Today is Senay's 18th birthday! That's a big one. Maybe the biggest. She can now legally vote, buy cigarettes, go to Las Vegas, join the military, get married, and get a tattoo. There are three "big" birthdays in addition to your 18th. At age 16, you drive; at 21, you can drink; and at 65, you can get Medicare. After 65, there are no more big birthdays. Except maybe your hundredth.
She wants a chocolate chocolate birthday cake and a new pickleball paddle. We are visiting Pittsburgh to see Grammy and Pop next week, one of Senay's birthday wishes. We have gotten Grammy into pickleball, so we'll do that daily. We will also go to a local waterfall, bake a pie, go to a movie, go to an escape room, have a campfire, play ping pong, and play shuffleboard (to name a few).
You often hear, "Time goes so fast." I feel like Senay has been in my life forever, and I have difficulty remembering when she wasn't a part of it. When does life start going faster?
If you are reading this, chances are you are between sixty and seventy-five years old. Today, we embark on a fascinating financial time travel adventure going back sixty-five years to 1959. Buckle up, and let's explore!
In 1959, the median home price of $12,500 was about 2.5 times the median annual income. Today, that number has ballooned to over six times income. Housing affordability is one of the most significant financial issues we face today.
While 1959's mortgage rates were lower (around 6% vs. 7%+ today), they often came with shorter terms (15-20 years) and hefty down payments (upwards of 40%). Today's longer terms (30 years) and lower down payments (around 20%) make homeownership more accessible, but they also allow people to buy houses without the money to pay for them.
Do you remember how much your parents paid for their house?
Imagine filling your tank for a couple of bucks. A gallon of gas in 1959 cost around 25 cents, compared to today's national average hovering around $4. This significant increase is partially due to the oil crisis of the 1970s and ongoing geopolitical factors.
A pound of ground beef cost around 30 cents, while a gallon of milk was about 50 cents.
While a 30-cent hamburger and a 50-cent gallon of milk might sound like a great deal, you must look at inflation to get a better perspective.
A dollar in 1959 had the same buying power as $7 today. This means:
A 30-cent hamburger translates to roughly $2.10 in today's dollars.
A 50-cent gallon of milk translates to roughly $3.50.
Also, the median income for families in 1959 was around $5,400.
The minimum wage was just $1 per hour.
A first-class postage stamp cost four cents.
A movie ticket was fifty cents.
The average price of a car in 1959 was $2,500. Seat belts weren't standard equipment. Lap belts started becoming more common, but shoulder belts were virtually nonexistent. Air conditioning, power windows, and other features we take for granted today were mostly absent. Safety was not seen as a priority. There was a five times greater chance of dying in a car accident.
The first credit card, the Diners Club card, was launched in 1950, but the 1950s saw a surge in credit card use, forever changing consumer spending habits. Back then, it was actually required that you pay your balance at the end of the month.
Color televisions were still a luxury item, and most households relied on black-and-white sets for entertainment.
Landline telephones were the primary means of communication, often shared among multiple families in apartment buildings.
Our whirlwind tour through 1959 has been a fun reminder of how much things have changed. While the lower prices might seem appealing, it's essential to consider the economic context of the time. Even the wealthiest people lived at a lower standard of living than the middle-class today. It’s easy to look at the past through rose-colored glasses, but consider this: the average life expectancy in 1959 was just 69.7 years, compared to 78.7 years today. Plus, imagine living in Florida without air conditioning!
Be Blessed,
Dave
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