I was looking at housing prices over time and since the 60’s its been like only up its wild. However it dawned on me that its not all too dissimilar to other price increases Today we will compare the increase in price for a few common things.

  • Houses in america
  • Index funds (snp500)
  • Gold/oz
  • Us Dollar
  • Federal minimum wage
  • Average Minimim wage
  • Public College tuition
Year Houses (avg) Index funds (snp500) Gold Dollar Federal minimum wage Average minimum wage Public College tuition
1963 $19,300 $65 $35 $1 $1.15 $1.15 $243
2023 $516,300 $3,960 $1,990 $9.91 $7.25 $9.98 (2022 numbers) $9,349
How many x over 60yrs 26.75x 60x 56.8x 9.91x 6.3x 8.67x 38.5x

From this chart, a few things become apparent

  1. Federal minimum wage underpaces the dollar
  2. Average minimum wage tracks the dollar fairly well (real 2023 numbers are a bit higher)
  3. People should be complaining more about the price of index funds and gold rather than houses or college

To me the increase in cost of different items seems a bit overblown. If you want to buy the average house or go to an average college, it will cost around 4x more compared to someone making an average minimum wage in the 60’s. This is an average however. If you’re in a state with low minimum wage and high housing prices, well that sucks. If you’re in a state with low housing prices and a good wage, it’s still harder than it was, but it’s not impossible. The price of other things like oranges and milk have also increased too, but to a lesser extent. In theorey minimum wage might need to be higher if you wanted to have everyone with the same “just buy a house” mentality that seems somewhat prevelent 60 years ago. However, it seems much easier for the individual to work harder to beat the increase in price, rather than trying for many years to 2.5x the minimum wage across the board.

What am I doing to try to beat this

  1. Dont go to an insanely priced college (Look for good scholarships, any SAT above 1420 gets almost free tuition to UAlabama)
  2. Going to college for something that gets paid more than average (Either Compsci/CompEng or other engineering for me)
  3. I’m starting to put money into investments earlier. Snp500 (Schwab SWPPX) aint a bad invesetnment (60x over the past 60yrs). Schwab allows automatic investing, easy for dollar cost averaging, compound intrest is your friend.
  4. Trying to live somewhere not as expensive. I want to build a calculator that takes whatever degree/experience you have, and with BLS data tells you where you can have the most left over money in your savings account at the end of the year accounting for
    • Average rent
    • Average food
    • Taxes
    • Gas Prices
    • Misc

https://fred.stlouisfed.org/series/ASPUS

https://www.multpl.com/s-p-500-historical-prices/table/by-year

https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart (selecting without inflation adjusted)

https://www.usinflationcalculator.com/

https://www.dol.gov/agencies/whd/minimum-wage/history/chart

https://docs.google.com/spreadsheets/d/1CColciDVj2OB4zKD6Yj5TQV9wWHgkQ3bk3X6xxWhXrE/edit?usp=sharing (select all wages and average)