Hardship withdrawals of 401k’s are at an all time high. That shows what kind of shape the average American is in.


https://www.cbsnews.com/amp/ne...hdrawals-retirement/

We are cutting back because we are tired of the rat race which Christmas isn't about. I've already bought mine; a pair of golf pants for work and some fleece lined jeans. I got everything from the outlet mall to save $$$ too.

quote:

Originally posted by 1s1k:
Hardship withdrawals of 401k’s are at an all time high. That shows what kind of shape the average American is in.


https://www.cbsnews.com/amp/ne...hdrawals-retirement/

Article was written last year. (Not saying this year is any different)

In the previous 3 months I've had a significant trend in my business of clients who need our services but cannot afford them.

Historically for the last 6 years I engage and complete about 65% of what I quote, and of the people who call us (having landed from google), if they make it past the initial sticker shock (most people have no idea what professional valuation and market analysis services cost) and call back...we engage 80-85% of those.

YTD gross income for our company is down 237% from last year. I lease professional office space in a 42,000 SF building. Currently the retail space is 65% vacant and the professional office space is about 20% vacant (actually lower than typical). We appraised a large high-rise office tower in Anchorage a couple weeks ago that WF may push into foreclosure, they're 80% vacant and they're primary tenant is reducing their space. Contract or not, they're vacating 2 of the 3 floors they lease. They're a big company and just doing it. There are some crazy things going down in the commercial real estate markets.

It's a complex environment, with multiple reasons for the changes....but yes. The economic indicators are that the average American has twice as much consumer and unsecured debt than they did 12-18 months ago.

True inflation and cost of living numbers can't be hidden much longer. The "crash" is here. Now we'll find out if a true reset will happen or not.

I'd like to add that my fees are mostly unchanged in the previous 5 years. The nature and extent of the services has changed, and for about 2 years, nearly every job was willing to pay any astronomical fee for miracle short turn times. Now I'm getting near-constant requests for lower fees and more economical report options. Last year the requests were for everything to be quoted ASAP, no matter what the costs. If I could do something in 5 business days, I could name my price. Now even purchase transactions are asking for 8-10 week turn times to get costs down.

quote:

Originally posted by sadlerbw:
I’ve been telling folks in my life for a few years now: please don’t get me gifts. I have plenty of shit, and I’d rather go out to dinner with you than get more stuff. I’d rather hang out for a couple hours and catch up than get a present. Some folks still give me stuff because it is what THEY like to do, which is fine, but I’m perfectly happy not to get presents to celebrate birthdays, holidays, or whatever. That’s just me though.

- Bret

My family just gets items off my shopping list. It saves me a bit of time.

The wife and I haven’t really done traditional gift giving for each other in about 10 years. We are at a point in our life we have everything we need, and as long as we recognize the holiday or special day ( birthday valentines anniversary etc) with just a simple card from the dollar store and a shard toast we are fine.
This year my wife did buy me a nice board for display of my collection of shooting competition awards and military challenge coins, but that is not typical. She needed to replace her collection of trail running footwear ( she does a lot of hikes in all sorts of conditions) and told me “ just count this as my Christmas and birthday present ( her birthday is at thanksgiving)

There are far too many people, especially younger, who spend far beyond their means and seem to feel obligated and / or entitled to a lot of things older generations put off until they could pay cash

I think this is a demonstration that American consumers are avoiding discretionary purchases unless there is a deep discount. I’ve noticed that as discount periods have been extended, the extent of discounting has diminished significantly. Honestly I didn’t see anything that o thought was a real bargain this year and didn’t make any Black Friday purchases. Maybe they were discounted over normal, current pricing, but those prices have increased so much in the last couple years that even at discounts they hardly seemed like a bargain. Certainly there are other factors at play as well, but American consumers are pissed about high prices and also feel like part of those higher prices were from companies capitalizing on the inflationary environment to raise prices more than was actually necessary. Accordingly, if they can help it, they aren’t buying unless something isn’t just cheap, but pre-Covid cheap. At least that is what I’m seeing.

Don't want more stuff in our house. I'm getting rid of stuff each week. Got rid of 5 books today at one of those stand-alone libraries. Go through my closet each season and shed what i don't wear.

I absolutely don't want Christmas presents. I will buy my own necessities, not stuff others think I should possess.

Don’t know, don’t care. I rarely spend any cash, outside of bills and necessities, between mid November and the end of January. If I need clothes I’ll go late Jan, early Feb. Every average dip shit is broke, burned all their vacation time, and the credit card bills from consumer holiday product bonanza season are rolling in, hard. In person clothing shopping end of Jan and early Feb, it’s a ghost town, which is my preference. Retailers are never happy with what they made or didn’t make during holiday season. So that means deals are out there at that time. I spend money like anyone else, it’s just always planned out. I don’t go hunting for things to buy.

I happen to believe in God, and Christ, and the Holy Spirit and even though I’m a sinner, and cuss like a sailor, I do believe. And I pray before every meal and make sure God hears my gratefulness of this life, even being here, every day, 5-6 times a day. Buying shit, especially consumer products, and Christmas, have zero to do with each other. So I guess I subconsciously boycott all this bullshit. It’s just the opposite, I loathe the “holiday season” as everyone is out of their mind. Traffic is the worst all year. Doing routine things, like grocery shopping, seeing a doctor, going to the gym, getting my hair cut, is a pain in the ass. Lots of drunks on the road too, way more than usual. Add in tons of drivers smartphone surfing while they attempt to drive, and it’s a recipe for disaster. Highest chances of getting in a wreck all year. Combine all that with inclement weather, well good luck to everyone. Personally I try to stay off the roads as much as possible.

Instead of buying shit they don’t need with money they don’t have, many people should turn their attention to God, Christ, and the Holy Spirit. And if you don’t believe in God, skip it. Turn it all off. But people are programmed. They think these commercials with stockings, a fire, and drinking egg nog, with everyone wearing red sweaters, is real. Commercials are fake. Most of social media is fake. Fake is all around. Don’t believe the hype it’s a sequel.

AK, that is some sobering stuff. Many here have indicated that what you shared is in fact going to happen sooner than later.

You combine things like the binge our country has been on spending money we absolutely do not have.

Consumer debt, high inflation, energy prices, etc.

Things are not looking great and could get significantly worse.

With possibly as many as 70% of Americans living month to month if not week to week.

What happens if those who have $ Lose access to what they have. Then we are truly screwed.

I am wondering how far are from this kind of scenario.

As far as tapped out. I think it is more like being broke.

Credit card debt totaled $1.079 trillion in Q2 2023, up from $887 billion in Q2 2022 — a 20-year high. The average cardholder had $6,568 in credit card debt in Q2 2023, up from $5,963 in Q2 2022.

The line at Dutch Bros is still 10 cars deep every time I drive past. Several people at work go there or to Starbucks 2-3x a day. My guess is the majority racking up credit card debt are doing it to maintain luxury not necessity. $8.00 coffee's, iPhone 17, half a dozen streaming services, two car payments, eating out 2x a day, hair and nail appointments, etc.

quote:

Originally posted by CQB60:
Credit card debt totaled $1.079 trillion in Q2 2023, up from $887 billion in Q2 2022 — a 20-year high. The average cardholder had $6,568 in credit card debt in Q2 2023, up from $5,963 in Q2 2022.

I currently have ~$650 credit card debt. Payday is Friday, at which point I will have +/- $0 credit card debt.

How un-American of me...

On my former business it was off more than 50% year over year.

One if the reasons I took an early retirement.

Still have a year or so of mortgage payments to make but both cars are paid off and $0 in credit card debt.

When the ‘crash’ does come it’s not going to be a soft one.

quote:

Originally posted by Rick Lee:
We don't need anymore stuff. We have everything and so do my folks. Last time they came to AZ for Xmas, the theme was "make it, bake it, or we won't take it." No other gifts allowed. Best Xmas ever. Though it really wasn't as cheap as you'd think. My gift to everyone was I'd cook them any meal of their choice, no exceptions, no expense spared. My mom took this as a challenge and ordered a pretty fancy meal that ran me ragged and cost a bundle. But it was better than having more stuff we don't need.

Great idea!

quote:

Originally posted by echidna:
I don't know: the local outlet mall is packed and the traffic around it is absolutely bonkers. Seems like there is still some gas left in the tank.

As noted previously: They're buying on credit--many buying on credit with balances they're still paying from last Christmas.

What do you suppose happens when they hit their credit limits, stop spending, the consumer economy slows, the entire economy slows, job losses start happening, people stop paying on the credit balances for which they can no longer afford meet the minimum monthly amounts due, and they start defaulting?

Now add to that: Just as in the years leading up to the 2008 recession, people have been buying homes they can just marginally afford and they start defaulting on those loans.

Then consider the fact neither the economy nor the U.S. Government has the reserves it had back in 2008 to bail the whole thing out again.

I went to Palisade CO last August and picked up a few crates of the most delicious peaches I've ever had.
I made jam out of most of them with the intent of giving out jars for presents this year along with some other assorted goodies I and my girl are making.
Other than a few packaging items I've avoided the bullshit consumerism associated with the holiday mania.

Like PHPaul I have 0 credit card debt. May be because I have 0 credit cards. Talk about un-American!
Rod

quote:

Originally posted by ensigmatic:

quote:

Originally posted by echidna:
I don't know: the local outlet mall is packed and the traffic around it is absolutely bonkers. Seems like there is still some gas left in the tank.

As noted previously: They're buying on credit--many buying on credit with balances they're still paying from last Christmas.

What do you suppose happens when they hit their credit limits, stop spending, the consumer economy slows, the entire economy slows, job losses start happening, people stop paying on the credit balances for which they can no longer afford meet the minimum monthly amounts due, and they start defaulting?

Well, duh, but the question in the OP was more along the lines of "are we there yet?".