Unsure if the "cycle" is a self-fulfilling prophecy and proliferated in the belief that good times and bad times are always the way our markets work. I don't pick individual stocks anymore; I stopped that years ago. I invest in broad low-cost index funds.

Aside from that: I can't help but look around and see, what I consider, absolute fiscal insanity and spending everywhere. They are just basic observations that, maybe right, maybe wrong, I haven't seen so strongly before. I can elaborate much more but want to keep these brief to make my points. I also want to say I fit into some of these generalizations below. I also work at a long established more fiscally conservative company. I personally tend to be less adventurous fiscally and not over-extend and plan for downsides as much as I do upsides.

1. Look out the window and can't believe how common It is to see a Tesla, which all on the road today (including Model3) are a minimum of around $55K+. Add in any luxury car $50K+.

2. Look at housing markets in Texas. I am in Austin. Neighborhoods where people who have 401Ks are running $450K-$700K easily. There are plenty of $700K homes and up and the supply is "tight". Forget texas though: read about anywhere not in the mid-west.

3a. Soft-skill jobs (generalizing here...don't yell at me) are crushing it with close to or above 6 figures and bonus/commission on top of it. Meet a lot of younger folks through wife that have no experience doing anything but talking in a meeting bringing home $100K and looking for better!

3b. People are leaving jobs proactively to look for better with nothing lined up. I recall the number was 650,000 last I read.

4. Places that are considered service industry are getting hit by 3b above and can barely staff effectively with $12-$15 hr jobs. I read either prices jacked up or hours minimized because of of slow business.

5. Prices for entertainment: similar to above but when did getting food from a truck end up being $12-$15pp?! I know many go belly up in short time, but restaurants and eating out have gotten very expensive. Lobster truck downtown $19 for a roll.

6. Folks traveling. People I know are vacationing all over the place and spending massive amounts to do so. Never before recall so many visiting domestically and internationally as frequent.

7. Seen so many terrible, terrible, and I mean terrible biz startups/expenditures. My wife's company acquired by larger company. Her company has to be losing thousands $$& a day and has a bad business model. It is clear as day and she admits this: selling ice to eskimos but the checks keep getting signed.


Anyone else have thoughts here?

https://qz.com/1364993/its-official-were-in-the-longest-bull-market-ever/amp/

I have similar thoughts living in N. Dallas. It costs a small fortune to take my family to a nice restaurant. Used to be something we did about once per month but prices are totally out of control. But people are paying those prices.

My thoughts...

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1. Look out the window and can't believe how common It is to see a Tesla, which all on the road today (including Model3) are a minimum of around $55K+. Add in any luxury car $50K+.

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We live in a world where trucks and SUVs now are $50k - $100k, and people are buying them up. Cheap interest rates, long-term financing, and just reliability in general allow many to justify an insane amount on a new SUV for the tots to destroy. Couple that with the fact that majority of Americans aren't saving for retirement and live paycheck-to-paycheck, and it will come crashing down for them sooner or later. I'm just as happy in my $9k Maxima I paid cash for...and I'm a car guy.

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6. Folks traveling. People I know are vacationing all over the place and spending massive amounts to do so. Never before recall so many visiting domestically and internationally as frequent.

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Airfare is cheap if you're patient. Wife and I flew round trip from IAH to CDG on American for $500/person earlier this year. Tickets to go visit her sister in New Jersey this summer weren't much cheaper than that. You're going to pay a hotel regardless of where you go, so travel there is the next biggest expense. If you can find a deal, why not go visit another country?

Not saying people shouldn't travel or find good deals.

Im just observing it appears to be something more and more people are able to afford and/or indulge. Part might be prices. More might be tied to this massive optimism in the economy and outlook.

aTm2004 said:

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Airfare is cheap if you're patient. Wife and I flew round trip from IAH to CDG on American for $500/person earlier this year. Tickets to go visit her sister in New Jersey this summer weren't much cheaper than that. You're going to pay a hotel regardless of where you go, so travel there is the next biggest expense. If you can find a deal, why not go visit another country?

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Wife and I are going DEN to CUN in a month, and while I booked it on points, I still watched it (in case it dropped, I'd rebook, SW)

It got as low as $69 going there on frontier and $109 coming back on SW.

Also, I'm convinced that when summer vacations come around (wife in education), our family trips will be tues/tues or wed/wed if possible. It's crazy how cheap flights are on those days compared to typical fri/sat/sun flights.

I flew my family of 4 DEN to IAH earlier this year for $27/ea (a wednesday flight). If I drove to Houston, I'd spend twice that much in gas.

Flexibility pays for sure.

https://www.bloomberg.com/news/articles/2018-08-21/longest-bull-market-in-history-comes-with-jumbo-sized-asterisk

Anyways, I just think the economy is doing really well. It's not necessarily too good to be true and it very well could last for many more years to come, but it won't last for ever. Generally speaking, the next time we reach this part of the business cycle will be better than this and the next will be better and so on. That's what economic expansion and development is after all.

evan_aggie said:

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Not saying people shouldn't travel or find good deals.

Im just observing it appears to be something more and more people are able to afford and/or indulge. Part might be prices. More might be tied to this massive optimism in the economy and outlook.

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It's both, IMO. Some people love to travel and can justify thousands a year on trips, others may not. Everyone has their hobby/vice that they spend money on and can justify regardless of how silly. We normally go visit family for vacation and drive to minimize costs, but we do plan on a "big" trip every few years that we budget for in advance.

Wife has a friend that makes 3-4 international trips per year, and she does it because she doesn't care which airline she flies on to get there, and has a job that allows her to take a week off at the drop of a hat, so if she finds a good deal to Hong Kong leaving tomorrow morning, she'll book it for cheap and take a few days off (she actually did this earlier in the year and only missed 2 days of work). She also buys everything on an AE platinum card so she's able to travel on points quite often. Couple that with driving the same car she had in college, and she has a lot of flexibility and financial freedom many don't.

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Also, I'm convinced that when summer vacations come around (wife in education), our family trips will be tues/tues or wed/wed if possible. It's crazy how cheap flights are on those days compared to typical fri/sat/sun flights.

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This. My wife was a SAHM for the past few years and just went back into teaching this week, so when we would fly, we would often fly in the middle of the week due to prices. Hotels are usually cheaper during the week vs the weekends as well. This will be our plan going forward as well.

I wonder if it's just that people eating out and vacationing is more visible nowadays with social media. Folks are eager to post their whereabouts to humble brag.

That is part of it, but the ease of borrowing and money "flowing" in my opinion is manifesting itself in very visible ways in general. But yes, that certainly is making it more obvious.

aTm2004 said:

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Also, I'm convinced that when summer vacations come around (wife in education), our family trips will be tues/tues or wed/wed if possible. It's crazy how cheap flights are on those days compared to typical fri/sat/sun flights.

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This. My wife was a SAHM for the past few years and just went back into teaching this week, so when we would fly, we would often fly in the middle of the week due to prices. Hotels are usually cheaper during the week vs the weekends as well. This will be our plan going forward as well.

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I was talking more about week long vacations, so hotel is same either way. But yes, doing a monday-friday would def. save on flights and hotels.

Check the per night rate next time. I've been at hotels where I've been charged less per night Sun-Thurs than Fri-Sat. Vegas does this for sure, and so have the hotels in NYC I've stayed at, even though it's a continuous stay. When you book, you may see a rate per night which is probably an average rate.

evan_aggie said:

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Unsure if the "cycle" is a self-fulfilling prophecy and proliferated in the belief that good times and bad times are always the way our markets work. I don't pick individual stocks anymore; I stopped that years ago. I invest in broad low-cost index funds.

Aside from that: I can't help but look around and see, what I consider, absolute fiscal insanity and spending everywhere. They are just basic observations that, maybe right, maybe wrong, I haven't seen so strongly before. I can elaborate much more but want to keep these brief to make my points. I also want to say I fit into some of these generalizations below. I also work at a long established more fiscally conservative company. I personally tend to be less adventurous fiscally and not over-extend and plan for downsides as much as I do upsides.

1. Look out the window and can't believe how common It is to see a Tesla, which all on the road today (including Model3) are a minimum of around $55K+. Add in any luxury car $50K+.

2. Look at housing markets in Texas. I am in Austin. Neighborhoods where people who have 401Ks are running $450K-$700K easily. There are plenty of $700K homes and up and the supply is "tight". Forget texas though: read about anywhere not in the mid-west.

3a. Soft-skill jobs (generalizing here...don't yell at me) are crushing it with close to or above 6 figures and bonus/commission on top of it. Meet a lot of younger folks through wife that have no experience doing anything but talking in a meeting bringing home $100K and looking for better!

3b. People are leaving jobs proactively to look for better with nothing lined up. I recall the number was 650,000 last I read.

4. Places that are considered service industry are getting hit by 3b above and can barely staff effectively with $12-$15 hr jobs. I read either prices jacked up or hours minimized because of of slow business.

5. Prices for entertainment: similar to above but when did getting food from a truck end up being $12-$15pp?! I know many go belly up in short time, but restaurants and eating out have gotten very expensive. Lobster truck downtown $19 for a roll.

6. Folks traveling. People I know are vacationing all over the place and spending massive amounts to do so. Never before recall so many visiting domestically and internationally as frequent.

7. Seen so many terrible, terrible, and I mean terrible biz startups/expenditures. My wife's company acquired by larger company. Her company has to be losing thousands $$& a day and has a bad business model. It is clear as day and she admits this: selling ice to eskimos but the checks keep getting signed.


Anyone else have thoughts here?

https://qz.com/1364993/its-official-were-in-the-longest-bull-market-ever/amp/

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1. Long term financing has made stuff like this more possible. Don't disagree it can be crazy, but people like there cars, extremely if they commute alot.
2. Are you talking brand new houses or people buying into neighborhoods? Here in Denver the area i'm in all the house are 500k+ just due to location even if they look like they're about to fall down just because of proximity to down town. Many have lived here for a long time so they didn't actually pay that crazy price. Many that due are older or moved from out of state on the recent side. There are also tons of investors who bought houses when the market was down and there are a decent amount of rentals. It's becoming a big thing in areas that were traditionally bought.
3a Seems like a crazy generalization/based off a few people you know. I know a bunch of people with hard tech skills that don't make 100k. Sure there are probably some over paid that are doing the standard story you hear about boom/bust of O&G and not saving, but for every 1 salary you just pointed out there are tons that are baristas or making 40k trying to look like they make more.
3b. I've seen this too and it blows my mind. I usually assume parental support from the few i've seen.
4/5 Food cost are definitely out of control. It blows my mind how much it cost, granted we didn't go out much as kids. Im going to assume that lobster was flown in today and thats why its so much . But yeah the amount of meh food/beweries blows my mind.
6. I found this really interesting on personal loans the other day
https://www.foxbusiness.com/personal-finance/americans-use-loans-for-these-surprising-expenses
7. I know nothing about this.

My guess is some of this is normal cycle, some of it is just more visible with the internet/social media. There will eventually be another loan bubble, my guess either car or student loans. Too many millenials still rent for their other debts to catch up to them on the housing side. Fun discussion.

aTm2004 said:

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Check the per night rate next time. I've been at hotels where I've been charged less per night Sun-Thurs than Fri-Sat. Vegas does this for sure, and so have the hotels in NYC I've stayed at, even though it's a continuous stay. When you book, you may see a rate per night which is probably an average rate.

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Maybe you're not following me.. I'm referring to staying at a hotel for 7 nights.
yes, the rate is cheaper during the week, but if you stay 7 nights, it doesn't matter when you check in/out, since you are staying all 7 nights of the week. So it will be the same no matter when you check in/out.

For stays shorter than 7 nights, absolutely you will save money on a mon-wed stay compared to fri-sun.

62strat said:

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aTm2004 said:

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Check the per night rate next time. I've been at hotels where I've been charged less per night Sun-Thurs than Fri-Sat. Vegas does this for sure, and so have the hotels in NYC I've stayed at, even though it's a continuous stay. When you book, you may see a rate per night which is probably an average rate.

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Maybe you're not following me.. I'm referring to staying at a hotel for 7 nights.
yes, the rate is cheaper during the week, but if you stay 7 nights, it doesn't matter when you check in/out, since you are staying all 7 nights of the week. So it will be the same no matter when you check in/out.

For stays shorter than 7 nights, absolutely you will save money on a mon-wed stay compared to fri-sun.

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No, I am following you and understand exactly what you're saying. I'm just pointing out that rates differ depending on the day of the week for those who aren't aware.

Haha. Y'all crack me up. You are free to post/discuss as you like! Funny that this turned into a vacationing/best deal on hotel/flight debate.

Some of the things mentioned explain why the economy isn't too good to be true. If you can get paid more for a cush job or quit a job without having another in hand, it is a sign that the economy is strong.

If people are buying more things and paying more for it, it can be a sign of a good economy or that they are accruing debt. Debt levels are higher, but asset levels are as well and at a greater percentage. Overall debt obligations are better now than they have been in 40 years.

I do think that we are spending too much and on dumb things, but is doesn't mean that it is due to a false economy.

this seems more like a thread about observations on where you live than anything else.

OP I agree with most of your points.... I think most people are in debt up to their eye-balls & think the good times will continue on forever. Especially the younger folks (upper 20's, low 30's) who are finally making good money and haven't really experienced a major downturn.

It is insane to me how much money people spend.... I do agree social media has a huge impact on this and the visibility it provides.

Maybe it's a Houston thing but we've definitely seen a downturn in recent history.

POW said:

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OP I agree with most of your points.... I think most people are in debt up to their eye-balls & think the good times will continue on forever. Especially the younger folks (upper 20's, low 30's) who are finally making good money and haven't really experienced a major downturn.

It is insane to me how much money people spend.... I do agree social media has a huge impact on this and the visibility it provides.

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I think the DINKs also played a role in it. People waiting to get married/have kids have more disposable income obviously. There was an interesting article in the last year or two about how few managers are marrying secretaries too, which years ago was a way for people to increase their class status. It's easier now than ever for people to meet/date people of their own class. (outside of the hot scale, it makes sense you'd want to date someone similar education).

Once my gf/eventual wife graduates we'll have a masters in analytics and phd in biomed engineering between the 2 of us, both under 30. Obviously not typical, but couples like this are more common and I'm sure if you live in a nice area you're more exposed to this side than the social worker and marketing girl who both struggle to pay their cheap by denver standards rent who live above me in my current duplex.

This next recession around the corner will cull out many of the extravagant observations mentioned in the original post.

evan_aggie said:

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That is part of it, but the ease of borrowing and money "flowing" in my opinion is manifesting itself in very visible ways in general. But yes, that certainly is making it more obvious.

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I think it's both.

Person A has more access to credit, so they can buy more things. Now, because of social media other folks see those things and think "I want that". They have more access to credit, so they can buy those things and it just keeps going.

It's not just keeping up with the Joneses - it's keep up with the Joneses without realizing the Joneses can't afford it either.

Not sure if I agree with your point about younger folks not experiencing a major downturn. I am 31 and graduated in May 2009 which was during the middle of the recession. Most of those others would have experienced the same downturn.

I would fall into the group taking extravagant vacations, but those have been almost completely paid with credit card sign-up bonuses. Not sure if the people you are seeing are doing the same, but there is a pretty active community that takes advantage of this and they seem to be younger people. Most people think I am an idiot when I tell them I have 14 credit cards, but I have zero credit card debt and have credit score of 800+.

I'm in your boat.

I'm currently putting everything into garden.com.

Stop supplementing restaurant employment costs

I know at my place of work there are a number of single under 30s saving huge sums of money living with roommates and driving old cars and they graduated debt free. I think there are a lot of people out there saving too.

POW said:

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OP I agree with most of your points.... I think most people are in debt up to their eye-balls & think the good times will continue on forever. Especially the younger folks (upper 20's, low 30's) who are finally making good money and haven't really experienced a major downturn.

It is insane to me how much money people spend.... I do agree social media has a huge impact on this and the visibility it provides.

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The upper 20's low 30's people you refer to generally spent the first 5-8 years of their adult lives struggling to find a decent job in an extended poor job market. My experience is these are the ones doing the most saving these days, because they're afraid of going back to that.

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this seems more like a thread about observations on where you live than anything else.

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This. Your Tesla comment is probably more perception based on where you live, work, places you frequent, and who you hang around with than it is of reality. Approximately 17.1 million cars were sold in the US during 2017. Approximately 50k were Tesla's. Outside of the wealthier intown and suburban neighborhoods of major metropolitan cities you would probably see very few if any Tesla's.

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Im just observing it appears to be something more and more people are able to afford and/or choosing to indulge

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FIFY

I've come to the conclusion that knowing generally what people might make in income with their jobs and how they live...if it appears out of balance it's either 1) family money or 2) ridiculous debt or 3) spend everything they make/no savings or retirement plan

I think my main observation, is that the positive outlook and sentiment stemming from this bull has really translated into a lot of purchases and money expenditure.

I didn't even include home remodeling, which I have fallen to myself! Financially, we aren't taking out loans or draining any 401k or significant savings to accomplish it, but I probably would not be spending it if the market took a dump. It goes hand-in-hand with the perception and outlook.

Things are starting to feel oddly creepy though: not trying to be a Nostradamus here, but something seems amiss when I compare my fiscal behavior with what seems normal now. My wife and I have no car payment, no school debt, no cc debt. We have 401k, and IRA, and savings, blah blah. We do have debt: home...which I struggle to at times to forgo paying exclusively more on vs saving (because i know that technically our market savings are supposed to be 7%+ >> 4% mortage).

From reading your description...your fiscal behavior, while admirable, is not normal.

I would agree that there are way too many people that live beyond their means at the expense of savings, but I don't think that is a new phenomenon. It's been that way since I've been alive.

Interesting while this thread is continuing on the S&P 500, 400, 600, Nasdaq, and Russell 2000 have all made new all time highs today and will most likely all close at all time record highs.