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Good take. > I spend my "political advocacy" bucks on trying to convince older generations around me just how much they and their peers pulled the ladder up be

Good take. > I spend my "political advocacy" bucks on trying to convince older generations around me just how much they and their peers pulled the ladder up behind them. Yes. And this takes many forms, whether that's hanging on to property long past you need it, staying in jobs past retirement, or falsely believing the current economic climate is at all like what it was 30 years ago. > I find conversations about money with younger generations to be very hostile I can understand how if you grew up around the tech boom years of the 2010s you can believe that a bit of smart gambling is all it takes to generate wealth. In some sense this article is entirely relatable: I once believed if I worked for the right company I could make enough money on my own to buy myself out of the system entirely. This is a conscientious person's version of the gambling fallacy that the article discusses. Really, any sufficiently simple path to wealth that doesn't involve the capital class gets patched out by the system relatively quickly (see Wall St's furor over FAANG engineer salaries).

a2tech 3y ago
Hanging onto property long after you need it? Thats crazy. I'm of the belief you should never sell property unless you're in dire straights or you know it's never going to a viable asset (including in this if you have a property in an overheated area that you know is overvalued...then yes, by all means, sell!) You can always find something to do with property to generate income. Once that property is gone, you'll probably never be able to buy it back for what you sold it for
- celestialcheese 3y ago
  I've got this situation now, and interested to hear your take. Primary home with ~400k in equity, 400k loan @ 2.7%. Moving and bought a new house, and deciding what to do. Market is hot, equity up 300k in 3 years. I always believed in this "don't sell property, you can always generate income" but now that i'm facing this decision, I don't see how to justify keeping it. Cashflow (factoring in expenses/maintenance/vacancy) from renting would be ~$400/mo. If you include principal paydown, then it'd be ~$2000/mo. Selling the property, and taking the equity seems like the best option. Either a) rolling it into the new house or b) investing it in nearly risk free muni's. Both of those would net me more than keeping the property with a significantly better risk adjusted return. If you live in a place with wild property appreciation over the last 4 years (most of the country), then I don't really see how it makes sense to keep a property. What am I missing?
  - a2tech 3y ago
    Do you feel like the market is going to cool massively in the next few years? If you don't see your equity evaporating in the near term, why would you sell now? Let renters pay off the loan for you, drop the $400/month into a money market. If you need cash in the future, you've got 400k basically sitting there ready to go, and if you don't the cash, you've got a savings account someone else is basically putting money into for you.
    - deleted 3y ago
      [deleted]
    - celestialcheese 3y ago
      > Do you feel like the market is going to cool massively in the next few years? I don't - IMO the weight of held low interest rates is going to keep inventory low for a long time. We've got to live somewhere, and the new house has a mortgage at 7.65%. The principle decrease + cashflow from holding the existing property barely offsets the interest cost on new property. So I guess the way to look at it is a zero-cost, but potentially highly stressful, bet on the property market appreciating?
  - rozap 3y ago
    I was in this same situation a few years ago. Ultimately what it came down to was my own sanity of managing a rental, and I didn't want to be a leech on society. It is important for people to be able to buy houses. I sold it. Money from the house went into some vanguard funds, a young family got their first house, and I have a lot less stress in my life.
    - sleazebreeze 3y ago
      Made this same decision recently. Leading up to selling the my previous house I had literally every person I talk to tell me I should keep it as an investment. It's in a HCOL city, but it's a townhouse in a slightly rough neighborhood. Great starter home for my family, but not a rental I wanted to manage. Being a landlord in this city is also fighting upstream against the politics. The money dropped into my account a few weeks ago from the sale. The profit on the sale was not mind blowing, I bought and sold it for a fair price (2018 -> 2024). Zero regrets. I believe in making my own decisions that work for me and my family, not just blindly following the crowd. It's working well so far.
- ADeerAppeared 3y ago
  > Hanging onto property long after you need it? Thats crazy. You're missing the point. Yes. It's financially suboptimal to do this. But it's destroying society. And while this requires policy change to fix, policy change is still "SUBOPTIMAL".
  - dh2022 3y ago
    How is this destroying society?
    - carlosjobim 3y ago
      Because young people cannot afford a home to raise their families in. Because enormous amounts of wealth from the productive sectors of the economy are being siphoned to the class of the landed gentry in exchange for no benefits to society at large. People love hating modern tech billionaires or old time industrialists, but this class at least create something and hire people.
- polygamous_bat 3y ago
  Thanks for making exactly the point OP was trying to convey. > You can always find something to do with property to generate income. Where do you think that income is coming from? Especially when we are talking about a limited resource like housing, the dollar of your “extra income” is a dollar that a young family could have saved for their future.
  - boringg 3y ago
    Now here's the next step in your small thought experiment. Expand income coming from for everything. Whatever you do now at the company (assuming you are working) where does that money come from? Work through the logic on income. People love to demonize small property owners who have a rental property and take a moralistic campaign but don't look at how their own lives are funded.
    - mycologos 3y ago
      And here's yet another step: most other markets aren't as resource-constrained as housing is. If the Yankees win the world series and more people want Yankees caps, manufacturers can just make more. Demand goes up, supply goes up, everybody's happy. Housing, at least in the USA, often doesn't work like this. The population grows and more people want to live in place X and the current NIMBY occupants of place X go to the government to make sure more housing can't appear in place X. The current occupants make some arguments about neighborhood character that are really about preserving their own lives and investments and another family goes to a worse district or a worse house or no house at all. Housing is a unique investment category, pretending it's like everything else is disingenuous.
      - boringg 3y ago
        I agree that housing is a complicated market with a lot of varying factors. It never really fits a simple model that people like to package it in. Each market is regional with some national/international overlays and its tied to the economic power of that market. It is impacted by policies both economic, financial and political.
andsoitis 3y ago
> Yes. And this takes many forms, whether that's hanging on to property long past you need it, staying in jobs past retirement, You don't get to be upset that someone keeps their property for longer than you deem they need it, or telling people they should stop working to do nothing for their last 20 - 30 years of their life.
- mattgreenrocks 3y ago
  I'm not upset. It just causes problems in congested areas that don't build enough housing. Obviously, they should build more houses. :)
  - dh2022 3y ago
    And how would forcing people to sell their house when they move out increases the number of houses??? Is still 1 house whether is being rented or owner occupied.
- BowBun 3y ago
  Speaking of hostile... Ironic to be telling people what they can do when you're unhappy about them doing the same! As for me, I'm absolutely upset. Older homeowners sit on housing with multiple unused bedrooms in major cities (and everywhere else) while wages and construction have stagnated. It's another form of wealth concentration. Two 80-year-olds don't need a 6 bedroom mansion. Meanwhile there's families with kids (who by the way, societies depend on) out there with income to buy a home that are priced out of everything. Meanwhile the generationally wealthy family can continue to leverage their equity to buy up more property, further exarcebating the issue. Let's not act like there's a moral ground here, it's all in self-interest and greed. And frankly many of us on HN are part of the problem (I know I am).
  - dh2022 3y ago
    At least in the state where I live (WA) which is a non-recourse state is very hard (I would say impossible but that is a high bar) for an individual or a family to use existing real estate equity to buy more real estate. Me and my wife own 4 properties. Each time we bought a property it was through a different lender (the cheapest one with the lowest interest rate). When it came time to existing rentals the paperwork wanted to know the lease agreement for the current tenants, monthly expenses and monthly rental income. There was no question about mortgage principal, nor about market value of real estate. When we bought (yet) another property, the lender could not (and did not) use the existing real estate assets to secure the new loan. Each loan was secured by its property and nothing else.
llm_trw 3y ago
The salaries are high because the number of people who can do the work is so small. And no I don't mean the JShit we have today. That you need an army of people to keep a gui running is the victory of Wall St over the hackers.
- peteradio 3y ago
  > That you need an army of people to keep a gui running is the victory of Wall St over the hackers. I'd rather have 90% of a 1 piece pie than 50% of a full pie. 90 > 50
fuzzfactor 3y ago
>staying in jobs past retirement Keep in mind that the main reason for today's seniors to continue working after age 65 is because the ladder was already being pulled up when their fathers and grandfathers were in their teens & 20's, by the same forces that are still acting today. If you do the math you would have to figure that the majority of people working to reduce opportunities for today's young people, are not senior citizens but mainly just a different class of younger people closer in age to their 20's than their 60's. >Really, any sufficiently simple path to wealth that doesn't involve the capital class gets patched out by the system relatively quickly So true, but sometimes quicker than others. It's more like a zero-sum outcome for seekers of a simple path to riches before a certain age, of which there is never going to be enough opportunity to satisfy. You can't buy yourself out of a financial system by working for money. You don't stand a chance unless you work for something else more worthwhile. And why would you want to retire from that?

a2tech 3y ago

Hanging onto property long after you need it? Thats crazy. I'm of the belief you should never sell property unless you're in dire straights or you know it's never going to a viable asset (including in this if you have a property in an overheated area that you know is overvalued...then yes, by all means, sell!) You can always find something to do with property to generate income. Once that property is gone, you'll probably never be able to buy it back for what you sold it for

celestialcheese 3y ago
I've got this situation now, and interested to hear your take. Primary home with ~400k in equity, 400k loan @ 2.7%. Moving and bought a new house, and deciding what to do. Market is hot, equity up 300k in 3 years. I always believed in this "don't sell property, you can always generate income" but now that i'm facing this decision, I don't see how to justify keeping it. Cashflow (factoring in expenses/maintenance/vacancy) from renting would be ~$400/mo. If you include principal paydown, then it'd be ~$2000/mo. Selling the property, and taking the equity seems like the best option. Either a) rolling it into the new house or b) investing it in nearly risk free muni's. Both of those would net me more than keeping the property with a significantly better risk adjusted return. If you live in a place with wild property appreciation over the last 4 years (most of the country), then I don't really see how it makes sense to keep a property. What am I missing?
- a2tech 3y ago
  Do you feel like the market is going to cool massively in the next few years? If you don't see your equity evaporating in the near term, why would you sell now? Let renters pay off the loan for you, drop the $400/month into a money market. If you need cash in the future, you've got 400k basically sitting there ready to go, and if you don't the cash, you've got a savings account someone else is basically putting money into for you.
  - deleted 3y ago
    [deleted]
  - celestialcheese 3y ago
    > Do you feel like the market is going to cool massively in the next few years? I don't - IMO the weight of held low interest rates is going to keep inventory low for a long time. We've got to live somewhere, and the new house has a mortgage at 7.65%. The principle decrease + cashflow from holding the existing property barely offsets the interest cost on new property. So I guess the way to look at it is a zero-cost, but potentially highly stressful, bet on the property market appreciating?
- rozap 3y ago
  I was in this same situation a few years ago. Ultimately what it came down to was my own sanity of managing a rental, and I didn't want to be a leech on society. It is important for people to be able to buy houses. I sold it. Money from the house went into some vanguard funds, a young family got their first house, and I have a lot less stress in my life.
  - sleazebreeze 3y ago
    Made this same decision recently. Leading up to selling the my previous house I had literally every person I talk to tell me I should keep it as an investment. It's in a HCOL city, but it's a townhouse in a slightly rough neighborhood. Great starter home for my family, but not a rental I wanted to manage. Being a landlord in this city is also fighting upstream against the politics. The money dropped into my account a few weeks ago from the sale. The profit on the sale was not mind blowing, I bought and sold it for a fair price (2018 -> 2024). Zero regrets. I believe in making my own decisions that work for me and my family, not just blindly following the crowd. It's working well so far.
ADeerAppeared 3y ago
> Hanging onto property long after you need it? Thats crazy. You're missing the point. Yes. It's financially suboptimal to do this. But it's destroying society. And while this requires policy change to fix, policy change is still "SUBOPTIMAL".
- dh2022 3y ago
  How is this destroying society?
  - carlosjobim 3y ago
    Because young people cannot afford a home to raise their families in. Because enormous amounts of wealth from the productive sectors of the economy are being siphoned to the class of the landed gentry in exchange for no benefits to society at large. People love hating modern tech billionaires or old time industrialists, but this class at least create something and hire people.
polygamous_bat 3y ago
Thanks for making exactly the point OP was trying to convey. > You can always find something to do with property to generate income. Where do you think that income is coming from? Especially when we are talking about a limited resource like housing, the dollar of your “extra income” is a dollar that a young family could have saved for their future.
- boringg 3y ago
  Now here's the next step in your small thought experiment. Expand income coming from for everything. Whatever you do now at the company (assuming you are working) where does that money come from? Work through the logic on income. People love to demonize small property owners who have a rental property and take a moralistic campaign but don't look at how their own lives are funded.
  - mycologos 3y ago
    And here's yet another step: most other markets aren't as resource-constrained as housing is. If the Yankees win the world series and more people want Yankees caps, manufacturers can just make more. Demand goes up, supply goes up, everybody's happy. Housing, at least in the USA, often doesn't work like this. The population grows and more people want to live in place X and the current NIMBY occupants of place X go to the government to make sure more housing can't appear in place X. The current occupants make some arguments about neighborhood character that are really about preserving their own lives and investments and another family goes to a worse district or a worse house or no house at all. Housing is a unique investment category, pretending it's like everything else is disingenuous.
    - boringg 3y ago
      I agree that housing is a complicated market with a lot of varying factors. It never really fits a simple model that people like to package it in. Each market is regional with some national/international overlays and its tied to the economic power of that market. It is impacted by policies both economic, financial and political.

andsoitis 3y ago

> Yes. And this takes many forms, whether that's hanging on to property long past you need it, staying in jobs past retirement, You don't get to be upset that someone keeps their property for longer than you deem they need it, or telling people they should stop working to do nothing for their last 20 - 30 years of their life.

mattgreenrocks 3y ago
I'm not upset. It just causes problems in congested areas that don't build enough housing. Obviously, they should build more houses. :)
- dh2022 3y ago
  And how would forcing people to sell their house when they move out increases the number of houses??? Is still 1 house whether is being rented or owner occupied.
BowBun 3y ago
Speaking of hostile... Ironic to be telling people what they can do when you're unhappy about them doing the same! As for me, I'm absolutely upset. Older homeowners sit on housing with multiple unused bedrooms in major cities (and everywhere else) while wages and construction have stagnated. It's another form of wealth concentration. Two 80-year-olds don't need a 6 bedroom mansion. Meanwhile there's families with kids (who by the way, societies depend on) out there with income to buy a home that are priced out of everything. Meanwhile the generationally wealthy family can continue to leverage their equity to buy up more property, further exarcebating the issue. Let's not act like there's a moral ground here, it's all in self-interest and greed. And frankly many of us on HN are part of the problem (I know I am).
- dh2022 3y ago
  At least in the state where I live (WA) which is a non-recourse state is very hard (I would say impossible but that is a high bar) for an individual or a family to use existing real estate equity to buy more real estate. Me and my wife own 4 properties. Each time we bought a property it was through a different lender (the cheapest one with the lowest interest rate). When it came time to existing rentals the paperwork wanted to know the lease agreement for the current tenants, monthly expenses and monthly rental income. There was no question about mortgage principal, nor about market value of real estate. When we bought (yet) another property, the lender could not (and did not) use the existing real estate assets to secure the new loan. Each loan was secured by its property and nothing else.

llm_trw 3y ago

The salaries are high because the number of people who can do the work is so small. And no I don't mean the JShit we have today. That you need an army of people to keep a gui running is the victory of Wall St over the hackers.

peteradio 3y ago
> That you need an army of people to keep a gui running is the victory of Wall St over the hackers. I'd rather have 90% of a 1 piece pie than 50% of a full pie. 90 > 50

fuzzfactor 3y ago

>staying in jobs past retirement Keep in mind that the main reason for today's seniors to continue working after age 65 is because the ladder was already being pulled up when their fathers and grandfathers were in their teens & 20's, by the same forces that are still acting today. If you do the math you would have to figure that the majority of people working to reduce opportunities for today's young people, are not senior citizens but mainly just a different class of younger people closer in age to their 20's than their 60's. >Really, any sufficiently simple path to wealth that doesn't involve the capital class gets patched out by the system relatively quickly So true, but sometimes quicker than others. It's more like a zero-sum outcome for seekers of a simple path to riches before a certain age, of which there is never going to be enough opportunity to satisfy. You can't buy yourself out of a financial system by working for money. You don't stand a chance unless you work for something else more worthwhile. And why would you want to retire from that?