living in a highly competitive area only works if you can take full advantage by really maximizing connections and getting high grades. If you can't, which is ok, you're just wasting time and money where spending 60% to go to a decent state school and living in a place that isn't next to FAANG office is going to get you 95% of the return in purchasing power.

Sooner people realize you don't have to be the best, richest, smartest, etc to be happy is when people will stop mortgaging their future to try to achieve something they don't actually want.

[cjmb]

Hi, OP of the actual article here!

Thanks for summarizing this here. This is spot on. And of course I'm being a bit hyperbolic -- like I said, the median American still gets to build wealth. Just not as much as their parents. Or their parents' parents.

The only "expectation" I took as a granted was that a given person not-so-far-from-the-median can build Wealth in America. If you're willing to set THAT one lower, then perhaps there is no problem now or on the horizon...

I commented elsewhere that it doesn't seem to me that "Economic Surplus" / "Building Wealth" is an axiom of any system. So perhaps that expectation should in fact be lowered. But that's certainly not something my peers or I are willing to do. Thus the race.

[randomdata]

> but if you don't have one then you don't even have a chance of making enough savings to afford housing, healthcare, education for your children, et cetera.

Where does this idea come from?

According to the OECD, only 48% of American adults have a post-secondary education. I find it hard to believe that 52% of Americans truly cannot afford housing, healthcare, education for children, etc. I might even bet that the 52% have an easier time (especially with shelter), as there seems to be a correlation between the desire to live in an expensive city and having post-secondary attainment.

Additionally, wages are stagnant. The rapid rise in post-secondary attainment mentioned by the parent has done nothing to increase incomes among the workforce. The article points out that incomes have been on the decline for those without a post-secondary education. But misses the obvious: As colleges select for the most successful people, the most successful people without a degree who brought up the average in previous years now belong to the college group.

People can't set their expectations lower, but they can set them higher by not falling prey to misleading interpretations of the data surrounding college. The data is abundantly clear that there has been no advantage in the significant rise in post-secondary attainment. If anything, people are worse off now because of it.

[InclinedPlane]

The median age in the US is 38. Half of the population is older than that, since 27% of the population is under 18 that means nearly 70% of the adult population is over 38, about 45% is over 50, and about a quarter is over 60. Those older folks had the benefit of higher wage jobs in their early careers, and were able to build their careers, job experience histories, and income levels much faster than later generations. Additionally, because of the much lower costs of housing they were able to build their wealth at a much faster rate.

Someone who is 60 years old or older today (which again makes up fully 1/4 of the adults in the US) would have seen average (nominal) wages of about 12k/yr and would have been able to jump into a mortgage only a few years after entering the job market, on a home price of just 60-100k. With a 30 year mortgage they would today be living with a fully paid off house worth easily half a million dollars, and would have had one to two decades of being able to plow their former mortgage payments into investments. Those people have no problem paying for housing, healthcare, children, etc.

It's folks who were born after 1980 who face lower wage jobs with higher requirements, higher costs of education, higher housing costs, higher medical costs, etc. And face an uphill battle in terms of building their careers, increasing their income, and building their wealth.

As to your point about college educations, it is much more difficult to obtain a high paying job without college. And study after study show that college educations result in higher incomes. You might claim that colleges select for the most successful people, which skews the results, but that doesn't change the fact that most desirable and well paying jobs still list college educations as requirements.

[randomdata]

> on a home price of just 60-100k.

As a millennial, I bought my home for $120k. I'm not sure if your figures are real or nominal, but even if they are real, at worst we're talking $20k more. That's not life ending. Food is way less expensive now. I will easily save $20k on food during the lifespan of my home when compared to what they had to spend, not to mention that interest costs are much cheaper today.

The housing issue is vastly overblown, except in certain major centres. But if you have a job that compensates for the higher cost of housing, what's the problem? You cannot expect to have more money than someone outside of the city. The economy and its quest for equilibrium would never allow that over the long term, although there may be short term opportunities now and again. Economically speaking, your higher paying job must, on average, come with higher expenses so that you don't make more money than people with low-income jobs in low-cost areas.

If you don't have one of those jobs that makes up for the cost of housing, why are you there? There are houses everywhere.

> it is much more difficult to obtain a high paying job without college.

A common misconception that it matters, but a higher paying job doesn't mean anything. The goal is to maximize income less expenses. If a job is higher paying, but you have higher living costs due to the job being in a high cost city, and needing a high cost college degree, then you're not necessarily further ahead.

If you are further ahead than you would be without, what's the issue? You're literally further ahead. The costs are a non-issue. The costs are recouped and then some.

> And study after study show that college educations result in higher incomes.

Not quite. Study after study shows that successful people are successful in college and in the workplace. This is not the same as college resulting in higher income. Handing a college degree to someone who has a crippling mental disability is not going to benefit from it in the workplace. They are going to struggle no matter what, just as successful people will succeed no matter what.

If we took it to the logical extreme and assumed everyone had a post-secondary education, the jobs wouldn't change. Someone would still be flipping burgers at McDonalds, someone would be driving trucks around the country, someone would be writing software, and so on. And they're not going to magically pay more just because you have a degree. Why would they? When have you ever offered the burger flipper at McDonalds more money because they happened to have a degree? College degrees have no bearing on the job market.

I see how it is easy to mix them up, but the data is abundantly clear that it is the latter and not the former. After all, incomes are stagnant and have been for 50-some-odd years. If incomes were increasing with post-secondary attainment, they couldn't also be stagnant.

[afpx]

Those seem to be two very extreme options. I’m certain that there are hundreds of other options available. I mean I can think of more than a dozen just off the top of my head.

In this case, the author appears to have a degree from MIT and a background in finance and engineering. Out of curiousity, I did a job search (outside the trendy areas), and there are plenty of high-paying jobs available to them. A person would just have to live in a boring area or take on a boring job, or live a boring lifestyle. I guess I’m not understanding why seemingly few people seem to accept trade offs these days.

[neuronic]

> Unless you came from wealth, or you’re definitely in the top 1% of your peers, maybe set your expectations a bit lower.

Why should any of us set our expectations lower? Because you say so? Why is the best piece of the cake reserved to some 1% folks largely with inherited wealth? Why should 1 billion Chinese set their expectations lower? Because they happen to not be born in Silicon Valley and their father doesn't run a law firm in Manhattan?

This is called wealth inequality to the max and it will crash our societies sooner or later. Pseudo-meritocracies will eventually break their necks over this and the developing crisis of democracy is one step into that direction. 2008 proved that the system is utterly broken and since then we put on a few bandaids at best.

> There are plenty of places in the US where a house can be purchased for under $100k.

Sure, those places just don't have the jobs people strive after, for example to escape automation in the 21st century.

[afpx]

I’m just providing an alternative perspective. It’s certainly not a mandate. If you know that you’re exceptional, then by all means go be exceptional. But, the vast majority of people aren’t exceptional. And, the truly exceptional are probably out there working their ass off right now, not reading HN.

High expectations = high chances for disappointment. I was exceptional in high school. One day a teacher bluntly told my “gifted” class, “You guys aren’t special. You may feel special right now. But, there are millions of people better than you. Be ready for disappointment.” That advice hurt, and I hated that teacher. But, the truth is that even after being lucky and working hard for 20+ years, the best I got was to be an exceptional person’s captain. And, only through helping that person was I able to retire early. YMMV.

[shorttime]

I'm sort of with you with housing and education but where I'm in violent disagreement is health. Some are born with a terrible hand and there's little that they can do, on their own, to resolve those issues. It's unacceptable to lose everything for health treatments. People have options with school and housing. People can put forth effort to improve their situation. With health, you can't just get up and move somewhere else to be healthy.

[neuronic]

> And, the truly exceptional are probably out there working their ass off right now, not reading HN.

I think this is where our differences in viewpoints really emerge. I certainly do not want to contest that there are exceptional individuals who fundamentally have a vastly more profound impact on the development of the human civilisation.

However, it seems like you want to assign special conditions and resources to those who, in your view, deserve them - and to them only. Everyone else should take a step back and not demand stuff they haven't earned.

This view is fine, but I disagree that it is realistic or even possible to establish true meritocracies as long as you stand by values of liberalism. You have to take away the individuality of people itself in order to achieve a system in which its inhabitants are content with getting what they deserve. And that is because the meaning of "deserve" is then required to be centrally controlled rather than a subjective viewpoint that is different for 7.5 billion people.

So a Chinese farmer might find they "deserve" the same quality of healthcare as Jeff Bezos simply on account of being human. Others might argue that you should have to work and contribute to "earn" your cancer treatment. Both have merit.

[lotsofpulp]

Due to gains in efficiency and scale, it’s more winner take all than ever before. Look at the public markets, it’s halved in the number of companies even listed on it, and of those listed there’s basically a handful capturing all the gains. The bigger companies will continue to gain pricing power so unless you’re in some regulated niche like doctors, expect to not be in control of your destiny if all you plan to do is work a job.

[watwut]

Isnt that just reflectin of who you talk with? I am pretty sure that 100% of young americans do not plan PhD nor MBA.

[wil421]

The parent poster has a very skewed opinion. My observations are similar to yours, in fact I’m not sure of anyone outside medical professions who did graduate schools right after a bachelors.