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December 05, 2012


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Lovely post, FMF!

I totally agree with you.

Yes, way better!

Yes, I personally have benefitted tremendously during this time from the roads, bridges, police, firemen, laws, flu vaccine policy, health care advances, the internet, the post office, rural electrification, environmental protection, public parks, clean air and water, local building codes, emergency storm cleanup, assistance for the poor and infirm, and good public schools for my kids, all provided by the state and federal governments. I do not mind paying taxes to support any of these things.

In the next 4 years, I will also have access to a football stadium for a terrible football team owned as a private business by a very rich man, complements of my local government, that costs local government a massive amount and I and the majority of people here do not want and will never use or benefit from at all, and voted down paying for over and over. And yet here we are, being forced to pay for it. And Even though we paid for the stadium, we would have to pay again a large amount to attend or view any games on TV. Sigh.

Income up ~125%, net worth up ~1000%. I don't have any other election cycles to compare (eight years ago, I was a college freshman), but I don't think changes in government were a factor.

I'm glad you didn't post at all about the election, even with this we're already seeing it morph into something else with MC's post.

Four years ago I had been married one year and still living in Thailand. I had just joined the company I am currently still working for, and was gearing up to weather the downturn. Ironically we are doing the same thing today but it seems smaller in scale than 4 years ago.

My net worth is almost twice as much as it was then, but that is because (like FMF) I make a good salary and save a lot of our income. In the next four years this will continue but not so steep as in the last four years, not that I can envision at this moment anyway.

I can say that my dollars are worth much less than 4 years ago- and that credit goes to both sides of our elected officials who are in cahoots with the central bank to continue to devalue the currency.

Also 4 years ago I was getting 2% on my interest bearing accounts and could get CD's for more than 5%, today things are much worse. Besides real estate in select markets, it is getting harder to have low risk passive income streams.


Nice post!

I hated hearing this question posed in the election, because an individual's private, personal situation can vary so much NOT due to governmental factors. Me, I'm way better: i'm in a better job, I have a better car and apartment, I make more money, and I'm more financially in control. That is not because of or in spite of Obama. Likewise, my mom is worse--her mother died, she got a divorced, and she was diagnosed. Guess what? None of that has anything to do with the government.

I appreciate you trying to stay out of the political arena. You're right: YOU have the biggest effect on your finances. If you're not doing well, don't scream and point fingers at whoever happens to be at whatever level of office. Take control of your own situation. Personal responsibility, right?

**diagnosed with diabetes. I got excited and forgot to end that sentence, ha ha.

I am better off as well because I was in college 4 years ago. Now I have a full time job and save a large percentage of my income and can support myself now and in the future.

I'm better off. I'm 4 years closer to retirememt. And when I look at my portfolio from the market lows of March 2009 to the improvement we see today, then yes, I'm doing lots better.

We are better off than 4 years ago as well. This is a trick question because if you keep working at it, you SHOULD be better off than 4 years ago. That's a lot of time to work on your finance and personal life.
I wrote a post about this a while back and put up a poll.
Nearly 80% of those who responded said they are better off than 4 years ago.

Yes I'm better off. Net worth up ~25%.

I do agree that most people should be better off after 4 years and that its mostly due to their own efforts rather than a politicians from either party.

Yes, I'm $1,273,000 better off than I was four years ago, however no amount of money makes up for being 4 years older when you are 78.

Money isn't everything unless you have far less than you need.

I am better off because I am in a job I love (running my own business) as opposed to one that was making me miserable and taking me nowhere.

From the perspective that the stock market has improved (and thus my retirement account balances have gone up) and the housing market is showing signs of a recovery, I am better off. However, I have not gotten a single raise or bonus in practically the entire four years, so in terms of spending power, I'm way worse off. I don't directly blame the politicians for that, but I know that the success of my company is based on other companies spending, and a lot of that just isn't happening with the economy growing so sluggishly.

I am MUCH better off:
- Net worth has doubled since its high before the downturn (May 2008)
- Net worth has tripled since its low after the downturn (Jan 2009)
- I'm on track to hit $1M in the next 18 months, by the time I'm 40
- I secured my retirement by buying cash-generating assets (rental properties) which will earn me $80k/year (today's dollars) when I'm 67, and $20k/year until then.

I actually don't think this is an issue of politics nearly as much as economic cycles. Politicians are a major impact on those cycles and an easy target for credit/blame, but less than the media wants us to think -- they are just one force amongst many. I control my fate. Thank you for keeping politics out of your posts :-)

What did I do "right" (which is mostly luck)?
- Didn't lose my job in Silicon Valley
- Live fairly cheaply, despite being in Silicon Valley
- Didn't buy a house before the crash
- Held onto my stocks after the crash and rode the stock market back up, rather than selling at the low
- Bought THREE houses in 2010, right at the bottom of the market, which give me cash flow, appreciation, tax benefits, business experience, and a huge sense of pride
- I'm starting a business next year (semi-absentee franchise) which will either bring in more income or lose lots of money... stay tuned!

So, as evil as this sounds, I'd actually claim that this recession has been great for my finances, mostly because I could afford to buy assets (houses) when they're cheap.

Better off than 4 years ago yes.

However, I would be even better off if in the past 4 years I did not have to take a 17% pay cut of base pay the one year,a 20% pay cut of base pay the next year, no raises for 2 years, no bonus for 4 years,no 401k matching contributions for 4 years, health insurance increase in premiums and deductables, anemic earnings on some investments and now my wife is facing what I faced 4 years ago in pay cuts and higher contributions to retirement. These negatives have impacted my networth in over $100k or more in lost opprotunity and investment.

My conclusion is I am better off than 4 years but I am working way harder ,longer and NEED to be smarter to not go backward and it is getting more an more difficult.

Steve D --

You said: "I'm starting a business next year (semi-absentee franchise) which will either bring in more income or lose lots of money..."

Ha! With my real estate ventures, I told my kids that this was what they would remember as either "the start of our real estate empire" or "the beginning of our financial collapse." :)

4 years ago I was married and lost my job 3 months later. Fortunately I was hired within a week at a small company that was better for me financially and professionally. Since then, the company was sold last July and I am now part of a larger corporation. The opportunities now are tremendous and and the salary and benefits have also increased. I'm happier than I ever have been before and very much look forward to 2013.

Regarding politics, I've become mostly indifferent for many reasons, many of which have been stated above. Frankly, sitting and arguing with people about certain topics that neither of us had much control over grew old. While I still do vote, I care very little about politic outcomes and focus all my energy on my career, family, and other things that bring me happiness. Keeping up with politics is a real chore that almost always ends up being depressing.

Four years ago, I lived in a city I hated, with only my wife, no other family and few friends. Now I live in a city I love, with my wife and young son, and my sister and her son sharing our house. My parents, 3 more siblings, and some extended family live within a 10 minute drive. I've got lots of old friends and some new friends in my neighborhood and at church. Even my favorite sports teams are out here. That's a big positive.

On the down side, my wife has been ill for 2 of the last 4 years, with one severe illness she's finally recovered from, and a bunch of minor stuff.

On the up side, our net worth has tripled as a result of aggressive savings 3-4 years ago and great market returns (we bought in within a week of the bottom). We cashed out some of the nice gains to buy a house we've been looking at for nearly a decade, and are turning it into something special.

On the down side, income has been way down this year. We knew it would be due to a planned change from "salary" to "freelance", but it's stayed lower than expected due to illness and moving and working on the house.

So are we better off? I... think so. But it's not a one-sided evaluation.

Better off four years is pertaining to government. Politicians fail to specify this in hopes of getting their vote. Personally we look at how the last five years went and what they would like to accomplish in five and ten years from now. Yes, I'm better off than five years ago.

FMF -- I started my real estate adventure two years ago, with the hope that in 30 years I'll look back and see that as one of the best decisions of my life. So far that's turned out to be true, even better than I expected (easy to manage, already good profits even after only 2 years, lots of tax benefits, and already appreciation on the houses).

I've been reading your blog daily for a number of years, so I was very happy when you started down that road with rentals, and I'm excited to hear more about your properties. I love reading Apex's posts, which are pretty in line with my experience.

Now starting a franchise business... that's going to be a lot more risk, but potentially even more of a game changer if I get it profitable enough that I can quit my corporate job :)

@FMF - Yes, we are better off compared to 4 years ago. On the financial side, Net worth is up ~80%, salary is up by ~50% and spending is under control. On the family side, my relationship with my wife and kids is much better now.

I learned a lot from FMF blog. Looking forward to reading the daily post and comments from the readers.


You are creating a franchise business or you are becoming a franchisee for an existing franchise business? If the latter what franchise if you don't mind sharing?

But will all you millionaires and billionaires (oh, and now everyone making $200K) be better off after you start paying your "fair share?" ;)

FMF, I know where you're coming from and I agree with your post to an extent. But the foundation that once made America the place where anyone can work hard and achieve their dreams is slipping.

People living in Haiti, Greece, Zimbabwe, Venezuela, and plenty of other countries can attest to the fact that it doesn't take long for the government to ruin the economy and everyone's livelihoods.

It often starts with a government "war" against the successful and wealthy. Are we not already seeing that happening in America today?


SteveD brings up a good point. I wonder if you have ever considered becoming a franchisee. It seems like it would be in your wheelhouse.

I am becoming a franchisee for therapeutic massage. My partner and I talked about running a business for a number of years, decided that we wanted to try a franchise since they teach you how to run the business (albeit at a high cost), and shopped around for semi-absentee opportunities (where you manage a manager, rather than run the operation yourself). We looked at a number of franchises, liked this company and their business model, and it seems like something that could do well in our market (there are many spas and massage places, but not many at this price/quality point). We're currently in the phase of finding a location, which is proving to be a challenge in itself, but I'm happy to share more as we go.

Rich --

Yes, I am afraid that the conditions that made it possible for me and millions of others to become successful won't be there for my kids because of crushing government debt and poor fiscal policy. Those are government actions that WILL influence the finances of all of us.

SteveD --

It would be great for you to share your situation as you go along. If you want it to go into more detail and/or seek advice from FMF readers, we could even make it a series.

Mike B --

I have never considered it for myself, but I have thought about it for one of my kids. Buying him a franchise might be a better investment than sending him to college.

@ Wise Pastor. Are you really a pastor?

I am better off than I was 4 years ago. I landed a career in my field via stimulus money that got me away from working at a part time airport job for $10/hr.

In my opinion the stimulus really did what it was intended to do. It gave me along with 39 other recent graduates our first experience in geographic information systems. We produced a vital database that organized information for the CORPS of Engineers in over 20 coastal districts. They can now spend less time on locating maps, charts, drawings and other items and more time engineering, which in turn saves all the tax payers money in the long run.

I have switched companies a few times, but that first bit of experience was key. Many of us still keep in touch and some have bought houses, had kids, etc. I bought a condo which will be my first rental property in less than 6 years. My pay has more than doubled in the last four years. My back doesn't hurt anymore either from throwing baggage :)

@Luis - yes. :)

@JayB., I'm just curious...was your stimulus-funded job meant to be a long-term position or was it a short-term one?

The Congressional Budget Office said that the stimulus, which was estimated to cost $787 billion, will actually come in at $831 billion.

For the second quarter of 2012, the CBO estimated that somewhere between 200,000 to 1.2 million people have jobs they otherwise would not have were it not for the stimulus. Too bad they couldn't be a little more precise! ;)

Assuming, optimistically, that the number is 1.2 million, that means each of those jobs cost taxpayers $692,500.

But as time goes on, the maximum number of jobs sustained by Obama's stimulus declines rapidly because many of these were short-term positions.

So by the first quarter of 2013, it will sustain between 100,000 and 600,000 jobs, according to CBO. If it is 600,000, then each of those jobs will have cost taxpayers $1,385,000.

By the fourth quarter of 2013, the maximum number of jobs actually sustained by the stimulus will be 400,000 - at a cost to taxpayers of $2,077,500 per job.


"I have never considered it for myself, but I have thought about it for one of my kids. Buying him a franchise might be a better investment than sending him to college."

You touched on something that has been on my mind the last year or two. My oldest is only 9 so there is a lot of time for things to flush out but unless the field is chosen wisely I question the value of college for my kids as well.

If they are interested I am hoping I have succeeded enough at real estate to offer them a chance to enter that business with me by that time.

As a funny side note, my oldest is currently wrestling with pro baseball versus pro basketball. He has contemplated that perhaps he could do both. Apparently he thinks he is Bo Jackson if he was old enough to know who that was. :)

My position was meant to last 2 years in which it did.

If your numbers are correct, well, indeed that is scary. But keep in mind, my employer (Northrup Grumman) was charging out all 40 of us at around $125-$175 per hour according to the in government contract specialist that I ended up sitting near (she encouraged me to negotiate pay raises). Now my hourly salary at that time went from $20-$22.50. I understand there were costs of equipment and such, but we were working on site at a government facility, so our locations were paid for! It might be safe to say that Northrop made over $800 per day on every single one of us for two years!

Now perhaps the government should do a better job of dishing out money for jobs, but the fact is, private business is not cheap. The profits some of these companies are making might be what is really costing the tax payers. If the government does not cooperate with the private business's, then we are back at square one, low unemployment, then they are forced to go the other way and create government jobs out of the blue, in which you have larger government/benefits/etc. and many people are still unhappy.

Frankly, I'm not sure there is a winning way in a greedy capitalistic society. I think the government does the best they can to get the ball rolling for the betterment of the majority and I am happy for that.

From a net worth standpoint, I am better off than 4 years ago, but not from an income standpoint. My income has gone down as a result of pay cuts.

While I completely agree with FMFs post, my biggest concern is that what is still true today will not be true in the future. I worry a lot that we are steadily losing our constitutional rights in the U.S. as well as in other so-called democracies.

Apex --

For the longest time my son wanted to be a soccer player in the English Premier League. I advised him that he better have a back-up plan just in case that didn't work out. :)

"The Congressional Budget Office said that the stimulus, which was estimated to cost $787 billion, will actually come in at $831 billion." -True

"For the second quarter of 2012, the CBO estimated that somewhere between 200,000 to 1.2 million people have jobs they otherwise would not have were it not for the stimulus." -True

Reason CBO gave for the impresicion is:

"Those ranges reflect the substantial uncertainty that surrounds the broad economic effects of such policies and a range of economists’ views about the magnitude of those effects." -IOW the most conservative economists' estimations show that the stimulus worked to create more jobs than if nothing was done.

"Assuming, optimistically, that the number is 1.2 million, that means each of those jobs cost taxpayers $692,500." -False. Simple division is incorrect math. Estimates outside the Rush Limbaugh's, AEI, and FoxNews range from 60-100k per job.

"But as time goes on, the maximum number of jobs sustained by Obama's stimulus declines rapidly because many of these were short-term positions." -False. CBO calculates new jobs and jobs that went from part to full time separately for each report. Sharp declines not evident as of third quarter 2012 report.

@Luis, according to a report by the Mercatus Center at George Mason University, which actually interviewed recipients of stimulus money, a number of the jobs were temporary and part-time but were reported as full-time equivalency.

And some recipients were told by federal overseers to count jobs created by taking the total amount of money they were given, divide it by some predetermined per-job salary figure (perhaps that $60-$100K figure you quoted), then report the result as the number of jobs created, whether they had in fact created it or not.


I know that during my stint with the stimulus job, my boss who was the program director made it very specific to us and the main government contact that we had two people per district for 20 districts. Each person was accounted for by not only Northrop but also for the CORPS. The government contact happened to be at my office where the project was led since we have the largest enterprise geographic information system in USACE. He had the opportunity to meet each person who was a part of our system because of clearance issues. The buck literally stopped with him, so I don't think this was a case where they counted jobs by dividing the total project cost by a salary range.

Not to say it couldn't happen elsewhere but this was not going to happen with government oversight with this project or any other that had close contact.

@JayB, I really appreciate you sharing your insights...and I'm really glad it was a great experience and launching pad for you! I wonder, though...if you had government oversight there because you worked for a firm that had a specific government contract? I dunno. :)

Yeah, I'm sure that's why there was such oversight, so a good number to have would be to know how much money went toward government contract stimulus jobs. Right off you would think all of them are government contracted, but maybe not? Not sure. Either way, one would hope there would be oversight in all tax monies spent.

Nope, not better off. In fact, probably worse. In terms of income, definitely worse.

Things were looking hopeful 4 years ago. I really thought I'd find a job. The economy has only grown worse, especially for people like me, with expertise in fields that are over-saturated with few jobs. This economy makes those few jobs even scarcer. The current president has only made it worse for those of us who were already living near the poverty line, by punishing businesses with draconian laws (I'm sure you all can figure out which laws I'm referring to). In turn, businesses won't hire, because they can't afford to, and people like me can't find work.

I went back to college in 2010 for a useful degree. Perhaps things will be better when I graduate with my master in accountancy in 2014. Although, I'm doubtful, given the party in power right now.

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