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The Cheapest Generation

theatlantic.com

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Re: The Cheapest Generation

#191

Post by runako »

api wrote: post #189
runako wrote: post #166

Earlier quoted context omitted.

Or d) they are willing to move out of the top 5-10 mostly coastal real estate markets. For instance, tech hub Austin, TX has a median home price of $122k. The payment on that will be around $1k-$1100/mo including taxes etc. You'll find very similar numbers in places like Atlanta, Houston, Dallas, Raleigh, etc.

That's a valid point, but I didn't know there were any tech hubs or otherwise interesting places with jobs that had house prices like that. That is lower than small Midwestern cities with lousier economies. Why is housing so affordable in Texas? Lack of stupid regulations? Loads of land?

Both, plus c) it's not perceived as being as cool as living in a trendier place and d) it's under-marketed relative to the bigger cities. Note also that Raleigh/Durham has a smallish tech hub and housing is cheap there too. Oh, and also e) the perception that nothing is interesting unless it happens in NYC or SF (or other mega-city).

If you're willing to live outside a tech hub (which has other advantages), you'll find that in most places in the US programmers make high salaries relative to the cost of living, but the focus tends to be on the few places that this is not true. Outside the top markets, $70k + bonus is more than enough to be comfortably middle class (and own a home and car if desired).

Re: The Cheapest Generation

#192

Post by yummyfajitas »

api wrote: post #185
yummyfajitas wrote: post #106

Earlier quoted context omitted.

...lowering our expectations to below those of our parents. Go read the article I linked to. We are richer than our parents. We own more and bigger houses and cars than they owned. To fix your analogy: "Next quarter's numbers will be higher, and shareholders are just going to accept 10% growth rather than 20%. Expecting 20% growth forever is unrealistic." If you want to argue that growth should have been higher than…

I agree that growth forever is unrealistic. I'm referring to the fact that growth has stalled for everyone below a certain bracket, but is continuing apace for everyone above. This has been true for a very long time, but people were filling it in with debt. Then everything got over-extended and collapsed.

I'm referring to the fact that growth has stalled for everyone below a certain bracket,

Please go read the source I linked to, which shows that growth has not stalled for the bottom 20%, nor the middle 20%.

Re: The Cheapest Generation

#193

Post by api »

tatsuke95 wrote: post #180
JonnieCache wrote: post #164

Earlier quoted context omitted.

>We'll have the last laugh, though. Eventually the boomers will need to divest. At that point they'll find out we don't have the money to buy their assets. Hadn't thought of that. Might be quite funny... I suppose they'll just give it to their offspring. So for now... kill rich kids? Just brainstorming here.

It's interesting. I believe it's going to be a crisis, at least here in Canada, where our boomer bulge is the largest in the world. Much like our southern neighbours, our soon-to-be-retirees don't have much in savings, and the vast majority of their net-worth is tied up in their homes. Unlike the US, we haven't had a housing price adjustment yet. So these boomers are counting on having the current value of their home…

At least you've got Saudi Canada out in Alberta that can help pay for some of it.

Re: The Cheapest Generation

#194

Post by halostatue »

bsphil wrote: post #168
JumpCrisscross wrote: post #78

Earlier quoted context omitted.

I'm 21, live in New York City, and let my driver's licence lapse over a year ago. I don't plan on owning a house, preferring to drive my surplus wealth into assets I understand better and which don't restrict my mobility, and don't care to own a car. This is not economically motivated - I have comfortable free cash flow and a healthy balance sheet free of personal debt. I pay for a car service and take taxis more tha…

>live in New York City MYSTERY SOLVED. Of course you don't want to own a car in NYC.

My brother lives in NYC and owns a car. He wants to own a car. (He doesn't live on Manhattan, but…)

I live in Toronto and don't want to own a car. We will need to get a replacement for our current car because there are enough things that we need to do that car services would not benefit us (we also live just outside of the core service area for every single one of the three—or is it four?—car services in Toronto).

Re: The Cheapest Generation

#195

Post by JonnieCache »

api wrote: post #186
tatsuke95 wrote: post #120

Earlier quoted context omitted.

> "We didn't make our goals this quarter, and many in our industry also showed reduced sales numbers. It is clear that we need to reduce our expectations. Next quarter's numbers will be lower, and shareholders are just going to have to take a loss." Uh, they do say that all the time . I tend to agree with the other poster: our expectations are too high. It's a product of having witnessed one of the greatest runups in…

I know a lot of professional people in my generation, and I know of only a few that have anything like what you describe. One managed to land a six-figure job in Kentucky , one of the lowest cost of living places that was largely passed over by the housing bubble. The major reason he's well-off is that his house was affordable and he went to a lower priced university and didn't need much in the way of student loans.…

>the cost of college

In the UK, our parents' generation paid zero. They got given grants...

That includes the elite, politician-farming universities.

The current government just tripled the fees, after one coalition partner promised to abolish them in the campaign. That's why students ended up trashing (actually the other partner's) HQ in 2010.

Re: The Cheapest Generation

#196

Post by marklabedz »

mfringel wrote: post #73
MengYuanLong wrote: post #57

Earlier quoted context omitted.

You may feel fixies are impractical but they carry benefits. The primary one being better power transfer. Second, you can often make a cheap fixie by finding an old frame, refurbishing it, and replacing the rear hub. Yes, you can buy them for $700+ but unlike iPhones, there are a number of ways to obtain one for cheap. Further, a bike that costs less than $200 is certainly not a bike I would buy for commuting. Having…

So, for those of us who know nothing about bikes, why are steel frames suboptimal for commuting?

Really low end steel is usually heavy. On the high end though (Pegoretti, etc), they're plenty light and ride like a dream. The "common $700 fixie" - the Bianchi Pista - is steel. They all rust when abused though.

Re: The Cheapest Generation

#197

Post by api »

JonnieCache wrote: post #195
api wrote: post #186

Earlier quoted context omitted.

I know a lot of professional people in my generation, and I know of only a few that have anything like what you describe. One managed to land a six-figure job in Kentucky , one of the lowest cost of living places that was largely passed over by the housing bubble. The major reason he's well-off is that his house was affordable and he went to a lower priced university and didn't need much in the way of student loans.…

>the cost of college In the UK, our parents' generation paid zero. They got given grants... That includes the elite, politician-farming universities. The current government just tripled the fees, after one coalition partner promised to abolish them in the campaign. That's why students ended up trashing (actually the other partner's) HQ in 2010.

Yet college is more of a requirement now than it was then.

Re: The Cheapest Generation

#198

Post by specialist »

liber8 wrote: post #184
specialist wrote: post #102

Earlier quoted context omitted.

Really? AEI? Minimum wage hasn't kept up with inflation. Debt financed consumption. You're trying too hard. This stuff isn't that complicated.

"Minimum wage hasn't kept up with inflation. Debt financed consumption." You're right that minimum wage hasn't kept up with inflation. You're also right that debt financed (a lot of) consumption. But it doesn't follow that those earning minimum wage drove consumption by acquiring debt. As yummyfajitas links above show, those earning minimum wage are a tiny percentage of overall wage earners. In other words, minimum w…

OP is about why Millennials aren't buying cars and houses.

Whereas OP includes values (eg smartphones vs cars), thaumaturgy also says they don't have the cash.

No reasonable person can deny wage stagnation, rising unemployment, increasing costs (education, food, housing, and transportation).

yummyfajitas gets argumentative, citing some libertarian fallacies.

specialist refutes yummy.

liber8 gets pedantic, forgetting original point.

Re: The Cheapest Generation

#199

Post by TheFuture »

api wrote: post #72

Myself and many other "millennials" are very reluctant to "buy" such things because they can't. What we can do is go into massive, enslaving, soul-crushing debt for them, something the smart ones are justifiably reluctant to do. Real estate hyperinflation is particularly bad. A house is unthinkable to anyone under 40 unless: a) they've had a liquidity event, inherited money, or have a big trust fund. b) they are will…

Every market is different, but there is a lot of housing supply in most of the US, prices are depressed and lending rates are the lowest they'll probably ever be in our lifetime.

I have a couple friends (from our generation) who are buying up duplexes. They can live upstairs and rent the lower and nearly cover their mortgage from the rent income. They are living for free and banking the savings for the down-payment on the next duplex.

Seems incredibly smart to me. You have a generation of people who've convinced themselves not to buy a house, driving up rents and driving down home prices. You can borrow money for next to free to buy those assets and rent them.

Even if you don't want to be a landlord, you can get a mortgage payment that is less than rent. Sure you have debt, but rent is just burning money every month. Even if your home declines in value, it probably won't lose as much value as you'd have paid in rent, so you're basically breaking even.

Re: The Cheapest Generation

#200

Post by yummyfajitas »

trevelyan wrote: post #182
yummyfajitas wrote: post #145

Earlier quoted context omitted.

If car ownership increased, but sales of new cars fell, it implies people are keeping the same car for more time. The employment to population ratio is the same as it was during the 80's, and was considerably higher until the recent recession. In contrast, the fraction of people earning min wage has fallen. http://research.stlouisfed.org/fred2/series/EMRATIO Further, adjusting wages (rather than total comp) for infla…

Quibbling about the exact source of inflation is irrelevant unless you want to claim that people are not buying cars or houses because they are buying health care instead. And that is clearly not the case. According to government statistics [1], nearly one-third of those lacking health care coverage in the United States are young adults. The unemployment rate among this cohort is over 15 percent, and much higher if o…

People are buying cars and houses, as you'd know if you read my link. We currently have more cars/houses than ever before.

If inflation-adjusted compensation were down, this fact would pose a paradox and suggest we are incorrectly measuring inflation - however, the paradox is easily resolved by looking at total comp.

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