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I'm 40 and way poorer than my babyboomer parents. My savings got wiped out in a housing market crash in 2008, they have made over half a million euro in their l

I'm 40 and way poorer than my babyboomer parents. My savings got wiped out in a housing market crash in 2008, they have made over half a million euro in their lives just from their houses becoming worth more over time. They've also both had work most of their adult life, and their pensions funds have always done well on the stock market, whereas my wife has been without a job since the financial crisis hit and government in the Netherlands went in austerity mode.

laotzu 11y ago
May I ask what your savings were in that caused them to be be wiped out in 2008? I would have to guess retirement funds invested in mutual funds which were invested in the housing bubble?
- Scarblac 11y ago
  We bought a house for 300k, about 60k of it our savings and 240k mortgage. In the next two years, the value of the house went down by 60k. To be honest that wasn't _all_ our savings, and they were already spent on the house of course, but it was a financial loss equal to most of our original savings.
  - esteth 11y ago
    If the house was your primary residence, and not an investment instrument, you didn't really "lose" anything - other property is now also cheaper, and you always need somewhere to live. Sure, you're paying more than you would have if you waited, but you were happy to pay XXXXUSD per month to have somewhere to live, and your relative mobility has actually increased if we assume that the housing market fell by a flat percentage.
    - Scarblac 11y ago
      Assuming that I will always move on to another own house, and not a rented one.
      - logfromblammo 11y ago
        I'm never buying again. If they want me to sink 30 years of my life into monthly payments, I'm going to need a job that will last for at least 30 years of steady paychecks. And I don't believe those actually exist any more. Also, I no longer trust the justice system to protect my rights as a property owner. Having been primed by software-based DRM to not want to buy something unless I can truly own it, I find that land property in the US is often heavily encumbered with covenants, regulations, local ordinances, mortgage terms, and recurring taxes, to the point where it feels like paying rent and signing a lease feels less restrictive.
        JoeAltmaier 11y ago
        Takes all kinds. I bought my place after 20 years of payments, on a dozen different jobs. Had savings, so 'between jobs' didn't impact mortgage payments. And I'm out in the county, where if they have zoning rules, there sure as heck aren't any inspectors. So I do as I please. Feels pretty unencumbered to me!
        logfromblammo 11y ago
        I have been burnt twice on home ownership, and didn't enjoy the pain. Other people will have different experiences. I do know for certain that I will never sign another mortgage for as long as I live. Those lenders can go FOADIAF.
        Scarblac 11y ago
        > I'm never buying again. If they want me to sink 30 years of my life into monthly payments, I'm going to need a job that will last for at least 30 years of steady paychecks. I don't get this. If you rent instead, you'll just be sinking monthly payments into that (maybe more, maybe less than with buying). And there's no need for a job that lasts 30 years, you just need to keep the ability to make the payment every month. But that is also true when renting.
        logfromblammo 11y ago
    - esaym 11y ago
      I think the problem is when you finally do need to move, and you owe 200k still but will only be able sell the house for 150k. You'll still be making mortgage payments on a house you won't even have then.
      - at-fates-hands 11y ago
        Real estate markets are a fickle beast. After the 2008 crash, I was planning on moving, but abruptly changed my plans when I lost close to a 80K on the value of my home. Fast forward 6 years and suddenly the market was showing signs of rebounding. I had always been in contact with my real estate agent, but I was considering a large scale remodel and staying put where I was. My agent offered to start looking for something that I might like. A year later the process went shockingly fast. I was assuming the house would sit for a while since the market was still pretty soft. I cleaned and de-cluttered my house and it went on the market. Within hours I had two listings for the next day - which ballooned to four the morning of. When I got back, I had two offers. The house was on the market less than two days. I credit the ability to sell my house and make a few grand on it to my agent. It was priced and marketed really well by him and his company. This is the second house he's sold for me. The other house was on the market at the height of the housing boom and sold in less than a week.
    - jellicle 11y ago
      Just because the loss hasn't been realized yet doesn't mean it isn't real. Among other things, prior commenter can't move to a different house because s/he no longer has a downpayment and won't be able to refinance to take advantage of lower rates. An increase in housing values is real, and so is a decrease, and it's real even before those losses/gains have been realized by selling (for instance, a HELOC can get the gains out before selling).
      - Scarblac 11y ago
        In particular my wife has no job now and mortgage lending rules are much stricter now. So although we can make the payments on our current 240k mortgage each month on my income, the maximum mortgage we could get now is something like 180k.
    - cpursley 11y ago
      Exactly, we're all naturally short housing. https://thezikomoletter.wordpress.com/2012/12/10/you-are-naturally-short-housing/ https://thezikomoletter.wordpress.com/2012/12/10/you-are-nat...
- beachstartup 11y ago
  simply owning a recently-purchased house in an affected real estate market could have caused that. if you couldn't cover mortgage due to job loss or a rate hike, you were forced out and lost the money. doubly so if you were also invested in financial markets. a lot of people lost a lot of money. meanwhile, parents' mortgage is from the 1980s or 1990s and easily affordable in today's money, even if their nominal market value takes a slump, the mortgage is easily covered and the rebound in values 3-4 years later will put you far ahead again. if you were smart enough to hold steady or even double-down when the financial markets were down, well then you're even richer today. it was essentially a transfer of wealth from one generation to well-positioned members of the previous generation, and of course bankers/traders. but it wasn't a conspiracy... some people are just better positioned for and better able to see a massive market shift like that. i personally lost some (not that much) money during that time, and my parents gained money. ultimately their money is my money so i'm fortunate in that regard, but the same exact thing happened to me. i did everything 'right', including saving and investing, and still got somewhat shafted personally due to a combination of extrinsic market forces and personal decisions.
adventured 11y ago
Isn't the Netherlands government spending higher as a portion of GDP today than it was ten years ago? Is it primarily an issue of where they're spending the money?
- Scarblac 11y ago
  Cost of healthcare is going up all the time, social security as well. My wife was a municipal civil servant and they have to make cuts.
  - adventured 11y ago
    How does the healthcare system work in the Netherlands? I'm entirely unfamiliar with it. Is it more similar to Germany / Switzerland, or closer to the UK model?
    - stuxnet79 11y ago
      Looks to me from a simple Wikipedia search that the Netherlands follows the Bismarck Model (Germany, Switzerland) rather than the Beveridge Model. UK's NHS is one of a kind. Not a lot of countries have or can afford to have the same type of healthcare system as UK.
logfromblammo 11y ago
Similar story here. I cashed out a lot of stocks to make a down payment on a house. Then I had to move to a different city to find work, and lost everything I ever put into the house. I timed the market just right to lose everything, because my other options were to lose more than that. I have had more employers in 15 years of work than both of my parents accumulated over a combined total of nearly 80 years. I have never, ever been promoted within the same company, but I have been summarily tossed to the curb for no individually-attributable reason--along with several of my office-mates--a total of four times. I have a lot of envy for what the Baby Boomer generation already got, and in combination with the condescending attitude they have (in aggregate) towards the younger generations, it fuels a lot of resentment. Their formula of education plus hard work equals success has not been even remotely accurate for me. Education plus hard work equals screw you, buddy, because I already got mine. Enjoy your layoffs and unaffordable housing and tuition increases well in excess of inflation and slashed employer-granted benefits and mountains of political debt, because your parents have decided to sell their house at 20x what they paid for it, buy a plush RV, and split their well-funded retirement between any convenient US state and Snowbirdland, Mexico. And what really kills me is that I have never seen anyone from my parents' generation working particularly hard. Maybe they did all that before I was born, and just coasted along afterward? Maybe I don't really know what hard work looks like? Well, anyway, thanks for all the inter-generational tension, Boomers. We'll air it out by having Thanksgiving dinner at your house again this year, because none of your kids can afford homes big enough to hold everyone.
- cpursley 11y ago
  > We'll air it out by having Thanksgiving dinner at your house again this year, because none of your kids can afford homes big enough to hold everyone. That and we can't afford to have our own kids...
- Robin_Message 11y ago
  Genuine question: why not rent out the house whilst you were in the other city? That would have probably covered the mortgage and got you out of the dip until you could either move back, or the market had picked up again and you could sell without loss.

laotzu 11y ago

May I ask what your savings were in that caused them to be be wiped out in 2008? I would have to guess retirement funds invested in mutual funds which were invested in the housing bubble?

Scarblac 11y ago
We bought a house for 300k, about 60k of it our savings and 240k mortgage. In the next two years, the value of the house went down by 60k. To be honest that wasn't _all_ our savings, and they were already spent on the house of course, but it was a financial loss equal to most of our original savings.
- esteth 11y ago
  If the house was your primary residence, and not an investment instrument, you didn't really "lose" anything - other property is now also cheaper, and you always need somewhere to live. Sure, you're paying more than you would have if you waited, but you were happy to pay XXXXUSD per month to have somewhere to live, and your relative mobility has actually increased if we assume that the housing market fell by a flat percentage.
  - Scarblac 11y ago
    Assuming that I will always move on to another own house, and not a rented one.
    - logfromblammo 11y ago
      I'm never buying again. If they want me to sink 30 years of my life into monthly payments, I'm going to need a job that will last for at least 30 years of steady paychecks. And I don't believe those actually exist any more. Also, I no longer trust the justice system to protect my rights as a property owner. Having been primed by software-based DRM to not want to buy something unless I can truly own it, I find that land property in the US is often heavily encumbered with covenants, regulations, local ordinances, mortgage terms, and recurring taxes, to the point where it feels like paying rent and signing a lease feels less restrictive.
      - JoeAltmaier 11y ago
        Takes all kinds. I bought my place after 20 years of payments, on a dozen different jobs. Had savings, so 'between jobs' didn't impact mortgage payments. And I'm out in the county, where if they have zoning rules, there sure as heck aren't any inspectors. So I do as I please. Feels pretty unencumbered to me!
        logfromblammo 11y ago
        I have been burnt twice on home ownership, and didn't enjoy the pain. Other people will have different experiences. I do know for certain that I will never sign another mortgage for as long as I live. Those lenders can go FOADIAF.
      - Scarblac 11y ago
        > I'm never buying again. If they want me to sink 30 years of my life into monthly payments, I'm going to need a job that will last for at least 30 years of steady paychecks. I don't get this. If you rent instead, you'll just be sinking monthly payments into that (maybe more, maybe less than with buying). And there's no need for a job that lasts 30 years, you just need to keep the ability to make the payment every month. But that is also true when renting.
        logfromblammo 11y ago
  - esaym 11y ago
    I think the problem is when you finally do need to move, and you owe 200k still but will only be able sell the house for 150k. You'll still be making mortgage payments on a house you won't even have then.
    - at-fates-hands 11y ago
      Real estate markets are a fickle beast. After the 2008 crash, I was planning on moving, but abruptly changed my plans when I lost close to a 80K on the value of my home. Fast forward 6 years and suddenly the market was showing signs of rebounding. I had always been in contact with my real estate agent, but I was considering a large scale remodel and staying put where I was. My agent offered to start looking for something that I might like. A year later the process went shockingly fast. I was assuming the house would sit for a while since the market was still pretty soft. I cleaned and de-cluttered my house and it went on the market. Within hours I had two listings for the next day - which ballooned to four the morning of. When I got back, I had two offers. The house was on the market less than two days. I credit the ability to sell my house and make a few grand on it to my agent. It was priced and marketed really well by him and his company. This is the second house he's sold for me. The other house was on the market at the height of the housing boom and sold in less than a week.
  - jellicle 11y ago
    Just because the loss hasn't been realized yet doesn't mean it isn't real. Among other things, prior commenter can't move to a different house because s/he no longer has a downpayment and won't be able to refinance to take advantage of lower rates. An increase in housing values is real, and so is a decrease, and it's real even before those losses/gains have been realized by selling (for instance, a HELOC can get the gains out before selling).
    - Scarblac 11y ago
      In particular my wife has no job now and mortgage lending rules are much stricter now. So although we can make the payments on our current 240k mortgage each month on my income, the maximum mortgage we could get now is something like 180k.
  - cpursley 11y ago
    Exactly, we're all naturally short housing. https://thezikomoletter.wordpress.com/2012/12/10/you-are-naturally-short-housing/ https://thezikomoletter.wordpress.com/2012/12/10/you-are-nat...
beachstartup 11y ago
simply owning a recently-purchased house in an affected real estate market could have caused that. if you couldn't cover mortgage due to job loss or a rate hike, you were forced out and lost the money. doubly so if you were also invested in financial markets. a lot of people lost a lot of money. meanwhile, parents' mortgage is from the 1980s or 1990s and easily affordable in today's money, even if their nominal market value takes a slump, the mortgage is easily covered and the rebound in values 3-4 years later will put you far ahead again. if you were smart enough to hold steady or even double-down when the financial markets were down, well then you're even richer today. it was essentially a transfer of wealth from one generation to well-positioned members of the previous generation, and of course bankers/traders. but it wasn't a conspiracy... some people are just better positioned for and better able to see a massive market shift like that. i personally lost some (not that much) money during that time, and my parents gained money. ultimately their money is my money so i'm fortunate in that regard, but the same exact thing happened to me. i did everything 'right', including saving and investing, and still got somewhat shafted personally due to a combination of extrinsic market forces and personal decisions.

adventured 11y ago

Isn't the Netherlands government spending higher as a portion of GDP today than it was ten years ago? Is it primarily an issue of where they're spending the money?

Scarblac 11y ago
Cost of healthcare is going up all the time, social security as well. My wife was a municipal civil servant and they have to make cuts.
- adventured 11y ago
  How does the healthcare system work in the Netherlands? I'm entirely unfamiliar with it. Is it more similar to Germany / Switzerland, or closer to the UK model?
  - stuxnet79 11y ago
    Looks to me from a simple Wikipedia search that the Netherlands follows the Bismarck Model (Germany, Switzerland) rather than the Beveridge Model. UK's NHS is one of a kind. Not a lot of countries have or can afford to have the same type of healthcare system as UK.

logfromblammo 11y ago

Similar story here. I cashed out a lot of stocks to make a down payment on a house. Then I had to move to a different city to find work, and lost everything I ever put into the house. I timed the market just right to lose everything, because my other options were to lose more than that. I have had more employers in 15 years of work than both of my parents accumulated over a combined total of nearly 80 years. I have never, ever been promoted within the same company, but I have been summarily tossed to the curb for no individually-attributable reason--along with several of my office-mates--a total of four times. I have a lot of envy for what the Baby Boomer generation already got, and in combination with the condescending attitude they have (in aggregate) towards the younger generations, it fuels a lot of resentment. Their formula of education plus hard work equals success has not been even remotely accurate for me. Education plus hard work equals screw you, buddy, because I already got mine. Enjoy your layoffs and unaffordable housing and tuition increases well in excess of inflation and slashed employer-granted benefits and mountains of political debt, because your parents have decided to sell their house at 20x what they paid for it, buy a plush RV, and split their well-funded retirement between any convenient US state and Snowbirdland, Mexico. And what really kills me is that I have never seen anyone from my parents' generation working particularly hard. Maybe they did all that before I was born, and just coasted along afterward? Maybe I don't really know what hard work looks like? Well, anyway, thanks for all the inter-generational tension, Boomers. We'll air it out by having Thanksgiving dinner at your house again this year, because none of your kids can afford homes big enough to hold everyone.

cpursley 11y ago
> We'll air it out by having Thanksgiving dinner at your house again this year, because none of your kids can afford homes big enough to hold everyone. That and we can't afford to have our own kids...
Robin_Message 11y ago
Genuine question: why not rent out the house whilst you were in the other city? That would have probably covered the mortgage and got you out of the dip until you could either move back, or the market had picked up again and you could sell without loss.