When it comes to personal finances, every so often I take a look at things over the long term. For as much progress as our family has made paying down debt, contributing 10% of my income to retirement, and the like, from a personal finance perspective it often feels like we're stuck in neutral.
Here are a few examples of how it seems like we're spinning our wheels:
- Income level stagnant – I've heard it said so many times “I'm happy to just have a job” that few complain about not getting raises. I was lucky enough to avoid a salary cut during the recent recession, but haven't had an effective raise in years. After more than tripling my salary from when I first started in the workforce in 1996 to 2005, this is frustrating (even though I *am* happy to have a job)
- Stock market – It seems that the stock market has been stuck in neutral for over a decade. Levels have risen and fallen a lot during that time, but aren't the Dow and S&P pretty close to their trading levels from ten years ago?
- Housing levels – OK, so everybody knows the housing market sucks but how bad is it? Let's put it this way, I bought a condo in 1999. It went up in value over the years, but when I sold it in 2007, it had already started going down in value, and I sold it at 2005 levels, which I was bummed about. Even though I don't live there anymore, I still track what's going on, and I'm pretty sure now it wouldn't even sell for what I paid for it. That's pretty typical around here anyways. So, in other words, housing values are below 1999 values.
I'm still fighting the good fight and keeping my chin up, but every once in a while, it seems like the one-step-forward two-steps-back adage.
The sucky part for me is that most of these ‘neutral' indicators have happened during the prime of my working career, and the same probably holds true for those around my age (mid-30s). In the past, this is where many people would get established financially, but now it seems we can barely keep up from the month before. This could have long lasting repercussions as the effects of this personal finance neutrality will certainly impact us for the rest of our lives.