
rsm
Well-known member
You make some extremely good points, a lot of younger people aren't willing to sacrifice small but expensive pleasures.
But also look at the data. There are fewer decent paying jobs. The middle class has been shrinking for decades as a result. Look at the cost of a new home, avg 400k. That's a minimum monthly payment of about 2300 bucks on the very lowest end. Factor in a car payment, say $500/mo, plus gas, groceries, auto insurance (which has gone nuts also), utilities, etc and what's left of an average American income of 40k? Not much. Can it be done? Sure but the deck is increasingly stacked against you. You can do it, but you will be house poor for 30 years, assuming you don't lose your job, or have the house market crash in which case you're now upside down on your mortgage, owing more than it's worth. Seen that too.
NAFTA and the wholesale gutting of US manufacturing took decades; Trump is trying to bring it back with limited success, but it's only temporary at best. You can't undo decades of destruction at the infrastructure level (modern factories, knowledge, experience, skills, etc.) in a few years...I think it's valiant effort but doomed to fail.
I'm looking at different areas to move; sell this place and buy a new place. If my house is paid for when I die, I can leave it to my son, and leverage stepped-up basis:
Example: If I bought the home for $200,000 and it’s worth $600,000 when I die, my child’s basis becomes $600,000. If they sell it for $610,000, they only owe tax on the $10,000 gain.
tax-free gifts are limited to $19K per year per person per recipient. That's not helpful for a house down payment. I can also structure a family loan, co-owning through an LLC or trust, or buying and renting it back to him, etc. to help him get his first house, etc. There are ways to make this happen. this is part of the whole trust fund investigation I'm working on, to leave money to my son, but protect it from his carelessness and future divorces.
