Ah, the Good Old Days

This article originally appeared on HumbleDollar.com

Richard Quinn  |  Jun 5, 2023

I GOT OUT OF THE ARMY in August 1969. In the months prior, my wife and I discussed our financial plans. Simply put, if I was given a raise to $160 a week when I returned to work, we could buy some furniture for our small apartment. Bingo—we made it. I was earning $8,300 a year.

The other part of our plan was to save my wife’s salary toward a house down payment. She left the job market for good the following July, when our first child was born. I was going to say she “stopped working,” but that wouldn’t be fair.

In early 1971, we bought a home for $29,000, taking out a 30-year mortgage at 9½%. Our house cost a little over double our 1971 gross income. Based on the average home price and median household income in New Jersey today, a house costs five times income—and we’re mostly talking two incomes. Of course, homes these days are nothing like our 1918 house with a single, tiny bathroom.

In 1972, we bought our first new car, a two-door Plymouth Duster. It cost $2,400. The monthly loan payment was less than $100. There was no air-conditioning and no power anything. For many years, six of us—we had children in 1970, ‘71, ‘74 and ’75—traveled 300 miles every year to Cape Cod in that car. Our daughter sat on a booster seat between us in the front. Yup, in the good old days, we did foolish things, too. We’d probably get arrested today. One August, because of bad traffic, it took us nine hours to do the drive—it usually takes five. Now, that was a family crisis.

Going through some old records, I found our 1971 income tax file. I earned $12,426 as a clerk supervisor, but my adjusted gross income was $12,188, with some interest earnings offset by realized stock market losses. Today, our property taxes alone are $2,000 more than our total 1971 income.

 I’ve previously mentioned my early failures at investing. In 1971, I sold 100 shares of a company called Federal Resources for a loss of $797.

Back then, the personal exemption was $675, which—for our family which then numbered four—knocked a whopping $2,700 off our taxable income. Our mortgage interest was $1,475 and property taxes were $771. In 2023 dollars, those property taxes should be some $5,800. But for that house today, property taxes are actually $11,375 and the place is assessed at $384,700 for tax purposes. In 1975, we sold the home for $42,500.

According to my tax return, I paid $31 in interest in 1971—on a margin account. To be honest, I have no memory of that account. Why would someone earning $12,000 a year have a margin account? Did I buy Federal Resources on margin? I hope not.

I also deducted expenses for my belated college education. Tuition and books, along with the travel miles from work to school to home, came to $763.  Deducting college travel expenses is a no-no these days. I hope that wasn’t the case in 1971. I traveled 3,200 miles that year going to college. The bottom line: I paid almost $1,001 in income taxes in 1971, for an effective tax rate of a bit more than 8%.

Life was simpler in those days. We actually did live paycheck to paycheck—after always saving something—but doing so seemed to be the norm, not a crisis. Vacations were modest and short. I cut my own grass and shoveled the snow. We even had a nice vegetable garden. My wife was very involved in the children’s school activities. Birthday parties were always at our house, with a homemade cake.

We weren’t poor, but we lived modestly, and we were no worse for it. Actually, I should have been pleased. The median household income in 1971 was $10,290. Who knew we were solidly middle class?

Would I like to go back to the good old days? I think not. Still, there are some things I wouldn’t mind bringing forward to today—like our tax bill and the cost of a car.