This is a vastly underestimated component of why owning makes more sense than renting for the majority of the population. Practically, you are unlikely to make more than 2x your starting compensation from school. Rental costs are somewhat sticky at around ~25-50% of your income depending on your preferences. You can save money, and live frugally. But a good chunk of your future disposable cash flow is going to come from fixing your housing costs.
> Practically, you are unlikely to make more than 2x your starting compensation from school
I wouldn’t go that far. I don’t know what my parents made in 1968 or for that matter 2008. But from the time period I mentioned 1978 - 2008, if their income just kept up with inflation, it would have gone up by 650% according to the official CPI calculator (https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=100&year1=1968...).
Well actually, they retired in 2002 at 55 and 57 respectively - from teaching and factory work - and have been retired since then.
They’ve taken two 5 month long cross country trips and have only slowed down their shorter road trips in the last couple of years because they were worried about Covid
I should have specified 2x real income e.g. income indexed for inflation.
If your parents started working in '78 they have likely had a nearly miraculous wealth transfer from owning a home in a world with declining real interest rates. As you noted, their income rose 650% due to inflation - and their housing cost was likely fixed.
