4 ms·

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.
- deleted 8y ago
  [deleted]
- deleted 8y ago
  [deleted]
asdff 8y ago
There really is no pressing need to ever own a house. What do I get with ownership over renting? Sure, the mortgage payments might be cheaper than a given rent, and perhaps the local housing market might work in my favor, but perhaps it won't! I might one day own a house, but that's not going to happen for at least a decade or more until my position rises from entry level to middle to a high-enough level where I actually have the liquid capital for a down payment on something worth dealing with a long term mortgage for, and have enough money set aside to deal with potential catastrophic repair or even just regular maintenance. Right now, if I come home and my roof is caved in, the floor is flooded, or my PSU explodes away half the house, I'm gonna shrug and call my landlord and renters insurance agency, and let them solve all these catastrophic problems on their time and their dime/ I'm in no hurry to get one, so I don't see a point to save specifically for a house at the expense of efficiency (spending 15 minutes to order and eat a meal vs. 1hr+ cooking one), or other more fruitful investment opportunities than home ownership. Not to mention, it would make moving around for better employment much more involved and stressful if I had a house I needed to sell or rent out in order to leave the city.

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.

deleted 8y ago
[deleted]
deleted 8y ago
[deleted]

asdff 8y ago

There really is no pressing need to ever own a house. What do I get with ownership over renting? Sure, the mortgage payments might be cheaper than a given rent, and perhaps the local housing market might work in my favor, but perhaps it won't! I might one day own a house, but that's not going to happen for at least a decade or more until my position rises from entry level to middle to a high-enough level where I actually have the liquid capital for a down payment on something worth dealing with a long term mortgage for, and have enough money set aside to deal with potential catastrophic repair or even just regular maintenance. Right now, if I come home and my roof is caved in, the floor is flooded, or my PSU explodes away half the house, I'm gonna shrug and call my landlord and renters insurance agency, and let them solve all these catastrophic problems on their time and their dime/ I'm in no hurry to get one, so I don't see a point to save specifically for a house at the expense of efficiency (spending 15 minutes to order and eat a meal vs. 1hr+ cooking one), or other more fruitful investment opportunities than home ownership. Not to mention, it would make moving around for better employment much more involved and stressful if I had a house I needed to sell or rent out in order to leave the city.