For those who have come to know me over the years, you know that I place a very high priority on dividend [and distribution] growth. I even frequently have very discouraging words about those who focus on yield. If you do not know where I am coming from, one might get the impression that since I am frequently a minority voice on this board, that I most be out of touch - else others would be agreeing with me much more often.

    I am no Obama when it comes to speeches, but the stats that follow have - for me - one of the most powerful messages I have heard in years. [And this is a message that I may have posted here before]. The stats:

From the U.S. Department of Labor Study: 100 Years of U.S. Consumer Spending

    In 1901 yearly household income averaged $750. Annual expenditures for the average U.S. family averaged $769. Of this amount, 42.5% ($327) was allocated for food, 14.0% ($108) for clothing, and 23.3% ($179) for housing. The U.S. population was 76 million. There were 7.2 million owner-occupied housing units in the country, but only 19.0% of U.S. families owned a home, while 81.0%were renters. Grocery store prices in 1901 averaged about 14 cents per pound for round steak or pork chops, 27 cents for a pound of butter, and 13 cents for 5 pounds of flour.

    By 1919, average family income had more than doubled, to $1,518 (a 102% increase), while household expenditures had increased to $1,434 (an 86% gain). The average U.S. household spent 75.4% more for food ($549), but the household’s expenditure share for food had decreased to 38.2%. Spending for clothing had increased 120.4% to $238, but this category represented only 16.6% of total expenditures. Housing was where the significant change took place: spending for housing had increased 86.6%, to $334, although the expenditure share for this category remained 23.3%. The population in the country was 105 million. There were over 10 million owneroccupied housing units in the country. Spending for housing had increased 86.6%, to $334, although the expenditure share for this category remained 23.3%. (The housing expenditure category included costs not only for rent, but also for fuel, light, furniture, and furnishing.) Families who lived in their own homes had a yearly rent (the term used in the Consumer Expenditure Survey) of $176. Families living in apartments or flats paid a yearly rent of $178. Retail prices had almost tripled since 1901. A pound of round steak cost an average of 37 cents, and pork chops, which had cost 13 cents a pound in 1901, averaged 39 cents in 1918. Five pounds of flour cost 34 cents, and consumers paid 58 cents for a pound of butter.

    By 1936 - in the 15-year period following World War I, average family income had remained flat, rising only $6 to $1,524. Meanwhile, average family expenditures had risen 5.4% to $1,512. These dollars would have purchased $1,387 worth of goods and services in 1918 dollars, compared with the $1,434 that families in 1918 spent, demonstrating the deflationary effect of the Depression on the dollar’s value. Food, clothing, and housing occupied a 76.2% share of household spending, a decrease from 1918–19. The expenditure share for housing was 32.0%, which translated into an average annual expenditure of $485. The number of owner-occupied housing units had increased to 14 million. Forty percent of families owned automobiles, almost all of which were purchased secondhand rather than new. Average household expeditures for food was $508.

    In 1950, with wages double or triple what they had been in 1935. The average U.S. family’s income of $4,237 had increased by 178.0% since 1934–36. Average family expenditures during the same timeframe had increased 151.9%, to $3,808. This amount would have purchased $2,171 worth of goods and services in 1935 dollars, reflecting inflationary forces. Nationally, home ownership had increased, with 48% of all families owning their own home. Average annual housing costs were $1,035. Retail food prices had risen sharply from 1934–36 levels. The price of a pound of butter had doubled, from 32 cents to 73 cents. Meat prices also had risen sharply, with a pound of round steak increasing from 28 cents to 94 cents and pork chops from 26 cents to 75 cents per pound. Average household expeditures for food was $1,130.

    By 1960, average family income in the country was $6,691, 57.9% higher than in 1950. Average family expenditures, $5,390, had increased 41.5% from 1950. This amount would have purchased $4,366 worth of goods and services in 1950 dollars. The U.S. population had surpassed 179 million, a gain of 19.0% from 1950. More than half of U.S. families were homeowners, with annual expenditures on housing being $1,588. Families spent proportionately less for food despite rising retail prices. One pound of round steak cost $1.06, up 12 cents from 1950. The price of a pound of pork chops had risen 11 cents to 86 cents per pound. More Americans (73%) owned automobiles, and they paid more for their cars. Average household expeditures for food was $1,311.

    By 1972 the average family income in the United States was $11,419, an increase of 70.7% from 1960–61. The average U.S. household had an after-tax income of $9,731, having allocated 14.8% of income for taxes: $1,399 in Federal income taxes, $234 in State and local income taxes, and $55 in personal property and other personal taxes. The market value of the average household’s financial assets was $7,094. Average household expenses were $8,348, an increase of 54.9% from 1960–61. This sum would have purchased $5,972 worth of goods and services in 1960–61 dollars. Average annual housing expenses were $2,551. Of total spending on housing, the average U.S. household allotted 51.4% ($1,311) for shelter (54.8% for owned dwellings versus 43.6% for rent), 16.0% ($409) for fuel and utilities, 17.4% ($443) for household operations, and 15.2% ($387) for furnishings and equipment. Most Americans [58.8%] owned their home (33.4% having a mortgage and 25.3% having no mortgage), while 36.8% were renters. The estimated market value of the average family home was $14,283, which translated into an estimated monthly rental value of $100. Some 80.1% of U.S. families owned at least one auto. These households spent $784 (9.5% of their expenditures) to buy and finance their autos. Additionally, they spent $750 (9.1%) on auto operating expenses. Average household expeditures for food was $1,596.

    By 1984 average family income in the country had risen to $23,464, an increase of 105.5% since 1972–73. The average U.S. family had an after-tax income of $21,237, having allocated 9.5% of income for taxes: $1,733 in Federal income taxes, $431 in State and local income taxes, and $63 for other taxes. Average household expenditures, $21,975, had grown 165.7%. This amount would have purchased $8,790 worth of goods and services in 1972 dollars. Compared with 1972–73, the share for food had decreased to 15.0% ($3,290), while clothing had declined to 6.0% ($1,319), and housing had held steady at 30.4% ($6,674). Of total spending on housing, the average U.S. family allotted 52.3% ($3,489) for shelter; 24.5% ($1,638) for utilities, fuel, and public services; 4.7% ($315) for household operations; and 13.9% ($926) for household furnishings and equipment. Among U.S. families, 63% owned their own home (38% with a mortgage and 25% without a mortgage), while 38% were renters. The estimated market value of the average home was $47,269, and its estimated monthly rental value was $292. In 85% of households, there was at least one automobile, with an average yearly cost for transportation of $4,304. Average household expeditures for food was $3,290.

    By 1996-1997 the average family income in the country had risen to $38,983, an increase of 66.1% since 1984–85. Average household expenditures, at $34,312, had grown 56.1%, over the same period. This sum would have purchased $22,646 worth of goods and services in 1984 dollars. In terms of home ownership status, 64% of Americans owned their home (38% with a mortgage and 26% without a mortgage), while 36% of households were renters. Of total spending on housing, the average U.S. family allotted 56.4% ($6,205) for shelter, 21.6% ($2,380) for utilities and fuel, 13.0% ($1,432) for furnishings and equipment, and 4.2% ($459) for household supplies. The estimated market value of the average home was $74,835, which translated into an estimated monthly rental value of $521. Some 85% of U.S. families owned at least one vehicle, the average family owning 1.9. These families allotted 18.7% ($6,420) of their total spending for transportation, with 8.1% ($2,775) for the purchase of vehicles; 3.2% ($1,090) for gasoline and motor oil; and an additional 6.3% ($2,145) on other vehicle expenses, including financing and maintenance costs. Average household expeditures for food was $4,750.

    By 2002-2003, the average family income was $50,302, an increase of 29.0% from the mid-1990s. Average household expenses, $40,748, had grown by 18.8% from the mid-1990s. This amount would have purchased $35,827 worth of goods and services in 1996 dollars. Of total spending on housing, the average U.S. family allotted 58.8% ($7,859) for shelter, 20.6% ($2,749) for fuels and utilities, 9.3% ($1,243) for household operations and supplies, and 11.2% for furnishings and equipment. Two-thirds of U.S. households (67%) owned their home (41% with a mortgage and 26% without a mortgage), while 33% rented. The estimated market value of the average home was $114,522, and its estimated monthly rental value was $735. Some 88% of U.S. families owned at least one motor vehicle, with the average family owning 2.0. These households allotted 19.1% ($7,770) of their total spending for transportation expenses, with 9.1% ($3,699) for the purchase of vehicles; 3.2% ($1,285) for gasoline and motor oil; and 5.9% ($2,400) for other vehicle expenses, including financing and maintenance costs. Average household expeditures for food was $5,357.

-------------- end of the stats from the study ------------

Why Does This Matter?

    Most of us are building portfolios for retirement or are early in retirement. And the average life expectancy for someone entering retirement at 65 is approximately 20 years. So the odds are that half of us are going to live even longer than the approx 20 years between updates on the above prices. And we need to be prepping today for the doubling of prices that come tomorrow.

    And most of us [thought I am yet to be one] have a healthy percentage of their portfolio in bonds - an investment where you will fail to get dividend growth. And if you are going to get the required growth, then the equities that you own have to do much better than just keep pace with inflation. Your equities have to carry not only THEIR share of the load, but also make up for the lack of growth from your bond portfolio.

    I now hope that you see where I am coming from. And I hope you now can better see why I have a strong focus on dividend growth. And I hope that you can see why I am concerned by the lack of a community focus on gathering the metrics that would aid us in having realistic projections of dividend growth. [I have the impression that speeches that mention 'hope' are those that are the most persuasive - thus I am ending this message with lots of 'hope' (grin}]

Bob a.k.a. Factoids - who is 'beyond perturbed' [I'm using a differnt term since I have been scolded by Missash to avoid the other p word] by the focus on this board that is so distant from my own