7 ms·

I think the term "poorer", and the monetary analysis done here, is too high level to extract real meaning. The average young person/couple that I know are able

I think the term "poorer", and the monetary analysis done here, is too high level to extract real meaning. The average young person/couple that I know are able to do and buy far more than their parents (e.g. eat out, order takeaway, take holidays, go to bars, buy things for hobbies, buy clothes, ...). They just don't own property and have no path that leads there. In some sense you could say that they have higher incomes whilst having lower wealth, but that doesn't really capture it. Housing just went bonkers which makes retirement impossible.

enraged_camel 8y ago
What you are talking about is having higher quality of life, despite having lower wealth. But that's a separate subject in my opinion.
- esotericn 8y ago
  "Quality of life" is a problematic term in that context. Within bounds it's possible to compare. Two families living on the same street, one has $10k higher income than the other, the higher income family has (at least the potential for) a higher QoL. But comparing someone with a high income in a downtown flatshare who has an ~infinite entertainment budget to someone who is well on the way to owning a home outright in the suburbs is really hard (e.g. a 30yo in London, vs their parents at 30yo). The former doesn't have a higher or lower QoL than the latter because you can't define a benchmark without it being opinionated.
  - Vraxx 8y ago
    I'll start by saying that I agree with your assessment of the underlying issue here, I just have a slight nitpick with your comparison. Other areas do exist that could allow people to move out of the city to a cheaper owned home in the suburbs. Personally I don't think that's a good solution though because suburbs are pretty inefficient and seem likely to exacerbate the climate problem we're running full speed into. I just wanted to point out that you can form some comparison because they are both still relatively attainable. (I might be mistaken on the real estate landscape in the UK since I'm from the US, if so just disregard this comment) My other comment is mostly aimed at GP, but it seems that it has persisted down the comment chain, which is that from everything I've heard and read, "Higher income, lower wealth" is not an accurate assessment of what is happening when you factor in inflation. It's more of "The same/lower income, lower wealth" on average. Even still though, given the ideals of a capitalist system saying that owning capital is literally worth capital itself, lower long term wealth is most definitely a long term problem because this is a runaway feedback loop of capital concentrating in the top and the lower non capital owning members of society are slaves to capital. You might be technically earning a wage and thus not fit the technical definition of slavery, but if you have less and less freedom (defined as less freedom through lack of actual choice) because of it, I see very little difference.
- thomaskcr 8y ago
  I think it's just hard to compare between the generations due to changes in how lifestyles are financed. My parents came out of school with no debt and were able to buy a house way before me. I came out of school with considerable debt and wasn't able to buy a house for a while. On the flip side, my parents talk about when I was first born and they had to choose between two toys because they couldn't afford both (a mirror and a little bird - maybe $20 each). I have never had an issue with access to money, even when I had nearly nothing in the bank and was paying down my student loans as fast as possible and something came up - a quick call to the bank was all that stood between me and enough to finance a full repair across the next 3 months instead of a bandaid. My parents didn't have that type of access to credit. Me and my dad worked in a similar role (software development - him for a bank, me for defense) out of college. Granted, even inflation adjusted I made a lot more than him right out of school. Also, even though my parents had a house way younger than me I wouldn't want a credit card with the interest rate my parents were paying on their house. It was insane.
gambiting 8y ago
Agreed. I live the life of incredible luxury compared to when my parents were my age, definitely in terms of "life experiences" and material possessions....except for housing. Getting on the property ladder seems like a dream that's very far away, even when working as an IT professional.
- malvosenior 8y ago
  I think it's worth noting that having a family is a "life experience" and a home is a "material possession". Many would argue that travel, dining out, bars... are shallow and hedonistic experiences while cultivating a family and community are enriching and rewarding.
  - deleted 8y ago
    [deleted]
  - brokenmachine 8y ago
    It's not very enticing to start a family when you're renting and have no stability though. When it seems like owning a home is completely unachievable, there's no point in saving so you might as well have those experiences. Also I'd separate travel from those other things. Witnessing other cultures through travel is a very valuable experience IMO. Community? What's that?
    - malvosenior 8y ago
      That’s sort of my point. If you can’t afford those things are you really living a life of “incredible luxury”. As for travel, it depends. I have a lot of friends doing “Instagram travel”. Literally deciding where to go based on where they can snap the best shot. There are also a lot of people doing very touristy things that don’t provide any sort of insight or deep meaning.
      - brokenmachine 8y ago
        >As for travel, it depends. I have a lot of friends doing “Instagram travel”. Literally deciding where to go based on where they can snap the best shot. There are also a lot of people doing very touristy things that don’t provide any sort of insight or deep meaning. Even traveling like that, they might accidentally pick up some culture by osmosis on the way to their next selfie-spot...
aglavine 8y ago
I think that they eat out and order takeaway because they perceive that they never going to save enough money to afford a house.
- Sargos 8y ago
  It's a self fulfilling prophecy.
  - asdff 8y ago
    You aren't going to make much of dent into a housing savings forgoing occasional $8 carry out and the cheapest beers at the bar in your 20s.
- gcb0 8y ago
  and have less time to cook at home and need both parents working full time instead of one. etc.
- esotericn 8y ago
  Sure. In the UK it's not about saving, it's about income multipliers, which don't really involve financial discipline beyond the basic level of "have an emergency fund so you can interview properly". In a silly limiting example, imagine you earn 40K. It's not intractable to save enough to hit a 5%, 10%, or whatever deposit on a 1 million property. What is intractable is ever earning enough that 4x your income is equal to the remaining ~800-900K mortgage.
- gnicholas 8y ago
  A friend of mine complains about the young SV crowd that decry unaffordable real estate but also drive expensive cars. I think this is the same motivation that you describe, but on a grander scale. In this case, they're playing the startup lottery, and if they win it won't matter if they drove a Honda or an Audi. And if they lose, they'll have to leave SV when it comes time to buy a house. I don't personally subscribe to this mentality — I've seen other friends save up $50k, double it with patient investing, and then scrape together a down payment. Even if you end up leaving SV, having had property here can be a good investment.
huehehue 8y ago
They only need enough of an analysis to get a catchy article heading. Every day it's either "millennials are rich" or "millennials are poor". Millennials are poor: ~10% have $15k saved up https://www.cnbc.com/2018/02/09/a-growing-percentage-of-millennials-have-absolutely-nothing-saved.html https://www.cnbc.com/2018/02/09/a-growing-percentage-of-mill... Millennials are rich: ~47% have $15k saved up https://www.sfgate.com/personal-finance/article/Millennials-saving-more-salary-savings-generation-12522722.php https://www.sfgate.com/personal-finance/article/Millennials-... Avoid articles that stereotype any generation, because they're garbage that distort the truth to push agendas and generate clicks.
- mgbmtl 8y ago
  Not to mention articles that use an average instead of median. Millennials can seem rich on average, but poor on median, because of the growing wealth disparity.
- mjevans 8y ago
  Maybe 30-50 years ago having 15K saved up was rich. What can 15K get you today? An OK used car, maybe, and it's like 1/10th of the down-payment that's expected on a house that's still too far away from work, which you can't expect to stay at because no one has a stable career anymore.
  - dahfizz 8y ago
    Where do you live? I bought a car that was <2 years old with <30k miles for just under 8 grand. You can easily find good cars for less than $15k. In fact, 15k is nearly enough for a brand new nissan sentra. And with a median home price of $200k, $15k is nearly half of a down payment if you want to avoid mortgage insurance, and is plenty if youre willing to take on mortgage insurance.
    - mjevans 8y ago
      Arguably the price of the car is still near enough to estimate; 15K being a median figure in the ballpark. It's also not JUST the home price, it's the career, being able to expect to stay in the same area for a long time and generally do well. I happen to live near Seattle, but I think the same could be said of a majority of the 25 most populated metro-areas in the US, if not a similar proportion of cities in most other countries. https://en.wikipedia.org/wiki/List_of_metropolitan_statistical_areas#United_States https://en.wikipedia.org/wiki/List_of_metropolitan_statistic... I'm extrapolating that any place with >5% population growth over the ~10 year period is in a similar bind due to various policies.
jopsen 8y ago
It's often lost on us how much more you can buy for a dollar today vs. 40 years ago (when corrected for inflation).
- eppsilon 8y ago
  Excluding healthcare and higher education, unfortunately.
  - jopsen 8y ago
    Probably also housing. But if you look at healthcare you simply couldn't buy an insurance that offered 75% survival rate for cancer 40 years ago, today most insurances do.. I am not saying health insurance isn't too expensive and shouldn't be public. I'm saying product is better.
- drankula3 8y ago
  When corrected for inflation,I make 30% less than my father did right out of college.
  - jopsen 8y ago
    And yet, you are having a conversation with a European who haven't had breakfast yet -- and it's costing you next to nothing :) I'm not saying everything is fine and dandy. It's not. I'm saying we often underestimate what we take for granted today, that wasn't possible 40 years ago.
pacala 8y ago
It's a lot of fun to be in your '50s, have your body start to fall apart and be a few paychecks away from being thrown into the streets. But hey, you could afford having a few beers with your friends in your '20s. Or even take a holiday, you rich bastard.
- asdff 8y ago
  People have retirement accounts. People aren't taking cash out of their 401k early to get drunk with their friends on Friday (I hope). People in their 20s and 30s just aren't seeing much of a need to set aside otherwise disposable or earmarked money to one day use it all on a down payment for something that you don't NEED to ever actually own.
jandrese 8y ago
One of the things I've been contemplating is how student debt is a retirement issue. Especially with Social Security in a bind with all of the Baby Boomer retirements it's really important for people to take charge of their retirement early, but they can't if they are saddled with school debt. It adds up in a hurry too. Assumption: Average student loan debt in the US is $25,000 with a 6.8% interest rate, with a 10 year repayment plan. Graduation age is 21 and retirement age is 65. Market return rate is 7%. If you took that student loan money and instead invested it in the market after the 10 year loan period you would have $49,673. Leave it in the account until retirement and it grows to $495,642. Of course half a million bucks won't be worth as much in 2062, but the difference between having the loan and not is substantial. This is one of those cases where subsidies up front can save a whole lot of money in the long run.
gaius 8y ago
eat out, order takeaway, take holidays, go to bars, buy things for hobbies, buy clothes Right. When I was a student in the mid-90s students were poor. We wore second-hand clothes because they were cheap, not because they were “vintage fashion” (which costs as much or more than new!), we re-used teabags instead of Starbucks every day, we went to the market at closing time to buy for pennies the produce the stallholders were about to throw away instead of takeaways and eating out, we drank crap beer at the union instead of going to clubs, we used PCs in the library rather than having our own laptops... students today are massively wealthier in every way than we were, even accounting for loan repayments.
- dragonwriter 8y ago
  > When I was a student in the mid-90s students were poor. We wore second-hand clothes because they were cheap, not because they were “vintage fashion” (which costs as much or more than new!), we re-used teabags instead of Starbucks every day, we went to the market at closing time to buy for pennies the produce the stallholders were about to throw away instead of takeaways and eating out, we drank crap beer at the union instead of going to clubs, we used PCs in the library rather than having our own laptops... Virtually none of the students I knew when I was one I the 1990s did most of those things, more of the people I've known as students recently do them. (Yeah, we didn't have Starbucks per session, but we did have the overpriced trendy on-campus coffee stand with similar choices and, adjusted for inflation, higher prices then Starbucks has today, and it was busy constantly.)
SeanAppleby 8y ago
Hackernews is probably also an extremely skewed financial cross-section. Most of my friends from my higher education and career, as well as everyone I know who I've heard mention hackernews, are like you said, making more than their parents and enjoying a higher quality of life but still not planning on buying property because housing costs are too high in cities. But if I go back to the town where I grew up, most of the people I know that didn't move away to go to a good university or go into a field like tech or finance are worse off than their parents on any metric I can think of.
- mrskeltaljuice 8y ago
  This has been on my mind for some time. Coming from a lower middle-class background in the midwest, and currently working for low wages, I use HN comments to get a feel for how 'the other side' thinks. It's surreal to how alien a lot of the perspectives on HN are, even though many people here come from a similar background to mine.

enraged_camel 8y ago

What you are talking about is having higher quality of life, despite having lower wealth. But that's a separate subject in my opinion.

esotericn 8y ago
"Quality of life" is a problematic term in that context. Within bounds it's possible to compare. Two families living on the same street, one has $10k higher income than the other, the higher income family has (at least the potential for) a higher QoL. But comparing someone with a high income in a downtown flatshare who has an ~infinite entertainment budget to someone who is well on the way to owning a home outright in the suburbs is really hard (e.g. a 30yo in London, vs their parents at 30yo). The former doesn't have a higher or lower QoL than the latter because you can't define a benchmark without it being opinionated.
- Vraxx 8y ago
  I'll start by saying that I agree with your assessment of the underlying issue here, I just have a slight nitpick with your comparison. Other areas do exist that could allow people to move out of the city to a cheaper owned home in the suburbs. Personally I don't think that's a good solution though because suburbs are pretty inefficient and seem likely to exacerbate the climate problem we're running full speed into. I just wanted to point out that you can form some comparison because they are both still relatively attainable. (I might be mistaken on the real estate landscape in the UK since I'm from the US, if so just disregard this comment) My other comment is mostly aimed at GP, but it seems that it has persisted down the comment chain, which is that from everything I've heard and read, "Higher income, lower wealth" is not an accurate assessment of what is happening when you factor in inflation. It's more of "The same/lower income, lower wealth" on average. Even still though, given the ideals of a capitalist system saying that owning capital is literally worth capital itself, lower long term wealth is most definitely a long term problem because this is a runaway feedback loop of capital concentrating in the top and the lower non capital owning members of society are slaves to capital. You might be technically earning a wage and thus not fit the technical definition of slavery, but if you have less and less freedom (defined as less freedom through lack of actual choice) because of it, I see very little difference.
thomaskcr 8y ago
I think it's just hard to compare between the generations due to changes in how lifestyles are financed. My parents came out of school with no debt and were able to buy a house way before me. I came out of school with considerable debt and wasn't able to buy a house for a while. On the flip side, my parents talk about when I was first born and they had to choose between two toys because they couldn't afford both (a mirror and a little bird - maybe $20 each). I have never had an issue with access to money, even when I had nearly nothing in the bank and was paying down my student loans as fast as possible and something came up - a quick call to the bank was all that stood between me and enough to finance a full repair across the next 3 months instead of a bandaid. My parents didn't have that type of access to credit. Me and my dad worked in a similar role (software development - him for a bank, me for defense) out of college. Granted, even inflation adjusted I made a lot more than him right out of school. Also, even though my parents had a house way younger than me I wouldn't want a credit card with the interest rate my parents were paying on their house. It was insane.

gambiting 8y ago

Agreed. I live the life of incredible luxury compared to when my parents were my age, definitely in terms of "life experiences" and material possessions....except for housing. Getting on the property ladder seems like a dream that's very far away, even when working as an IT professional.

malvosenior 8y ago
I think it's worth noting that having a family is a "life experience" and a home is a "material possession". Many would argue that travel, dining out, bars... are shallow and hedonistic experiences while cultivating a family and community are enriching and rewarding.
- deleted 8y ago
  [deleted]
- brokenmachine 8y ago
  It's not very enticing to start a family when you're renting and have no stability though. When it seems like owning a home is completely unachievable, there's no point in saving so you might as well have those experiences. Also I'd separate travel from those other things. Witnessing other cultures through travel is a very valuable experience IMO. Community? What's that?
  - malvosenior 8y ago
    That’s sort of my point. If you can’t afford those things are you really living a life of “incredible luxury”. As for travel, it depends. I have a lot of friends doing “Instagram travel”. Literally deciding where to go based on where they can snap the best shot. There are also a lot of people doing very touristy things that don’t provide any sort of insight or deep meaning.
    - brokenmachine 8y ago
      >As for travel, it depends. I have a lot of friends doing “Instagram travel”. Literally deciding where to go based on where they can snap the best shot. There are also a lot of people doing very touristy things that don’t provide any sort of insight or deep meaning. Even traveling like that, they might accidentally pick up some culture by osmosis on the way to their next selfie-spot...

aglavine 8y ago

I think that they eat out and order takeaway because they perceive that they never going to save enough money to afford a house.

Sargos 8y ago
It's a self fulfilling prophecy.
- asdff 8y ago
  You aren't going to make much of dent into a housing savings forgoing occasional $8 carry out and the cheapest beers at the bar in your 20s.
gcb0 8y ago
and have less time to cook at home and need both parents working full time instead of one. etc.
esotericn 8y ago
Sure. In the UK it's not about saving, it's about income multipliers, which don't really involve financial discipline beyond the basic level of "have an emergency fund so you can interview properly". In a silly limiting example, imagine you earn 40K. It's not intractable to save enough to hit a 5%, 10%, or whatever deposit on a 1 million property. What is intractable is ever earning enough that 4x your income is equal to the remaining ~800-900K mortgage.
gnicholas 8y ago
A friend of mine complains about the young SV crowd that decry unaffordable real estate but also drive expensive cars. I think this is the same motivation that you describe, but on a grander scale. In this case, they're playing the startup lottery, and if they win it won't matter if they drove a Honda or an Audi. And if they lose, they'll have to leave SV when it comes time to buy a house. I don't personally subscribe to this mentality — I've seen other friends save up $50k, double it with patient investing, and then scrape together a down payment. Even if you end up leaving SV, having had property here can be a good investment.

huehehue 8y ago

They only need enough of an analysis to get a catchy article heading. Every day it's either "millennials are rich" or "millennials are poor". Millennials are poor: ~10% have $15k saved up https://www.cnbc.com/2018/02/09/a-growing-percentage-of-millennials-have-absolutely-nothing-saved.html https://www.cnbc.com/2018/02/09/a-growing-percentage-of-mill... Millennials are rich: ~47% have $15k saved up https://www.sfgate.com/personal-finance/article/Millennials-saving-more-salary-savings-generation-12522722.php https://www.sfgate.com/personal-finance/article/Millennials-... Avoid articles that stereotype any generation, because they're garbage that distort the truth to push agendas and generate clicks.

mgbmtl 8y ago
Not to mention articles that use an average instead of median. Millennials can seem rich on average, but poor on median, because of the growing wealth disparity.
mjevans 8y ago
Maybe 30-50 years ago having 15K saved up was rich. What can 15K get you today? An OK used car, maybe, and it's like 1/10th of the down-payment that's expected on a house that's still too far away from work, which you can't expect to stay at because no one has a stable career anymore.
- dahfizz 8y ago
  Where do you live? I bought a car that was <2 years old with <30k miles for just under 8 grand. You can easily find good cars for less than $15k. In fact, 15k is nearly enough for a brand new nissan sentra. And with a median home price of $200k, $15k is nearly half of a down payment if you want to avoid mortgage insurance, and is plenty if youre willing to take on mortgage insurance.
  - mjevans 8y ago
    Arguably the price of the car is still near enough to estimate; 15K being a median figure in the ballpark. It's also not JUST the home price, it's the career, being able to expect to stay in the same area for a long time and generally do well. I happen to live near Seattle, but I think the same could be said of a majority of the 25 most populated metro-areas in the US, if not a similar proportion of cities in most other countries. https://en.wikipedia.org/wiki/List_of_metropolitan_statistical_areas#United_States https://en.wikipedia.org/wiki/List_of_metropolitan_statistic... I'm extrapolating that any place with >5% population growth over the ~10 year period is in a similar bind due to various policies.

jopsen 8y ago

It's often lost on us how much more you can buy for a dollar today vs. 40 years ago (when corrected for inflation).

eppsilon 8y ago
Excluding healthcare and higher education, unfortunately.
- jopsen 8y ago
  Probably also housing. But if you look at healthcare you simply couldn't buy an insurance that offered 75% survival rate for cancer 40 years ago, today most insurances do.. I am not saying health insurance isn't too expensive and shouldn't be public. I'm saying product is better.
drankula3 8y ago
When corrected for inflation,I make 30% less than my father did right out of college.
- jopsen 8y ago
  And yet, you are having a conversation with a European who haven't had breakfast yet -- and it's costing you next to nothing :) I'm not saying everything is fine and dandy. It's not. I'm saying we often underestimate what we take for granted today, that wasn't possible 40 years ago.

pacala 8y ago

It's a lot of fun to be in your '50s, have your body start to fall apart and be a few paychecks away from being thrown into the streets. But hey, you could afford having a few beers with your friends in your '20s. Or even take a holiday, you rich bastard.

asdff 8y ago
People have retirement accounts. People aren't taking cash out of their 401k early to get drunk with their friends on Friday (I hope). People in their 20s and 30s just aren't seeing much of a need to set aside otherwise disposable or earmarked money to one day use it all on a down payment for something that you don't NEED to ever actually own.

jandrese 8y ago

One of the things I've been contemplating is how student debt is a retirement issue. Especially with Social Security in a bind with all of the Baby Boomer retirements it's really important for people to take charge of their retirement early, but they can't if they are saddled with school debt. It adds up in a hurry too. Assumption: Average student loan debt in the US is $25,000 with a 6.8% interest rate, with a 10 year repayment plan. Graduation age is 21 and retirement age is 65. Market return rate is 7%. If you took that student loan money and instead invested it in the market after the 10 year loan period you would have $49,673. Leave it in the account until retirement and it grows to $495,642. Of course half a million bucks won't be worth as much in 2062, but the difference between having the loan and not is substantial. This is one of those cases where subsidies up front can save a whole lot of money in the long run.

gaius 8y ago

eat out, order takeaway, take holidays, go to bars, buy things for hobbies, buy clothes Right. When I was a student in the mid-90s students were poor. We wore second-hand clothes because they were cheap, not because they were “vintage fashion” (which costs as much or more than new!), we re-used teabags instead of Starbucks every day, we went to the market at closing time to buy for pennies the produce the stallholders were about to throw away instead of takeaways and eating out, we drank crap beer at the union instead of going to clubs, we used PCs in the library rather than having our own laptops... students today are massively wealthier in every way than we were, even accounting for loan repayments.

dragonwriter 8y ago
> When I was a student in the mid-90s students were poor. We wore second-hand clothes because they were cheap, not because they were “vintage fashion” (which costs as much or more than new!), we re-used teabags instead of Starbucks every day, we went to the market at closing time to buy for pennies the produce the stallholders were about to throw away instead of takeaways and eating out, we drank crap beer at the union instead of going to clubs, we used PCs in the library rather than having our own laptops... Virtually none of the students I knew when I was one I the 1990s did most of those things, more of the people I've known as students recently do them. (Yeah, we didn't have Starbucks per session, but we did have the overpriced trendy on-campus coffee stand with similar choices and, adjusted for inflation, higher prices then Starbucks has today, and it was busy constantly.)

SeanAppleby 8y ago

Hackernews is probably also an extremely skewed financial cross-section. Most of my friends from my higher education and career, as well as everyone I know who I've heard mention hackernews, are like you said, making more than their parents and enjoying a higher quality of life but still not planning on buying property because housing costs are too high in cities. But if I go back to the town where I grew up, most of the people I know that didn't move away to go to a good university or go into a field like tech or finance are worse off than their parents on any metric I can think of.

mrskeltaljuice 8y ago
This has been on my mind for some time. Coming from a lower middle-class background in the midwest, and currently working for low wages, I use HN comments to get a feel for how 'the other side' thinks. It's surreal to how alien a lot of the perspectives on HN are, even though many people here come from a similar background to mine.