A cursory search found that while cars have doubled in real terms (aka after inflation) the safety and durability of modern cars is likely more than double that of a 1970s car.
Getting to 100,000 miles used to be pretty much the limit in the 70s. Now cars regularly last 200,000 miles. Tires last a heck of a lot longer too.
Sooo...if you are frugal like many Bogleheads and not buying a new car very often this might be a wash. Especially with all the new safety and luxury features (like AC and electronic doors/windows even in many base models).
Housing costs more (again about double in real terms) but the average new house was 1525 sq ft in 1973 vs 2435 sq ft in 2018.
Code: Select all
1973 2018 Change Income. $12,050 $73,965 614% Home Price $29,900 $274,500 918% Size. 1,525 2,435 160% Price / Sq Ft $20 $114 582%
https://www.hsh.com/homeowner/average-a ... -home.html
This doesn’t likely hold true in some markets like San Francisco but it seems more or less, if you are willing to go with a smaller footprint, home ownership isn’t any more impossible to consider today than in the 70’s.
The one place that is hugely more expensive between then and now is college education...and crushing school debt coupled with fewer good paying jobs for high school grads. It seems like college is the new High School.
Q: So does it seem reasonable that I can equalize the playing field between then and now by just covering college?
I was planning on doing that anyway but is that enough of a helping hand or do folks believe that the likely economic conditions of 2030s for young families will necessitate planning on more help (say help with a first home down payment) to give them the same odds at the “American Dream” that a young adult in the 1970s would have?*
The financial objective is not too easy but also not too hard as young adults.
The addition to college saving (already funded) is setting aside a down payment for a median starter home in a different bucket and letting it grow in a target date fund. I don’t ever have to give it to them but since I’m finally moving stuff around preparing for retirement vs accumulation it strikes me that the AA might be different since the time horizon is different. Easy to do right now when we feel confident we are financially stable and the time horizon is far enough away that it has time to grow.
They’ll also get a small lump sum (say 10-20K) for an IRA as soon as reasonable.
And that, I think, will be plenty of individual inheritance where anything else is gravy.
* I’ve also talked to them about FIRE and pursuing income for FI and then a passion career after...so hopefully their odds are better regardless...