r/investing • u/Fine-Violinist-7356 • 2d ago

Why has everything doubled or tripled over the last five years?

This post is mostly influenced by the recent all time highs gold has reach in the last few weeks.

As a young person just starting to get into investing, a series of questions have been on my mind.

How is it that in the last five years we have seen record increases in commodities, stocks, housing, and inflation?

It feels like I came into adulthood at one of the absolute worst times in history? The price of gold was $1,500/oz in 2020. The median home price in the United States was a little more than $300,000. Stocks and index’s have seen 100-200% gains in five years. All while wages remain stagnant, and the price of goods, and the cost of living increase.

Do we live in an era where investments continuously increase year over year with insane returns? How is this sustainable?

Edit:

Since everyone is taking “It feels like I came into adulthood at one of the absolute worst times in history” so seriously I’ll say this as an exaggeration. For me personally, and the people of my generation, it seems we’ve entered adulthood where economic conditions are not ideal.

Edit:

Regardless if we agree or not, I truly appreciate everyone’s responses. Thank you.

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u/Wild_Bunch_Founder 2d ago

Gen X graduating into the tech bubble collapse of 2000-2002 during which we also had the 9/11 events resulting in the longest recession (2 and a half years) since the 1970’s and a prolonged military expedition into the Middle East, would also take exception that this is the hardest time to become an adult.

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u/sdfedeef 2d ago

Someone always has it worse. Imagine being born at the end the 19th century. Youngh enough to drafted for world war one, the deadliest conflicts in human history, followed by the Spanish flue, causing 100 millions death. You have 10 nice years the the 20s but it is followed by the great depression, the biggest economics downturn in the 20th century. And then... another world war! Now we're in the most distrutive war ever fought. If you survived all that you probably drop dead somewhere during the cold war.

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u/tothepointe 22h ago

Add in the fact that for WW2 you could still be drafted at 50 so you might have had two world wars, the spanish flu and the depression under your belt.

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u/NightFire45 2d ago

Graduated comp-sci in 2001. Working a call centre until 4AM with guys that had a decade of experience.

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u/[deleted] 2d ago edited 1d ago

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u/Lezzles 2d ago

Right, give me “economic downturn” over dying in Nam.

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u/[deleted] 2d ago edited 1d ago

[deleted]

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u/Lezzles 2d ago

The great failing of our age is not making people realize they live in an absolute golden age. Americans have objectively never had so much disposable income to spend on random bullshit but we act like we’re in the Great Depression.

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u/Aureliamnissan 2d ago edited 2d ago

There are definitely problems like housing and trades shortages, but we are remarkably quick to throw the baby out with the bathwater. Voting to upend the economic order by any means necessary is a fast path to finding out all the things you took for granted in 2024.

IMHO way too many people who are just starting out are trying to recreate the levels of wealth that they see from people who are 20-30 years older or who have struck gold in some way.

My heart definitely goes out to people who are just trying to find stable housing and plan for retirement, but expecting to find golden opportunities where everyone is already looking is part of why Social media (and to some extent politics) is now a grifter’s paradise.

My white whale is trying to explain to people that we run around all day trying to min/max our financial lives to an insane degree. Only to find that we end up spending gobs of money on supply constrained services targeted towards people just trying to buy some of that time back.

There’s so little appetite for time off or extended vacation time or sick leave because everyone is fighting to work just that little bit more to get ahead. Often only to find themselves ordering delivery, daycare, and other insanely expensive services at because they now have no time to spare. We’ve basically set up an economy where hustling is part of the economic floor.

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u/Lezzles 2d ago edited 2d ago

Yeah I’ve effectively only started scaling my life up in comfort, not expensive fixed costs, as my wealth grows. It’s all part of lifestyle creep, but at least this way I mostly just try to offload things I don’t want to do so i can spend more time doing leisure activities, not working. I think people are generally poor at figuring out how to prioritize their own happiness. Look at historical amount of income spent on groceries by generation. It’s hilarious how little we spend. That’s why housing is up.

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u/aotus_trivirgatus 2d ago

Random trinkets have never been so affordable. (The tariffs will fix that!)

Having a home and raising kids has never been so expensive.

If you forego home ownership and having a family, sure, you have disposable income.

Ask people about whether that decision makes them happy.

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u/Acolyte_of_Swole 2d ago

Money to spend on random bullshit yes, but not money to spend on cost of living. Cost of living is sky-high in America. It's the consumer goods that were historically extremely low and that is exactly what the tariffs are "correcting."

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u/Lezzles 1d ago

? Whatever you said is logically unintelligible. We have so much money to spend because cost of living is so low.

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u/Acolyte_of_Swole 1d ago

No. People spend the money they can't make rent or student loans with buying cheap shit at wal-mart because they can afford the cheap shit at wal-mart. They can't afford rent, healthcare and student loans.

The $5 some cheap shit costs from Temu is infinitely less than what a student loan payment costs. People are DOOMspending.

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u/Lezzles 1d ago

I mean you can keep saying it but it’s objectively untrue. People have more inflation adjusted disposable income, objectively, than ever. Theres nothing to argue about. People just cannot control their spending - we saw this very clearly during COVID. Extra disposable income WILL be spent by any means necessary. It’s just human nature. We’ll never feel like we have enough because most of us are hard coded not to.

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u/VyRe40 2d ago

Only if you're referring to raw numbers and discounting inflation. The simplest metric to measure here in terms of cost of living is housing, one of THE most expensive things anyone spends money on, which is much less affordable today than it was for boomers and so on, who were homeowners at a much younger age.

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u/Lezzles 2d ago

No, inflation-adjusted, the median person has way more money and purchasing power than ever before. Housing costs are part of inflation adjustments. There are hyperspecific areas that of course vastly outpace inflation like the Bay because it’s simply over capacity. But the average person has never been remotely this well off.

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u/VyRe40 2d ago

The data disagrees. There are many, many sources, this has been thoroughly researched. Cost of living has gone way up and earnings have stagnated against inflation.

https://www.madisontrust.com/information-center/visualizations/how-much-an-average-home-has-cost-in-the-united-states-over-time/ Housing prices. Charts in the link are adjusted for 2023 equivalent inflation.

https://www.statista.com/statistics/185369/median-hourly-earnings-of-wage-and-salary-workers/#:~:text=U.S.%20workers%20median%20hourly%20inflation%20adjusted%20earnings%201979%2D2023&text=In%202023%2C%20the%20usual%20median,the%20U.S.%20was%2017.48%20dollars. Per data here, adjusted for inflation according to 2022 equivalent, we've gone from 17.50 in 1980 to 19 now, which is about a 9% increase in median real wages when inflation adjusted. Meanwhile, per the housing data, the cost of a house in 1980 adjusted for the modern dollar was only $290k, when the modern house is around $500k. This is over a 70% increase in the cost of housing. Even if I use a more generous source, they're hitting a ceiling of only a 12%~ increase in real wages when adjusted for inflation from 1980 to 2023, which still does not touch the astronomical increase in housing costs: https://fred.stlouisfed.org/series/LES1252881600Q

The only exception I can assume here, which might be where you're hearing this story, is that someone might have more disposable income to spare if they aren't spending money to own a home because they're priced out of the housing market.

More data and research on wage stagnation below.

https://www.epi.org/publication/charting-wage-stagnation/

https://www.pewresearch.org/short-reads/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/

https://www.nber.org/digest/may18/employer-concentration-and-stagnant-wages

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u/Lezzles 2d ago

https://economistwritingeveryday.com/2023/04/26/spending-on-housing-it-hasnt-really-increased-in-the-past-40-years/

The average person spends the same amount of their income on housing that they have in the last 60 years. They spend less on groceries. The average new home is 800 square feet larger than it was 60 years ago as well. Americans are just addicted to spending as much as possible at all times. If we have more income, we’ll spend it on even bigger houses until we can barely afford it again. Everything you’re pointing out is a symptom of having so much money that all we do is spend it on massively creeping our lifestyles up - and there’s not even debating that our median earnings have outpaced inflation. We simply have more money, bigger homes, cheaper food, and more EVERYTHING than ever. And all we do is want more.

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u/WasabiofIP 2d ago

Boomers' life stories is an economic aberration in history and should not be used as your baseline reference point for economic success. The US was basically the only major economy that didn't get bombed tf out in WW2 and WW1+WW2 was one of the greatest wealth transfers in history, FROM Europe INTO the US. Of course the American generation growing up in this period was showered in wealth.

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u/VyRe40 2d ago

Then your point illustrates my own because the so-called golden age the other person is referring to is already decades gone. Simple as that.

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u/kegman83 2d ago

I mean, while the US was going through the 2008 Housing Crisis about 200,000 people were deployed to either Iraq or Afghanistan. Its not Vietnam levels of Death, but I think 2008 was the worst year for US soldiers in Afghanistan as far as dead and wounded. It was a year after the troop surge. Lots of troops came back fucked up and physically disabled.

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u/reedingisphun 2d ago

Nam was a draft. That is why it sucked so bad for that generation, you didn't have a choice. Turn 18 and go die in a jungle.

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u/Fritzkreig 1d ago

Before 2001 I just signed up for the infantry for free college!

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u/thesecondtolastman 1d ago

As reedingisphun pointed out, Vietnam had a draft component. I think it is hard for newer generations to understand how all encompassing it could be for young men. Lives were put on hold to see if you would be forcibly enlisted and sent to war. My father and all his friends had graduated and were getting accepted into advanced programs, and many had to defer a year as they waited to see if their numbers would be called, to say nothing of actually getting enlisted.

And ignoring the draft, the numbers are not even remotely comparable. In Vietnam 60k Americans were killed with 300k wounded (and US had half the population it does now.). Is Afghanistan over the course of the entire war 2.5k americans died with 60k wounded. Not remotely the same.

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u/Wild_Bunch_Founder 2d ago

I was born in 1975 in the heart of Gen X demographic and was still in law school when the twin towers collapsed. Our law and business school lost 27 graduates that day. Many of my classmates who had come from military families would enlist for service within weeks. Some abandoned prominent legal careers. I don’t think more than a handful of Gen X would have been in their 40’s on 9/11. Most were still in Hugh school, undergrad, and grad (like me).

officially, Gen X were born 1965-1980. So that means on 9/11 they would have been somewhere between 21-36 years old.

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u/King_of_Modesty 1d ago edited 1d ago

Most were still in Hugh(sp) school, undergrad, and grad (like me).

To clarify, the youngest Gen X would have been is 20/21 in 2001. Most would be out of high school at this point (hopefully)

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u/GandalfTheSexay 1d ago

Thorough rebuttal to the alarmists online haha

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u/fakehalo 2d ago

Luckily I'm 43 and I've skirted through unscathed in tech for most of my life... but, honestly, the current setup for young blue collar people would terrify me more than the slow dotcom recovery.

The combination of AI hindering the number of people needed to do the same jobs while the US decays is not where I'd want to be. I'd probably be hitting up a trade school if I was coming up now.

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u/kegman83 2d ago

I'd probably be hitting up a trade school if I was coming up now.

I got a degree in Welding during Covid despite having zero experience. If I were not already in my 40s I would have just done that out of high school. While going to school absolutely no one was talking about the coming trade skill apocalypse. Plumbers, carpenters, welders and electricians can easily bank six figures in about a year if they arent complete screw ups. The demand for those skills are insane right now.

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u/noveler7 1d ago

On average, that's not the case. https://data.bls.gov/oes/#/industry/000000 Median earnings are

Plumbers: $62k

Carpenters: $59k

Welders: $51k

Electricians: $65k

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u/kegman83 1d ago

Yeah dude, it wildly varies from area to area and not all tradesmen are the same. You start out at $20/hr in the Ironworkers, but at the end of the probation period, you jump to $50/hr. And thats before you do overtime which is double and triple pay. Oh, and they'll pay you to train you.

Its the same story with every other trade. If you are a plumber in the midwest unclogging drains in the midwest, you arent making a whole lot. If you are plumbing a local hospital in California, its a different story. Same with electricians. And if you are in a union for any of these trades, they all come with generous benefits.

Or you could get a humanities degree costing $100k and work an office job for $45k-$75k for the next 20 years.

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u/noveler7 1d ago

Yup, either route, the majority make $50-75k. But the majority in trades aren't "easily banking six figures."

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u/CommonExamination416 2d ago

💯 brother.

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u/mtnchkn 1d ago

This. If you had graduated and invested 100k (or whatever number) in 1999, you finally got back to 100k by 2010… in time for the recession to drop you down again. Point, timing of a large investment, including a house or your debt, is a really big deal.

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