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I'm my early 20s and in the UK. I earn more than my Dad who is in his 50s. He managed to get a house, have money left over for an expensive hobby, decent car, t

I'm my early 20s and in the UK. I earn more than my Dad who is in his 50s. He managed to get a house, have money left over for an expensive hobby, decent car, the odd holiday etc. I'm a 90th percentile earner. Will 95+ percentile earner in a few years time. Yet it feels like I am not as well off as I should be. I don't live in an expensive area either. Yet I need to save so much money to even have the opportunity to buy a house. Then I also need to save a tonne of money for a nice retirement as government pensions get absolutely gutted. I'm not going to pretend I won't have a good amount of disposable income even after maxing my pension contributions and paying a mortgage. But it just annoys me that I'm a relatively high earner and yet the money won't go very far. The most expensive thing I'll ever buy would be a brick box, and one that's not even as good as my parents.

tonyedgecombe 6y ago
I’m in my mid fifties and I have never had a company pension, defined benefit or contribution. I saw my first house decline in value by 25%. We had interest rates peaking at 15%. I didn’t have student loans but only because I didn’t go to university, just like 90% of my peer group. Unemployment was much higher than it is now and schools were teaching subjects for obsolete careers. It wasn’t as rosey as it is often portrayed.
- xenonite 6y ago
  Okay, but we’re you in the 90+ percentile like the OP? What happened to those that were in that range 30 years ago?
- dweekly 6y ago
  RE: "unemployment was much higher than it is now" - I'm not sure what country you're in, but here is a graph of the US unemployment rate since 1950: https://fred.stlouisfed.org/series/UNRATE https://fred.stlouisfed.org/series/UNRATE (unemployment was higher this year than any other period on the chart)
  - tonyedgecombe 6y ago
    UK, as per the user who I replied to.
    - mikestew 6y ago
      Regardless, the U. S. had super-high interest rates at that time, too. 12% sticks in my head, but it was also the time of the Variable Interest Rate loan, where I watched co-workers really have to tighten those budgets and almost lose the house because interest rates went from "ungodly high" to "ridiculously high".
  - lsllc 6y ago
    Unemployment in the US has been at its lowest (3.5%) AND then highest (14.7%) levels in 50 years, both in 2020! https://www.statista.com/statistics/273909/seasonally-adjusted-monthly-unemployment-rate-in-the-us/ https://www.statista.com/statistics/273909/seasonally-adjust...
- jbay808 6y ago
  How old were you when you bought that first house?
- Gunax 6y ago
  Everyone will argue with their own statistics, but I think your general sentiment is correct. Everyone seems to think the oldies had it easy in the good ol' days and the youngens are a bunch of lazy good-for-nothins. There are probably certain a ways it has gotten easier and others in which it is worse... But I think this is more about generational sentiment than actual facts.
  - 0xB31B1B 6y ago
    thats not really true though, we have the numbers. In real terms, education, healthcare, and housing costs have grown at a much higher rate than inflation. It is more expensive to go to college, pay rent, and stay healthy now than it was 30/40/50 years ago.
    - 0x6862 6y ago
      Housing seems to be the primary issue, but you’ll find very little support for actually fixing the issue - more and taller buildings in densely populated areas. I don’t think people have a problem with spending more on education, they just want a reasonable return on investment for it. Turns out pumping money into monopolistic schools doesn’t get you a better result
      - novok 6y ago
        The olds don't want it because it decreases the value of their boomer bank account (houses) and being old, don't like change in general.
        klmadfejno 6y ago
        The boomer generation was more or less promised that housing was the key to social mobility. And it was for a large number of people. It's hard for that to remain true now, and there's a ton of negative externalities. It's not like these people were experts on real estate policy before, they just don't have perspective on how it differs for the young. "Not liking change" is disingenuous, even if, broadly speaking, older people don't actually like change
- Havoc 6y ago
  I think you're missing how pervasive & broad the issues are these days. You mentioned you had a house. I'm fast approach the top 1-2% by income and think I can maybe swing a 1 bed apartment. It'll be borderline. Not house...apartment. ...no idea what the other 98% of my peers are doing but they sure as hell aren't buying houses. Meanwhile all the landlords I've rented from thus far where a generation older and had entire portfolios of properties. Pretty sure I'll come out on top of this because I'm doing well, but can certainly understand the disillusionment of the younger generation
  - c-rhodes 6y ago
    Then you must be living in a really expensive city.
    - medium_burrito 6y ago
      It's a combination of good jobs being in expensive cities, purchasing power dropping and epic (god I hate word) asset inflation. That said remote work makes middle american and rest of the world post wuflu much more possible. I wonder what will happen to big expensive cities after all the young people leave for the midwest and south?
    - Havoc 6y ago
      Yup. London. In the land of limp pay cheques (compared to US). Financial sector means being in a financial hub though so not much choice. I'll probably end up moving further out and accepting a long commute eventually.
      - novok 6y ago
        Why not move to SF or NYC if your in tech or finance?
        535188B17C93743 6y ago
        You say it like it's super simple...
- csomar 6y ago
  > I saw my first house decline in value by 25%. This rarely matters unless you are looking to sell or borrow against. > We had interest rates peaking at 15%. But inflation was higher at the time. Also rates are 0% now at the Fed level, but if you are a consumer you are going to pay a bit depending on your credit score. > I didn’t have student loans but only because I didn’t go to university, just like 90% of my peer group. The governments (it's really a global phenomena) pushed the general public into universities. It's hard to blame the students when you take that decision at a very early age 17-19 and most of these youth doesn't have any life experience. > Unemployment was much higher than it is now I highly suspect the current unemployment rate is meaningful. To be counted as jobless, you need to register with the local employment office. It's possible today's youth no longer rely on that and use modern alternatives instead. > schools were teaching subjects for obsolete careers They still are. > It wasn’t as rosey as it is often portrayed. It was not. The only difference really is land and housing which was significantly more affordable and did matter less where you lived. Now you need to live next to a "jobs-hub" that have insanely high rent and purchase prices.
  - klmadfejno 6y ago
    If you buy a house worth 4x your salary (in the ballpark of average), a 25% decline in home value means you need to spend an entire year of labor just to break even, ignoring the obvious associated living costs. The decline doesn't matter if it's temporary, but they're not always temporary. That sounds incredibly demoralizing.
    - xenonite 6y ago
      On the other hand, renting an apartment translates to a 100% decline in value (and 0% ownership).
      - klmadfejno 6y ago
        Renting is not a leveraged loan worth multiple times your annual income. Home ownership may generally be better than renting. But home ownership and value decline is much much worse.
- xenonite 6y ago
  I think it’s good that you were able to own a house even though it lost in value. This ownership still sounds better to me than only being able to rent an apartment. Renting always means that the payments lead to 0% ownership in the end, hence a 100% decline in value.
qwerty1234599 6y ago
High tax rates are what causes this. You are effectively giving away half your wage to sustain a completely unknown person leeching off the government.
- deleted 6y ago
  [deleted]
- messe 6y ago
  This is blatantly false. Income tax on higher earners in the UK has decreased since the 1970s/1980s when IIRC the highest tax bands were over 70%, if not higher.
  - luckylion 6y ago
    Have they fallen generally, or has the highest tax band fallen? Germany had the highest tax rate > 50%, it's now 42/45%. At the same time, the income required to be taxed at that rate hasn't changed with inflation, so while it was e.g. 52.152€ in 2002, it's 57.051€ now - adjusted for inflation, it would have to be closer to 75k€. Lowering the top marginal tax while not adjusting for inflation so more people get pushed into higher tax brackets from below is great if you're rich, but shit if you're not.
    - ulfw 6y ago
      Erm it's also not great when you're rich. Either way you're being taxed more year by year (in adjusted inflation euros)
      - luckylion 6y ago
        If you're going from 70% to 50% (or from 57% to 45%), I'd say that's pretty great.
    - iso1631 6y ago
      90%ile now is £55k a year and gives you £40,543.60 net. £55k today is £32,461 in 2000. In 2000 someone on £32,461 had a take home pay of £24,080 -- the equivalent of £40,800 today. So not much change.
quaffapint 6y ago
I chalk it up to things simply costing more. I make more than my dad did. I dont take any major vacations, go out much, or live in a McMansion, yet we struggle to save.As a kid we took lots of vacations, they saved a good amount of money (stock market was good for them) and are doing well for themselves. I imagine it's only going to be worse for my kids.
- wernercd 6y ago
  My problem with "life" is all the... nickle and dimes... $10 for Nextflix, $90 for Amazon, etc. On top of Gas, Electric, Phone, Internet, Car, Insurance, Gas, etc. It's easy to watch the money flow in... and right back out.
  - moopling 6y ago
    pretty sure my problem is >50% of my pay goes on rent :P
  - PaulStatezny 6y ago
    But the thing is, nobody said you have to pay for Netflix or Amazon. Each person is responsible for making good choices with his or her money. Lack of financial discipline is not society's fault. Yes, managing finances takes some level of skill when there are many different expenses in a modern personal budget. But there are ways to live frugally and get ahead. They just aren't flashy or fun. On two very small incomes my wife and I made big financial strides early in our marriage. We were very frugal but we made it work. We had the lowest tier Internet. We had a very conservative budget for eating out and groceries. We didn't have Netflix or Amazon. Once we paid off a number of debts, our spending was able to increase responsibly. Edit: More tactful wording.
    - _qulr 6y ago
      Standard Netflix is $12.99 per month currently. So that's $155.88 per year. Over 4 years, $623.52. You didn't pay off $60k in student loan debt and buy a house by refraining from Netflix.
feralimal 6y ago
Give it a few months and I think house prices will fall!
- shuckles 6y ago
  Home prices falling because many people’s incomes have gone to $0 is bad for affordability.
- onion2k 6y ago
  House prices will never fall significantly. As soon as a house enters the market at anything below the going rate it's bought by a landlord or a rental company. This will keep house prices high forever.
  - brianlweiner 6y ago
    What's your model?
    - zxcmx 6y ago
      My mental model is that there's too much wealth sloshing around for "large incomes" to make too much difference. High income is like delta-v, it's great. But you're still near the ground, and you're competing against people already in high orbit. The beneficiaries of the housing explosion have equity which they can parlay into more ownership, whether for themselves as investments or their children. Record low interest rates help prices by letting people lever up (letting them spend their lifetime earnings now) to compete but of course also bids up prices, again to the benefit of existing homeowners. This is reflected in the fact that (for example) in the U.K over 1/3 of first time buyers did it by getting money from their parents: https://www.gov.uk/government/news/first-time-buyers-relying-on-parents-to-get-onto-housing-ladder https://www.gov.uk/government/news/first-time-buyers-relying... Furthermore, in the UK, Australia and NZ (less familiar with the US or Canada) it seems the government will move heaven and earth to prop up housing. High immigration rates and supply restriction have not been helping. I'm not as convinced as GP that the situation can last "forever", but I could see it lasting for another couple of decades. A true housing collapse would probably be a phyrric victory for the young.
mcv 6y ago
I'm no millennial, but gen-X. My brick box is okay. Not as big as the one my parents had, but it's in a bigger city, which really adds to the cost. But my wife and I are double earners, unlike my parents. And we both have really good jobs. We don't have it hard, but we don't drive new cars either; we've got a second hand Prius. The only sign that we've got it good is that our house in Amsterdam is not as tiny as most. But I also wonder if maybe our expectations may be too high due to the constant stream of luxury lifestyles that we're being fed on TV, in movies and on other media.
- ryandrake 6y ago
  I'm "X" as well and while I grew up it never occurred to me that owning a single tiny home would one day be considered a luxury. I was raised by a single dad who, on one tiny teacher salary ended up with two houses, all sorts of motorized "toys", financial security and a pension by the time he retired. I probably make 3-4X what he did at the top of his career, and am kind-of hanging on to a house with a tough mortgage and a no-frills lifestyle. My Millennial and younger colleagues' financial lives are even more of a disaster. I remember when someone reported that GenX was the first generation for a long time whose finances were expected to be on average worse than the previous generation. It looks like this trend has continued at least 2 or 3 more generations. It's not a blip, it's the new actual trajectory.
  - s1artibartfast 6y ago
    Assuming your father's peak income was in 1980, inflation has been about %315
    - mcv 6y ago
      With middle class incomes stagnated since about 1980, it's no surprise everybody feels a lot poorer now. They have a quarter of the effective income people in a similar position had in 1980.
      - s1artibartfast 6y ago
throwawaygh 6y ago
Comparing a salary with a pension to a salary without a pension is insanity. Wages are not stagnant. They've declined precipitously. take-home pay is stagnant and pensions are dead.
- jjoonathan 6y ago
  And real-estate has been pumped so heavily with low interest rates that you either can't afford it or, if you can, you get to sleep with the knowledge that the music has a good chance of stopping on your watch.
- throwaway287391 6y ago
  Just for the record, I think "pension" in the UK means something quite different than it does in the US. A UK pension is (usually?) more like a US 401(k).
- Philip-J-Fry 6y ago
  I'm confused. We both have pensions.
  - iso1631 6y ago
    Is his a final salary or other defined benefits pension?
  - lotsofpulp 6y ago
    In the UK, they refer to defined contribution and defined benefit as pension. In the US, pension is short for “defined benefit” pension, which is an annuity beginning at a specified retirement age. The liability for providing that benefit does not lie with the recipient of the defined benefit, but with the employer (or government). A defined contribution pension is one where the recipient of the benefit owns and controls the assets that will be used to pay the retirement benefits, hence the recipient is liable for making sure to have sufficient savings and the right investments to be able to pay themselves in retirement. In the US, social security is the defined benefit pension available to everyone provided by the federal government. However, it is prudent to expect defined benefit pensions to decrease in value as the retirement ages are increased, and benefit amounts and future value of money are decreased due to slowing economic growth in most developed countries.
JanisL 6y ago
Monetary policy is a huge factor in all this, asset holders are greatly advantaged over productive members of society at the moment. The combination of artificially low interest rates with significant inflation in particular make housing spectacularly unaffordable. This combination simultaneously pushes up the costs of housing due to asset bubbles forming while reducing the ability of people who earn money to save for a down payment on a house.
dorkwood 6y ago
I feel the same. I'm not earning quite as much you are, but still doing better than most of my peers. None of the millennial spending tropes apply to me, either, since I don't buy anything outside of the usual bag of groceries once a week. What's especially worrying is that if I'm "doing well", and I'm so screwed, what's going to happen to the rest of the population below me?
gpapilion 6y ago
I’ve thought about this a lot. My parents had 2 TVs in a house of five(and one was junk). We had stick on vinyl floors, and a cheap white appliances. Counter tops were linoleum, and we had 1.5 baths. I cut the lawn, and we went shopping in stores. We took two vacations requiring planes for the first 13 years of my life. Most vacations were camping. We rarely went out to eat. We didn’t have computers. We had 1 corded phone in the house. This is in stark contrast to my house. We have two iPhones and get new ones every 2-3 years. We have two iPads, 3 computers, and gadgets galore in a house of 4. My countertops are stone, my appliances are stainless. We go on vacations yearly that require planes and hotel, and used to eat out often. I have a house cleaner, and pay for an expensive gym. I realize I may not have the house my parents have, but I have nicer things. I make more money but I spend it very differently then they did. There was basically nothing we bought that compares to an iPhone every 2-3 years. I know so many people who travel regularly, and don’t seem to realize this was rare 15 years ago. I really feel we spend our money differently.
- vertbhrtn 6y ago
  Your countertops or your landlord's countertops? Because all the rest - all those iphones & vacations - is cheap fluff, really.
  - abnry 6y ago
    That's the point. The cheap fluff today was expensive stuff yesteryear, if it existed at all.
    - tstrimple 6y ago
      Seems like the ol' "poor people aren't really poor because they almost all have refrigerators and not even kings had refrigerators two hundred years ago!" argument.
      - mensetmanusman 6y ago
        The counter to your strawman is that you are poor if you feel poor. Since we have proven that a majority of people feel poor (i.e. they need to earn 20% more), and that this is true even of millionaire’s, we need a different definition of poor, because something isn’t right here...
throwaway0a5e 6y ago
Your house has smoke detectors and a dishwasher. Your car has airbags. When you decide you want to build a garden shed behind that brick box you need to get permission from the town and pay for that permission. Your dad didn't have any of that stuff. You more or less need a smartphone to function in modern society. There's more wealth sloshing around and more (in terms of quantity, probably not proportion) of it comes your way but you're not getting any freedom to do the things you want to do from that wealth because society takes a huge chunk of it and earmarks it for things and you don't get to use it to take a vacation or whatever. Basically standards of living have inflated and there's no choice not to buy in. Also the interest rates vs asset prices thing other commenters have mentioned isn't helping.
- pradn 6y ago
  I see this argument, but it has limits. A seasonal farmworker today has access to Google and Wikipedia, but they are still working 12 hour days. They are less likely to get communicable diseases due to vaccination and disease eradication, but hospital stays are more prohibitively expensive than before. It's complex.
- jbay808 6y ago
  My dad did have a dishwasher and smoke detectors... Actually, I'm less likely to have a dishwasher than he was, because of space constraints.
TheOtherHobbes 6y ago
The post-WWII generation were able to buy a house plus car/holidays/etc on one person's median working class salary. It wasn't a particularly palatial house, but the mortgage would have been paid off before retirement. But this is a direct consequence of a rent-seeking economy which uses property rights as a proxy for political influence. The British economy started being converted from an industrial economy to a patrician rent-seeking speculative economy in the 80s, and the result was massive asset price inflation in property and shares. This wasn't an accident. It made a certain kind of person extremely rich, and most other people increasingly poor to varying degrees. Unless there's a change in strategy - unlikely - you can expect the wealth concentration to continue in the UK, with increasing danger to the personal circumstances of any kids you have - if not to yourself if there's a serious downturn. Even a 95%er is in danger of losing their property if they lose their job for an extended period if they don't live off speculative investments and rent.
- kradroy 6y ago
  >Unless there's a change in strategy - unlikely - you can expect the wealth concentration to continue in the UK, with increasing danger to the personal circumstances of any kids you have - if not to yourself if there's a serious downturn. It's the same in the US. >Even a 95%er is in danger of losing their property if they lose their job for an extended period if they don't live off speculative investments and rent. I fear this the most. My husband and I make more money than the rest of our family combined (both mothers, both fathers, 4 adult siblings, their spouses), but I still feel uneasy about the future. Maybe everyone worries more during uncertain times, but being mid-career with savings/investments I never thought I'd be concerned about losing everything.
ArkVark 6y ago
You are paying for your Dad's pension, and for the Government services consumed by millions of migrants. Those same migrants increase labor supply (thus lowering the equilibrium price) and increase demand for land and real estate. The end result is high taxes and high real estate cost. Of immense benefit to your dad (and other Baby Boomers) who receive risk-free pensions, and supercharged capital gains for their own assets.
- petr_tik 6y ago
  I don’t understand why you are downvoted. Millions might, not necessarily though, be an overestimate, but I agree with the analysis in principle. Disclaimer: I’m an immigrant.
dang 6y ago
(We detached this subthread from https://news.ycombinator.com/item?id=24491909 https://news.ycombinator.com/item?id=24491909.)
user5994461 6y ago
For reference, 95% percentile would be somewhere around £100k a year in London. (If you look at working men aged 25-55 the number should be a fair bit higher) I don't know what you earn but if you are early 20s it might be less than that. There is a lot of money floating in London, the price of homes almost make sense when you realize what the top earners actually earn, the few percents competing for the same homes.
jiveturkey 6y ago
You're comparing yourself to the wrong baseline. The opportunities now are different than they were 30 years ago. You also might be comparing yourself to a specific data point (your dad), vs statistically. > I'm a 90th percentile earner. Will 95+ percentile earner in a few years time. Yet it feels like I am not as well off as I should be. You should correct your attitude then, don't you think? You are a 90%ile earner. I don't know what "should" implies, but put it in terms of where you "are". You'll be happier.
medium_burrito 6y ago
The other critical factor is instability in the sense that we can lose our jobs at any time. It makes it very difficult to plan long term if you expect your industry to get offshored, or automated, or generally collapse somehow. Even if these calamities don't happen to you, you'll still switch jobs way more than the previous generation.
MuffinFlavored 6y ago
> I'm a 90th percentile earner. Will 95+ percentile earner in a few years time. How much is that in the UK?
- e-dard 6y ago
  90th percentile is about £47K, 95th percentile is about £60K. Assuming gross income.
  - MuffinFlavored 6y ago
    As of 2019 --- US 90th percentile: $184k (£144.3k) US 95th percentile: $248k (£194.6k) kind of a silly thing to say you are a 95th percentile British earner when that puts you in the 25-50th percentile in America.
- Stevvo 6y ago
  https://www.gov.uk/government/statistics/percentile-points-from-1-to-99-for-total-income-before-and-after-tax https://www.gov.uk/government/statistics/percentile-points-f...
petr_tik 6y ago
If you are London based, you should also factor in that London real estate’s qualitative transformation in the last 40 years. It used to be real estate, you know, local people buying homes to live in. Now it’s one of the best performing asset classes in the world. You aren’t competing for property with your mates with a big inheritance. You are competing with dodgy oil money that needs to be laundered and more honest international investors told to diversify. The rule of law is a precious and rare component of legal infrastructure, so a lot of money is diversified into jurisdictions with strong guarantees. I’m generally a pro-market person. In the case of UK real estate, I support a ban on non-residents buying property similar to what Canada have.
Pokepokalypse 6y ago
As an engineer in his 50's (USA) - I am also a 90th percentile earner, but I absolutely agree, I'm nowhere near as well off as my parents were at my age. I never had the money to take my kids on nice vacations every year like my parents did. Also never had the money to justify buying a new car. And while I do have a home, I have no hope of paying it off before retirement. (which, as an engineer, in the USA, could be 1-5 years from now, involuntarily - my father worked for the same company his whole life, while I've had to change jobs 6 times, due to either corporate buyouts or layoffs. NEVER had a bad performance review). All of my kids, my brother and sister's kids (all in their 20's now), are all very much struggling, barely making it (and in a couple of cases, NOT making it). Only ONE of them (my son) got through college and found a reasonably decent job, and even HE is so bogged down with student loans, he may never own a home. So as a picture of 3 generations, there's a very clear trend.

tonyedgecombe 6y ago

I’m in my mid fifties and I have never had a company pension, defined benefit or contribution. I saw my first house decline in value by 25%. We had interest rates peaking at 15%. I didn’t have student loans but only because I didn’t go to university, just like 90% of my peer group. Unemployment was much higher than it is now and schools were teaching subjects for obsolete careers. It wasn’t as rosey as it is often portrayed.

xenonite 6y ago
Okay, but we’re you in the 90+ percentile like the OP? What happened to those that were in that range 30 years ago?
dweekly 6y ago
RE: "unemployment was much higher than it is now" - I'm not sure what country you're in, but here is a graph of the US unemployment rate since 1950: https://fred.stlouisfed.org/series/UNRATE https://fred.stlouisfed.org/series/UNRATE (unemployment was higher this year than any other period on the chart)
- tonyedgecombe 6y ago
  UK, as per the user who I replied to.
  - mikestew 6y ago
    Regardless, the U. S. had super-high interest rates at that time, too. 12% sticks in my head, but it was also the time of the Variable Interest Rate loan, where I watched co-workers really have to tighten those budgets and almost lose the house because interest rates went from "ungodly high" to "ridiculously high".
- lsllc 6y ago
  Unemployment in the US has been at its lowest (3.5%) AND then highest (14.7%) levels in 50 years, both in 2020! https://www.statista.com/statistics/273909/seasonally-adjusted-monthly-unemployment-rate-in-the-us/ https://www.statista.com/statistics/273909/seasonally-adjust...
jbay808 6y ago
How old were you when you bought that first house?
Gunax 6y ago
Everyone will argue with their own statistics, but I think your general sentiment is correct. Everyone seems to think the oldies had it easy in the good ol' days and the youngens are a bunch of lazy good-for-nothins. There are probably certain a ways it has gotten easier and others in which it is worse... But I think this is more about generational sentiment than actual facts.
- 0xB31B1B 6y ago
  thats not really true though, we have the numbers. In real terms, education, healthcare, and housing costs have grown at a much higher rate than inflation. It is more expensive to go to college, pay rent, and stay healthy now than it was 30/40/50 years ago.
  - 0x6862 6y ago
    Housing seems to be the primary issue, but you’ll find very little support for actually fixing the issue - more and taller buildings in densely populated areas. I don’t think people have a problem with spending more on education, they just want a reasonable return on investment for it. Turns out pumping money into monopolistic schools doesn’t get you a better result
    - novok 6y ago
      The olds don't want it because it decreases the value of their boomer bank account (houses) and being old, don't like change in general.
      - klmadfejno 6y ago
        The boomer generation was more or less promised that housing was the key to social mobility. And it was for a large number of people. It's hard for that to remain true now, and there's a ton of negative externalities. It's not like these people were experts on real estate policy before, they just don't have perspective on how it differs for the young. "Not liking change" is disingenuous, even if, broadly speaking, older people don't actually like change
Havoc 6y ago
I think you're missing how pervasive & broad the issues are these days. You mentioned you had a house. I'm fast approach the top 1-2% by income and think I can maybe swing a 1 bed apartment. It'll be borderline. Not house...apartment. ...no idea what the other 98% of my peers are doing but they sure as hell aren't buying houses. Meanwhile all the landlords I've rented from thus far where a generation older and had entire portfolios of properties. Pretty sure I'll come out on top of this because I'm doing well, but can certainly understand the disillusionment of the younger generation
- c-rhodes 6y ago
  Then you must be living in a really expensive city.
  - medium_burrito 6y ago
    It's a combination of good jobs being in expensive cities, purchasing power dropping and epic (god I hate word) asset inflation. That said remote work makes middle american and rest of the world post wuflu much more possible. I wonder what will happen to big expensive cities after all the young people leave for the midwest and south?
  - Havoc 6y ago
    Yup. London. In the land of limp pay cheques (compared to US). Financial sector means being in a financial hub though so not much choice. I'll probably end up moving further out and accepting a long commute eventually.
    - novok 6y ago
      Why not move to SF or NYC if your in tech or finance?
      - 535188B17C93743 6y ago
        You say it like it's super simple...
csomar 6y ago
> I saw my first house decline in value by 25%. This rarely matters unless you are looking to sell or borrow against. > We had interest rates peaking at 15%. But inflation was higher at the time. Also rates are 0% now at the Fed level, but if you are a consumer you are going to pay a bit depending on your credit score. > I didn’t have student loans but only because I didn’t go to university, just like 90% of my peer group. The governments (it's really a global phenomena) pushed the general public into universities. It's hard to blame the students when you take that decision at a very early age 17-19 and most of these youth doesn't have any life experience. > Unemployment was much higher than it is now I highly suspect the current unemployment rate is meaningful. To be counted as jobless, you need to register with the local employment office. It's possible today's youth no longer rely on that and use modern alternatives instead. > schools were teaching subjects for obsolete careers They still are. > It wasn’t as rosey as it is often portrayed. It was not. The only difference really is land and housing which was significantly more affordable and did matter less where you lived. Now you need to live next to a "jobs-hub" that have insanely high rent and purchase prices.
- klmadfejno 6y ago
  If you buy a house worth 4x your salary (in the ballpark of average), a 25% decline in home value means you need to spend an entire year of labor just to break even, ignoring the obvious associated living costs. The decline doesn't matter if it's temporary, but they're not always temporary. That sounds incredibly demoralizing.
  - xenonite 6y ago
    On the other hand, renting an apartment translates to a 100% decline in value (and 0% ownership).
    - klmadfejno 6y ago
      Renting is not a leveraged loan worth multiple times your annual income. Home ownership may generally be better than renting. But home ownership and value decline is much much worse.
xenonite 6y ago
I think it’s good that you were able to own a house even though it lost in value. This ownership still sounds better to me than only being able to rent an apartment. Renting always means that the payments lead to 0% ownership in the end, hence a 100% decline in value.

qwerty1234599 6y ago

High tax rates are what causes this. You are effectively giving away half your wage to sustain a completely unknown person leeching off the government.

deleted 6y ago
[deleted]
messe 6y ago
This is blatantly false. Income tax on higher earners in the UK has decreased since the 1970s/1980s when IIRC the highest tax bands were over 70%, if not higher.
- luckylion 6y ago
  Have they fallen generally, or has the highest tax band fallen? Germany had the highest tax rate > 50%, it's now 42/45%. At the same time, the income required to be taxed at that rate hasn't changed with inflation, so while it was e.g. 52.152€ in 2002, it's 57.051€ now - adjusted for inflation, it would have to be closer to 75k€. Lowering the top marginal tax while not adjusting for inflation so more people get pushed into higher tax brackets from below is great if you're rich, but shit if you're not.
  - ulfw 6y ago
    Erm it's also not great when you're rich. Either way you're being taxed more year by year (in adjusted inflation euros)
    - luckylion 6y ago
      If you're going from 70% to 50% (or from 57% to 45%), I'd say that's pretty great.
  - iso1631 6y ago
    90%ile now is £55k a year and gives you £40,543.60 net. £55k today is £32,461 in 2000. In 2000 someone on £32,461 had a take home pay of £24,080 -- the equivalent of £40,800 today. So not much change.

quaffapint 6y ago

I chalk it up to things simply costing more. I make more than my dad did. I dont take any major vacations, go out much, or live in a McMansion, yet we struggle to save.As a kid we took lots of vacations, they saved a good amount of money (stock market was good for them) and are doing well for themselves. I imagine it's only going to be worse for my kids.

wernercd 6y ago
My problem with "life" is all the... nickle and dimes... $10 for Nextflix, $90 for Amazon, etc. On top of Gas, Electric, Phone, Internet, Car, Insurance, Gas, etc. It's easy to watch the money flow in... and right back out.
- moopling 6y ago
  pretty sure my problem is >50% of my pay goes on rent :P
- PaulStatezny 6y ago
  But the thing is, nobody said you have to pay for Netflix or Amazon. Each person is responsible for making good choices with his or her money. Lack of financial discipline is not society's fault. Yes, managing finances takes some level of skill when there are many different expenses in a modern personal budget. But there are ways to live frugally and get ahead. They just aren't flashy or fun. On two very small incomes my wife and I made big financial strides early in our marriage. We were very frugal but we made it work. We had the lowest tier Internet. We had a very conservative budget for eating out and groceries. We didn't have Netflix or Amazon. Once we paid off a number of debts, our spending was able to increase responsibly. Edit: More tactful wording.
  - _qulr 6y ago
    Standard Netflix is $12.99 per month currently. So that's $155.88 per year. Over 4 years, $623.52. You didn't pay off $60k in student loan debt and buy a house by refraining from Netflix.

feralimal 6y ago

Give it a few months and I think house prices will fall!

shuckles 6y ago
Home prices falling because many people’s incomes have gone to $0 is bad for affordability.
onion2k 6y ago
House prices will never fall significantly. As soon as a house enters the market at anything below the going rate it's bought by a landlord or a rental company. This will keep house prices high forever.
- brianlweiner 6y ago
  What's your model?
  - zxcmx 6y ago
    My mental model is that there's too much wealth sloshing around for "large incomes" to make too much difference. High income is like delta-v, it's great. But you're still near the ground, and you're competing against people already in high orbit. The beneficiaries of the housing explosion have equity which they can parlay into more ownership, whether for themselves as investments or their children. Record low interest rates help prices by letting people lever up (letting them spend their lifetime earnings now) to compete but of course also bids up prices, again to the benefit of existing homeowners. This is reflected in the fact that (for example) in the U.K over 1/3 of first time buyers did it by getting money from their parents: https://www.gov.uk/government/news/first-time-buyers-relying-on-parents-to-get-onto-housing-ladder https://www.gov.uk/government/news/first-time-buyers-relying... Furthermore, in the UK, Australia and NZ (less familiar with the US or Canada) it seems the government will move heaven and earth to prop up housing. High immigration rates and supply restriction have not been helping. I'm not as convinced as GP that the situation can last "forever", but I could see it lasting for another couple of decades. A true housing collapse would probably be a phyrric victory for the young.

mcv 6y ago

I'm no millennial, but gen-X. My brick box is okay. Not as big as the one my parents had, but it's in a bigger city, which really adds to the cost. But my wife and I are double earners, unlike my parents. And we both have really good jobs. We don't have it hard, but we don't drive new cars either; we've got a second hand Prius. The only sign that we've got it good is that our house in Amsterdam is not as tiny as most. But I also wonder if maybe our expectations may be too high due to the constant stream of luxury lifestyles that we're being fed on TV, in movies and on other media.

ryandrake 6y ago
I'm "X" as well and while I grew up it never occurred to me that owning a single tiny home would one day be considered a luxury. I was raised by a single dad who, on one tiny teacher salary ended up with two houses, all sorts of motorized "toys", financial security and a pension by the time he retired. I probably make 3-4X what he did at the top of his career, and am kind-of hanging on to a house with a tough mortgage and a no-frills lifestyle. My Millennial and younger colleagues' financial lives are even more of a disaster. I remember when someone reported that GenX was the first generation for a long time whose finances were expected to be on average worse than the previous generation. It looks like this trend has continued at least 2 or 3 more generations. It's not a blip, it's the new actual trajectory.
- s1artibartfast 6y ago
  Assuming your father's peak income was in 1980, inflation has been about %315
  - mcv 6y ago
    With middle class incomes stagnated since about 1980, it's no surprise everybody feels a lot poorer now. They have a quarter of the effective income people in a similar position had in 1980.
    - s1artibartfast 6y ago

throwawaygh 6y ago

Comparing a salary with a pension to a salary without a pension is insanity. Wages are not stagnant. They've declined precipitously. take-home pay is stagnant and pensions are dead.

jjoonathan 6y ago
And real-estate has been pumped so heavily with low interest rates that you either can't afford it or, if you can, you get to sleep with the knowledge that the music has a good chance of stopping on your watch.
throwaway287391 6y ago
Just for the record, I think "pension" in the UK means something quite different than it does in the US. A UK pension is (usually?) more like a US 401(k).
Philip-J-Fry 6y ago
I'm confused. We both have pensions.
- iso1631 6y ago
  Is his a final salary or other defined benefits pension?
- lotsofpulp 6y ago
  In the UK, they refer to defined contribution and defined benefit as pension. In the US, pension is short for “defined benefit” pension, which is an annuity beginning at a specified retirement age. The liability for providing that benefit does not lie with the recipient of the defined benefit, but with the employer (or government). A defined contribution pension is one where the recipient of the benefit owns and controls the assets that will be used to pay the retirement benefits, hence the recipient is liable for making sure to have sufficient savings and the right investments to be able to pay themselves in retirement. In the US, social security is the defined benefit pension available to everyone provided by the federal government. However, it is prudent to expect defined benefit pensions to decrease in value as the retirement ages are increased, and benefit amounts and future value of money are decreased due to slowing economic growth in most developed countries.

JanisL 6y ago

Monetary policy is a huge factor in all this, asset holders are greatly advantaged over productive members of society at the moment. The combination of artificially low interest rates with significant inflation in particular make housing spectacularly unaffordable. This combination simultaneously pushes up the costs of housing due to asset bubbles forming while reducing the ability of people who earn money to save for a down payment on a house.

dorkwood 6y ago

I feel the same. I'm not earning quite as much you are, but still doing better than most of my peers. None of the millennial spending tropes apply to me, either, since I don't buy anything outside of the usual bag of groceries once a week. What's especially worrying is that if I'm "doing well", and I'm so screwed, what's going to happen to the rest of the population below me?

gpapilion 6y ago

I’ve thought about this a lot. My parents had 2 TVs in a house of five(and one was junk). We had stick on vinyl floors, and a cheap white appliances. Counter tops were linoleum, and we had 1.5 baths. I cut the lawn, and we went shopping in stores. We took two vacations requiring planes for the first 13 years of my life. Most vacations were camping. We rarely went out to eat. We didn’t have computers. We had 1 corded phone in the house. This is in stark contrast to my house. We have two iPhones and get new ones every 2-3 years. We have two iPads, 3 computers, and gadgets galore in a house of 4. My countertops are stone, my appliances are stainless. We go on vacations yearly that require planes and hotel, and used to eat out often. I have a house cleaner, and pay for an expensive gym. I realize I may not have the house my parents have, but I have nicer things. I make more money but I spend it very differently then they did. There was basically nothing we bought that compares to an iPhone every 2-3 years. I know so many people who travel regularly, and don’t seem to realize this was rare 15 years ago. I really feel we spend our money differently.

vertbhrtn 6y ago
Your countertops or your landlord's countertops? Because all the rest - all those iphones & vacations - is cheap fluff, really.
- abnry 6y ago
  That's the point. The cheap fluff today was expensive stuff yesteryear, if it existed at all.
  - tstrimple 6y ago
    Seems like the ol' "poor people aren't really poor because they almost all have refrigerators and not even kings had refrigerators two hundred years ago!" argument.
    - mensetmanusman 6y ago
      The counter to your strawman is that you are poor if you feel poor. Since we have proven that a majority of people feel poor (i.e. they need to earn 20% more), and that this is true even of millionaire’s, we need a different definition of poor, because something isn’t right here...

throwaway0a5e 6y ago

Your house has smoke detectors and a dishwasher. Your car has airbags. When you decide you want to build a garden shed behind that brick box you need to get permission from the town and pay for that permission. Your dad didn't have any of that stuff. You more or less need a smartphone to function in modern society. There's more wealth sloshing around and more (in terms of quantity, probably not proportion) of it comes your way but you're not getting any freedom to do the things you want to do from that wealth because society takes a huge chunk of it and earmarks it for things and you don't get to use it to take a vacation or whatever. Basically standards of living have inflated and there's no choice not to buy in. Also the interest rates vs asset prices thing other commenters have mentioned isn't helping.

pradn 6y ago
I see this argument, but it has limits. A seasonal farmworker today has access to Google and Wikipedia, but they are still working 12 hour days. They are less likely to get communicable diseases due to vaccination and disease eradication, but hospital stays are more prohibitively expensive than before. It's complex.
jbay808 6y ago
My dad did have a dishwasher and smoke detectors... Actually, I'm less likely to have a dishwasher than he was, because of space constraints.

TheOtherHobbes 6y ago

The post-WWII generation were able to buy a house plus car/holidays/etc on one person's median working class salary. It wasn't a particularly palatial house, but the mortgage would have been paid off before retirement. But this is a direct consequence of a rent-seeking economy which uses property rights as a proxy for political influence. The British economy started being converted from an industrial economy to a patrician rent-seeking speculative economy in the 80s, and the result was massive asset price inflation in property and shares. This wasn't an accident. It made a certain kind of person extremely rich, and most other people increasingly poor to varying degrees. Unless there's a change in strategy - unlikely - you can expect the wealth concentration to continue in the UK, with increasing danger to the personal circumstances of any kids you have - if not to yourself if there's a serious downturn. Even a 95%er is in danger of losing their property if they lose their job for an extended period if they don't live off speculative investments and rent.

kradroy 6y ago
>Unless there's a change in strategy - unlikely - you can expect the wealth concentration to continue in the UK, with increasing danger to the personal circumstances of any kids you have - if not to yourself if there's a serious downturn. It's the same in the US. >Even a 95%er is in danger of losing their property if they lose their job for an extended period if they don't live off speculative investments and rent. I fear this the most. My husband and I make more money than the rest of our family combined (both mothers, both fathers, 4 adult siblings, their spouses), but I still feel uneasy about the future. Maybe everyone worries more during uncertain times, but being mid-career with savings/investments I never thought I'd be concerned about losing everything.

ArkVark 6y ago

You are paying for your Dad's pension, and for the Government services consumed by millions of migrants. Those same migrants increase labor supply (thus lowering the equilibrium price) and increase demand for land and real estate. The end result is high taxes and high real estate cost. Of immense benefit to your dad (and other Baby Boomers) who receive risk-free pensions, and supercharged capital gains for their own assets.

petr_tik 6y ago
I don’t understand why you are downvoted. Millions might, not necessarily though, be an overestimate, but I agree with the analysis in principle. Disclaimer: I’m an immigrant.

dang 6y ago

(We detached this subthread from https://news.ycombinator.com/item?id=24491909 https://news.ycombinator.com/item?id=24491909.)

user5994461 6y ago

For reference, 95% percentile would be somewhere around £100k a year in London. (If you look at working men aged 25-55 the number should be a fair bit higher) I don't know what you earn but if you are early 20s it might be less than that. There is a lot of money floating in London, the price of homes almost make sense when you realize what the top earners actually earn, the few percents competing for the same homes.

jiveturkey 6y ago

You're comparing yourself to the wrong baseline. The opportunities now are different than they were 30 years ago. You also might be comparing yourself to a specific data point (your dad), vs statistically. > I'm a 90th percentile earner. Will 95+ percentile earner in a few years time. Yet it feels like I am not as well off as I should be. You should correct your attitude then, don't you think? You are a 90%ile earner. I don't know what "should" implies, but put it in terms of where you "are". You'll be happier.

medium_burrito 6y ago

The other critical factor is instability in the sense that we can lose our jobs at any time. It makes it very difficult to plan long term if you expect your industry to get offshored, or automated, or generally collapse somehow. Even if these calamities don't happen to you, you'll still switch jobs way more than the previous generation.

MuffinFlavored 6y ago

> I'm a 90th percentile earner. Will 95+ percentile earner in a few years time. How much is that in the UK?

e-dard 6y ago
90th percentile is about £47K, 95th percentile is about £60K. Assuming gross income.
- MuffinFlavored 6y ago
  As of 2019 --- US 90th percentile: $184k (£144.3k) US 95th percentile: $248k (£194.6k) kind of a silly thing to say you are a 95th percentile British earner when that puts you in the 25-50th percentile in America.
Stevvo 6y ago
https://www.gov.uk/government/statistics/percentile-points-from-1-to-99-for-total-income-before-and-after-tax https://www.gov.uk/government/statistics/percentile-points-f...

petr_tik 6y ago

If you are London based, you should also factor in that London real estate’s qualitative transformation in the last 40 years. It used to be real estate, you know, local people buying homes to live in. Now it’s one of the best performing asset classes in the world. You aren’t competing for property with your mates with a big inheritance. You are competing with dodgy oil money that needs to be laundered and more honest international investors told to diversify. The rule of law is a precious and rare component of legal infrastructure, so a lot of money is diversified into jurisdictions with strong guarantees. I’m generally a pro-market person. In the case of UK real estate, I support a ban on non-residents buying property similar to what Canada have.

Pokepokalypse 6y ago

As an engineer in his 50's (USA) - I am also a 90th percentile earner, but I absolutely agree, I'm nowhere near as well off as my parents were at my age. I never had the money to take my kids on nice vacations every year like my parents did. Also never had the money to justify buying a new car. And while I do have a home, I have no hope of paying it off before retirement. (which, as an engineer, in the USA, could be 1-5 years from now, involuntarily - my father worked for the same company his whole life, while I've had to change jobs 6 times, due to either corporate buyouts or layoffs. NEVER had a bad performance review). All of my kids, my brother and sister's kids (all in their 20's now), are all very much struggling, barely making it (and in a couple of cases, NOT making it). Only ONE of them (my son) got through college and found a reasonably decent job, and even HE is so bogged down with student loans, he may never own a home. So as a picture of 3 generations, there's a very clear trend.