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A guy and his friends shared their travel plans. The results perfectly explain the wealth gap.

What on Jeff Bezos's green earth did we just watch?

TikTok/@tcruznc

Sometimes you see something so mind-boggling you have to take a minute to digest what just happened in your brain. Be prepared to take that moment while watching these videos.

Real estate investor and TikTok user Tom Cruz shared two videos explaining the spreadsheets he and his friends use to plan vacations and it's...well...something. Watch the first one:

So "Broke Bobby" makes $125,000 a year. There's that.

How about the fact that his guy has more than zero friends who budget $80,000 for a 3-day getaway? Y'all. I wouldn't know how to spend $80,000 in three days if you paid me to. Especially if we're talking about a trip with friends where we're all splitting the cost. Like what does this even look like? Are they flying in private jets that burn dollar bills as fuel? Are they bathing in hot tubs full of cocaine? I genuinely don't get it.


To be crystal clear here, the top 5 friends on the Forbes list are willing to spend more than double what the guy at the bottom of the Welfare 10 list makes per year on a 3-day guy's trip. I don't know what to do with this information.


But that's not even the full spreadsheet. It might make sense if this guy was just rich, had always been rich, only knew rich people, and therefore having multiple millionnaire friends was his normal. Surely that's some people's reality who were born into the 1%.

That's not the case here, though, because Cruz also has a Welfare 10 list. He says this group of friends who make less than $100K a year call themselves that, and perhaps that's true. (If I were a part of this group, I might call myself a welfare case too because everything's relative and some of these dudes spend more in an hour of vacation than I spend on my mortgage each month.)

It's like we can see our society's wealth gap all laid out nice and neatly in a spreadsheet, only these people aren't even the uber-wealthy and uber-poor. This is just the range of this one guy's friends.

I have nothing against people who build success and wealth for themselves, and even $5 million per year is hardly obscenely wealthy by billionaire standards. But Cruz says he's known most of his "welfare" friends since college, which presumably means most of those guys have college degrees and are making pittance in comparison with the Forbes list. One could claim the guy making $5 million a year just works harder, but does he really work 100 times harder than the guy making $50,000? Doubt it.

Money makes money, and after a certain threshold of wealth or income, it's actually quite easy to get and stay rich without actually "earning" more money, assuming you're reasonably wise and responsible. So maybe the guys who are willing to shell out $125,000 for a week-long trip should offer to pay the travel expenses of the friends they "hang out with regardless of income" who don't even make that in a year, since that's probably just the interest they're making on their wealth anyway.

But what do I know? This is like an entirely different world to me and probably 99+% of Americans, as evidenced by some of the responses.

Naturally, there will be a range of incomes in any group of people, but 1) most of us don't actually know how much our friends make, and 2) even fewer of us make spreadsheets with that information in order to rank our friends and figure out who can go on which vacations.

People are just endlessly fascinating. That's all I've got.


This article originally appeared on 08.20.21

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Education

The amount of money Americans budgeted for food 100 years ago is mind-boggling

If we think our grocery bills are high now, it's nothing compared to what families spent in the early 1900s.

Photo by Karsten Winegeart on Unsplash

Even if we shop at the most expensive stores, we still don't spend as much of our income on food as they did in 1901.

As inflation following the COVID-19 pandemic peaked in the summer of 2022, Americans keenly felt it at the grocery check-out. It seemed as if prices had gone up on everything, and our food budgets took a hit. Even though inflation has eased since then, many of us are still lamenting the amount we're spending on groceries and dining out every month.

A New York Post headline ominously pronounced in February 2024 that "Americans have not spent this much of their incomes on food since the Gulf War," citing a federal statistic that U.S.consumers spent 11.3% of their disposable income on food—a higher percentage than we've seen in the past 30 years.

But as they say, it's all relative. While we balk at spending 11% of our income on food, families in the early 1900s would have been thrilled at spending that little on food.

According to the Bureau of Labor Statistics, Americans spent a whopping 42.5% of their household budgets on food in 1901, nearly four times what we spend now. In real numbers, that means the equivalent of a household with the current median income of almost $75,000/yr spending $2,610 a month on food. And that was the reality for a long time—even a few decades later in the 1930s, people were still spending more than a third of their income on food compared to our 11% today.

And the economy, while different in its nature, wasn't drastically different in terms of numbers at that time. The unemployment rate for Americans in 1901 was 4.0%, approximately the same as March of 2024. The country was between two mild recessions and it would only be two more years before it overtook Britain as the world's wealthiest nation. It's not like there was some huge economic downturn that had caused food prices to soar at that time. Food just cost a whole lot more relative to people's income back then.

Okay, so food budgets were high relative to income back then, but what about housing? Surely, people spent far less of their money on housing at that time, right?

Less, yes, but not by as much as we might assume. In 1901, housing made up 23.3% of the average household budget, while in 2022 it was 33%. Definitely an increase, but not as drastic as the decrease in our food budgets. (Caveat: Those percentages don't speak to everyone's individual situation—some Americans are spending upwards of 50% of their income on rent and utilities.) Our clothing expenditures have also gone down by a lot since 1901, from 14% of income to less than 3%.

So where is all of our money going to make our budgets feel squeezed? One spending category that's not even included in the 1901 statistics, which makes up double digit percentages of our spending today, is transportation. In 1901, the automobile industry was in its infancy, still a couple decades away from its first big boom that made cars commonplace. Now we have cars, buses, subways, air travel—and the fuel for all of those things—that people in 1901 simply didn't have to consider.

We also have technology like computers and smartphones now that have become more necessity than nice-to-have. And along with that, of course, we have copious entertainment extras that most of us can't imagine living without.

Another expenditure that doesn't show up in 1901 is healthcare, which takes up 8% of our budgets now. Did people simply not have healthcare expenses back then?

Basically, no, they didn't. According NPR, Americans spent around $5 a year ($100 in today's dollars) on medical care in 1900, primarily because there wasn't a whole lot of medical care to be had. We forget how far our advancements in medicine came in the 20th century, and that those advancements have a cost. Throw in the health insurance industry evolving in the middle of the 1900s, and now medical costs make up a decent chunk of our budgets.

It's fascinating to take a step back and look at the big picture of history when we find ourselves complaining about the price of a banana or a bag of rice. It's not that we can't or shouldn't feel frustrated when our cost of living increases, but when it comes to food budgets, we're living in pretty flush times, relatively speaking. Especially when we consider how much more access we have to different kinds of foods than ever before.

Fluctuations in retail prices have always occurred, of course, due to wars, recessions, etc., and some items have become more expensive while others have gotten cheaper, relatively speaking. But regardless of individual prices, if we find ourselves lamenting our curren grocery bill, it might help to remember how much more of the average budget food used to be. Even if grocery prices were to rise more, we still won't be anywhere near the percentage of our paychecks that food used to take up, and that's certainly something to be grateful for.

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Family

Millennial mom teaches her 3 young children money management by charging them rent

Though the method has caused some parental debate, this mom says it's a great way to teach kids about money “in a safe environment.”

@samanthabirdshiloh/TikTok

Is it ever too early to teach kids about money?

Back in May of 2023, a Texas couple sparked a huge parental debate after saying that they charged their 19-year-old daughter rent after she graduated high school. While some thought it taught responsibility, others felt like they were merely adding another arbitrary obstacle for their child.

Now, if this was the response to a 19-year-old getting charged rent, imagine how folks might feel to hear about it happening to kids under 13.

In a viral TikTok, mom and personal finance influencer Samantha Bird shared that she charged her three elementary school-aged children rent and utilities each month. This method might seem unconventional, but Bird argues that it’s simply a way to learn about money “in a safe environment.”

Here’s how it works: each of Bird’s children (ages 6, 8 and 9) gets $6 a week for allowance. One dollar per week is expected to go towards one of three monthly expenses: rent, utilities or groceries.

“They track it on their budget trackers and other spending or categories happen after those payments. They set that dollar in a separate envelope for utilities, and then at the beginning of the next month, we charge them for their bill,” Bird explained.

For the most part, viewers loved the idea.

@samanthabirdshiloh We increased the boys allowance to accommodate them paying “mock” bills. I want them to have a sense of responsibility and learn how to manage expenses in a safe environment now! #budgeting #finacialfreedom #parenting #kidstiktok #kidsoftiktok #kidspersonalfinance #financetiktok #moneytips #debtpayoff #debtfree #debtfreejourney #debtfreecommunity #investingforkids #investing #personalfinancetips #moneymindset #moneymanifestation ♬ original sound - Samantha Bird

“It’s a great way to teach financial responsibility,” one person wrote. While another commented, “first I was like wow this is ridiculous. Then I was like man I wish I learned this at any point of my life.”

It also inspired a few comedic gems. Like:

“Should give them $5 per month but expenses are $6. More realistic.”

“No need for this. School will teach them all they need to know. Like parallelograms. Which comes in handy during parallelogram season.”

But her budget-conscious parenting style didn’t fully escape criticism. One person wrote “They’re too young for this. Chances are they’ll become hyper-fixated on money and be over anxious about it. I speak from experience.”

Another added, “Kids this age absolutely do not need to learn about expenses and bills. This is a perfect set up for creating financial anxiety.”

Experts over at MarketWatch, while they too had mixed reactions to Bird’s strategy, agreed that teaching money handling at a young age is crucial.

Kate Yoho, a financial adviser at Tennessee-based TBH Advisors said “starting them at that age is great,” adding “I love her strategy. It’s good and basic. Kids get excited about stuff when they’re little — especially money, because they don’t understand it.”

Meanwhile, Rick Kahler, a financial planner and financial therapist and founder of Kahler Financial Group in South Dakota, noted that while Bird’s strategy works for her, it is certainly not one-size-fits-all.

“When it comes to teaching kids money skills, there isn’t one way to do it. I applaud [Bird] for being aware that she has a responsibility to teach her kids money skills. Whether the way she is going about it is [right] is always one of subjectivity,” he said.


Yet another expert, Michele Paiva, a Pennsylvania-based financial therapist, warned that this specific type of “envelope budgeting” can be uninspiring and anxiety-inducing to kids. Which can also be true for adults as well. But she did also note that it’s a great way to teach math skills, as well as how to have constructive money conversations, especially when it comes to deciding how to spend the remaining money.

For Bird, it all comes down to teaching her kids valuable skills they’ll need as adults “while they’re little and this process still feels fun for them.” Not to mention she wants to protect them from going into heavy debt like she did. That’s why she not only goes over all things money management. She even talks with them about credit and the stock market.

Even if parents don’t plan on adopting this strategy for their own family, it’s important to find some way of instilling these skills. Yes, of course kids should be kids while they still can, but, just as in Bird’s case, children tend to love learning adult skills, especially when it’s presented in a fun way. Maybe with more ideas like this, we’ll finally have a generation of financially savvy adults that don’t have to make the parallelogram joke.

If you'd like to get even more money savvy content from Bird,—and check out her cool finance workbook for kids—follow her on TikTok.

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Education

London historian shares why Victorian-era money was extra complicated to count

They used up to 5 units of measurement.

via Wikimedia Commons and Jerry Woody/Wikimedia Commons

Two Victoria gentleman and a shilling from 1894.

If you had a time machine and woke up in Victorian-era London (1837-1901), you would have difficulty breathing because of the air quality. You'd also walk around plugging your nose because of the poor sanitation and probably be very confused when purchasing anything because of the monetary system.

J. Draper, a London historian and tour guide, explained why money was so different in the Victorian era in a popular YouTube video with nearly 300,000 views. “Let me try and explain how pounds, shillings and pence worked,” J Draper opens her video.

First, in modern-day England, they have two units of money, pounds and new pence, which work like dollars and cents. One hundred pence equals one dollar. However, back in the Victorian era, there was a third unit of money between pence and pounds called the shilling. The shilling was phased out starting in 1971.

To give an example of how money worked in Victorian England, she shared the example of journalist Henry Mayhew, who in 1851 said it costs 21 pounds (£), 9 shilling (s) and 11 pence (d, for denarius) to set yourself up as a baked potato seller. Written out, the cost looks like this: £21 9s 11d.

The breakdown goes like this: 12 pence are in a shilling and 20 shillings make a pound. To further complicate things, there were two more units of money in the 19th century: the 1/4 pence, known as a farthing and a 1/2 pence, known as a half penny (pronounced "haypnee").

"I hope this helps, but like with any measurement system, there's no substitute for just practicing it," J. Draper concludes her video.





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