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The great wealth transfer reality check

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Re: The great wealth transfer reality check

#21

Post by _doctor_love »

atleastoptimal wrote: post #3

80% of the GDP over the next two decades will be siphoning money out of baby boomers (medical care, retirement homes, luxury cruises) before their children see a cent of it. Coupled with AI taking everyone's job, the end result is neo-feudalism where familial dynasties call all the shots.

> the end result is neo-feudalism where familial dynasties call all the shots

I'm going to stick my neck out and say that this is mostly where we are already.

Agree that before the boomers can pass money to their children, our corporate overlords will find a way to hoover that money into their vaults.

Don't think AI will take everyone's job and is actually orthogonal to this entire issue.

Re: The great wealth transfer reality check

#24

Post by citizenpaul »

What is shocking to me is how can so many boomers still have a mortgage? They could buy a house when you could easily get one for >plant to do a Skip gen trip?

I have no earthy idea what this could mean but they just casually drop it in there. Thats how you can tell what social class you were born into.

I had a school friend whom's grandparents were one of these in the list it seems. The bought him a 3bed/bath house in the suburbs. He proceeded to do coke for the next 10 years and be a burnout,.but all good because he still has a nice house to live in while being a detriment to society. Yeah I'm bitter so what?

Re: The great wealth transfer reality check

#25

Post by cortesoft »

cyanregiment wrote: post #17
atleastoptimal wrote: post #3

80% of the GDP over the next two decades will be siphoning money out of baby boomers (medical care, retirement homes, luxury cruises) before their children see a cent of it. Coupled with AI taking everyone's job, the end result is neo-feudalism where familial dynasties call all the shots.

I had the same fears but even the boomers sitting on million dollar homes are being called “cash poor”. You still need an income. You can only refinance so much, and then you’re paying off interest. If your home 10x’s in value so does your property tax. Some people are paying $1500/mo. in property tax. They need a job just to cover it. You can’t sell the house and cash out because you need that cash to buy the next h…

> If your home 10x’s in value so does your property tax.

That depends on where you live. For example, in California we have Prop 13, which limits how much the assessed value for a home can increase without being sold.

This means that even if your house goes up 10x in value, California will only increase the assessed value for tax purposes by 2% each year.

Re: The great wealth transfer reality check

#26

Post by add-sub-mul-div »

paulpauper wrote: post #20

Gen X and millennials are ahead of boomers on per capita wealth at the same age This runs counter to the popular media narrative of poor millennials, but it makes sense. Millennials rose a tailwind of surging stock prices since the '09 bottom, fat white-collar salaries (such as in tech, consulting, finance), and surging home pries, buoyed by cheap mortgages from 2010-2022 thanks to 14 years of near-zero interest rate…

Everything that can be done is being done to ensure that white-collar labor transitions from skilled workers to low-cost fungible operators of AI. Even if no further jobs are lost it will be a massive hit to the average salary.

Re: The great wealth transfer reality check

#27

Post by alephnerd »

citizenpaul wrote: post #24

What is shocking to me is how can so many boomers still have a mortgage? They could buy a house when you could easily get one for >plant to do a Skip gen trip? I have no earthy idea what this could mean but they just casually drop it in there. Thats how you can tell what social class you were born into. I had a school friend whom's grandparents were one of these in the list it seems. The bought him a 3bed/bath house…

My parents are not boomers (they're Gen X), but kept their marginal mortgage because the capital they would have used to fully pay off the mortgage could be better deployed in a mixture of investments.

A lot of households have done something similar.

Additionally, not all households bought their first house in their 20s - plenty of households did so in their 30s and 40s.

> They could buy a house when you could easily get one for And during that era, you had double digit interest rates [0]

[0] - https://www.statista.com/statistics/1338105/volcker-shock-in...

Re: The great wealth transfer reality check

#28

Post by inigyou »

atleastoptimal wrote: post #3

80% of the GDP over the next two decades will be siphoning money out of baby boomers (medical care, retirement homes, luxury cruises) before their children see a cent of it. Coupled with AI taking everyone's job, the end result is neo-feudalism where familial dynasties call all the shots.

Isn't that already happening and has happened? This news is a decade late. Last decade we could've said "in the next few years"

Re: The great wealth transfer reality check

#29

Post by SoftTalker »

skybrian wrote: post #13
mikestew wrote: post #2

Despite TFA coming from Visa, of all places, I found it to be a read worthy of my time. Basically, inheritances might not be as large as one might suspect, and the all that "inheritance spending lift" might already be happening (my parents are blowing my inheritance). I might take issue with the conclusion at the very bottom that GenX and Millenials are ahead of Boomers on a capital per-capita basis. That might be tr…

In many places you couldn't even buy "starter houses" like they had anymore. They wouldn't meet modern building codes. When people do manage to buy a house, it will likely be a nicer one.

It may look nicer, and have more features, but it's probably not built any better. Older homes were built with copper plumbing, plaster walls, solid hardwood floors, wood trim, and plywood subfloors, roof deck, and sheathing.

New homes use PVC or PEX pipes, drywall, OSB (basically glued-up wood chips) instead of plywood, laminate floors, and plastic or styrene trim.

The only things really better today are insulation and wiring.

Re: The great wealth transfer reality check

#30

Post by smhenderson »

cortesoft wrote: post #25
cyanregiment wrote: post #17

Earlier quoted context omitted.

I had the same fears but even the boomers sitting on million dollar homes are being called “cash poor”. You still need an income. You can only refinance so much, and then you’re paying off interest. If your home 10x’s in value so does your property tax. Some people are paying $1500/mo. in property tax. They need a job just to cover it. You can’t sell the house and cash out because you need that cash to buy the next h…

> If your home 10x’s in value so does your property tax. That depends on where you live. For example, in California we have Prop 13, which limits how much the assessed value for a home can increase without being sold. This means that even if your house goes up 10x in value, California will only increase the assessed value for tax purposes by 2% each year.

It's similar where I am - a bank and a realtor might say a home is worth .5M but the tax man still assesses it at around 115K.

I bought my home over 20 years ago and it is worth much more than I paid on the market. Yet the value of the property for tax purposes is only 3K more than what I paid for it in 2002.

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