For the 18- 24-year-olds

By Jim Thompson
HCP columnist

I am 74. The first presidential election in which I could vote was 1972 (when I was 18, we were not allowed to vote yet).  

I likely did not take voting very seriously in 1972. I have learned since then how serious it is and hope I can impart that to a few of you. I know it is a daunting task – what could an old guy like me tell you?

There is leverage in your early years, or as Albert Eistein said, “Compound interest is the eighth wonder of the world. He who understands it, earns it.  He who doesn’t pays it.”  

Stated another way, save early and save often.

Compound interest is eroded by inflation. If you earn 8 percent on your savings, but inflation is 5 percent, you really only earned 3 percent on your savings. It is better than nothing, but not much.

Let’s look at what some things cost when I was 18-24 years old.

Gasoline was about 30 cents a gallon. I bought a new 1973 Camaro (only car I ever ordered from the factory) for $3,300. Payments were $100 per month.  

I bought my first house for $19,000. In a couple of years, I bought an apartment building where we rented two-bedroom apartments for $350, the going rate. It is a beautiful building in Cincinnati at 590 Ludlow Avenue in Clifton. Drive by it sometime, it will be 100 years old next year. I stupidly sold it long ago. I bought it for $103,000; it is worth well over $1 million now.

You probably think those things were cheap. That is the wrong way to look at it. The dollar was more valuable then, and you could get more for your money.

So, if government activity and inflation roll along at the same rate as they have since 1970, let’s see what things will cost when you are my age – 54 years from now.

Gasoline is about $3.50 per gallon today. In 54 years, if you experience the same inflation, it will be $28.34 per gallon. Of course, some of the powers that be want you to be in an electric car or have all cars banned by then. 

I saw a new Camaro advertised online for $41,370. Well, that will cost you $344,985.05 54 years hence.

A “starter” house today in the city is about $250,000. It will be $2,024,323.45 in 2078 (54 years from now). And that apartment that is $2,000 per month now – $16,194.59 per month then.

And let’s add video games (which did not exist in 1970). A $75 video game will cost $2,380.11 in 54 years.

These numbers are true only if you can keep inflation within the bounds it has been for the past 54 years.

I am often partisan in these columns. I am not partisan here. This mess has been caused by a federal government being out of control by votes on both sides of the aisle.  

The only way to fix it is to study the candidates and elect responsible people, which my generation clearly has not done. This is a burden in each election, and now it is your burden, not mine.  

All I have to worry about is enough money to bury me (if you want to see more about inflation, look up the Social Security allowance for funeral expenses, which covered them when this number was established).

Is there another way out of this? Yes. Die early. Actuarial tables say 20 percent of you won’t live to age 70.

Jim Thompson, formerly of Marshall, is a graduate of Hillsboro High School and the University of Cincinnati. He resides in Duluth, Ga. and is a columnist for The Highland County Press. He may be reached at jthompson@taii.com.

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