Everyone has to be rich now??

[RandomKaren]

I grew up in USA, lived in Switzerland for 9 years, then Germany for 3 years, then returned to Switzerland in 2017. My quality of life soared when I moved to Europe. Switzerland and Germany are not perfect, but compared to USA they are paradise. Everyone has access to healthcare, good grocery stores and public transportation. I do not own a car; when I need one, I rent. Europe also takes existential threats, be they environmental, social or military, more seriously. It is a tough world out there.

The downside is that the cost of living, particularly property, is expensive and getting more so all the time as more and more people from all around the world move into western EU and the UK. And ultimately our healthcare, education and infrastructure systems are operating way beyond capacity with funding levels a generation behind and with too many people drawing out who haven't paid in.

 

[djmay]

The downside is that the cost of living, particularly property, is expensive and getting more so all the time as more and more people from all around the world move into western EU and the UK. And ultimately our healthcare, education and infrastructure systems are operating way beyond capacity with funding levels a generation behind and with too many people drawing out who haven't paid in.

To whom are you referring by "our healthcare, education...?"

 

[buldog5151bass]

From what I've read, only a small fraction of people murdered during the Terror were aristocrats.

Only a small fraction of people were "aristocrats".

 

[Gilmourisgod]

Seems I've been behind the curve on just how insane house prices are becoming on Cape Cod. Just saw a house essentially identical to mine (3 bed/2bath/1 car garage) for sale for $900K+. I can only surmise that it's targeted towards rich buyers off Cape looking for a second or third vacarion home. No young familes buying these houses. The other alarming trend is banks buying up houses and then renting them out at crazy prices. I suspect my sons may be renters for life, unless they can find a job in some remote area where housing isn't as horrific.

 

[backin82]

I think there is a balance because that can both build resilience and induce trauma. The Great Depression pushed my grandparents on one side to be overly austere but I personally know some examples where it did the opposite and led to hoarding. Mixed bag.

It probably depends on the degree of poverty and the challenges faced. Like in our case, we always existed below the poverty line, but we never went without food, shelter, clothing, and only rarely struggled with transportation (only because my dad was a mechanic). And frankly, the only way that was true is because my dad worked extra contractor jobs on the weekends to subsidize his military pay.

I got made fun of and marginalized because I only had one pair of jeans or shoes, didn't have a backpack for a while, couldn't afford braces, we drove beater cars, etc... But those are still first world problems.

To bring this full circle, it's very likely that my early life experiences living in relative poverty allow me to reject some of the more alluring aspects of capitalism (marketing, propaganda). A good example I can remember vividly is all the toy commercials that came on while watching Ninja Turtles. I wanted all those toys so bad, but knew I could never let myself even consider getting them, because we couldn't afford them. It wasn't even an option. I had to learn how to navigate that feeling of seeing something so tempting and yet completely out of reach at a very early age. I think it made marketing really transparent for us, and made all the kids in my family very aware of reality most of the time.

On the flip side, I have definitely had to navigate a "poverty mindset", which has led me to hoard things at times or be very fearful of throwing things away. Our garage and other rooms used to have a lot of "stuff" piled in them "just in case" or "because that's a perfectly good item"... I'm still working though that, and have made a lot of progress, but it's a real thing.

 

[KenSmithFan]

From what I've read, only a small fraction of people murdered during the Terror were aristocrats.

Well, the thing about a joke is that it's not a documentary and doesn't need to be historically accurate to be funny. Apparently at least 12 people understood what I was saying.

 

[dbsfgyd1]

Sounds great and very close to what my wife and I did, we're in our late 50's, but it seems to me that conditions today are WAAAAY different than when we started. Our work ethic is the same, but the cost of getting started is exponentially higher.

It’s not the conditions, it’s lack of being prepared for it. As a retired financial planner, looking and analyzing 1000 of people’s financial lives, the biggest problems are total lack of personal financial education, an aversion thrift and not subscribing to delayed gratification.

A couple of other things to point out. Have you noticed how much bigger the average house size being built these days as compared to ones built 40-50 years ago? My parents managed to raise a family with 4 kids in an 1,100 sqft house, my dad coverted a picnic pavilion into living quarters to avoid paying a mortgage. It took him another 10 years to have a basement put under it.

My father in law also built his own 900 sqft cape cod borrowing just enough for the excavation work to dig out the basement and a contractor to lay the first layer of blocks of the foundation. He took it from there with no mortgage. 10 years later with the 3rd child arrived, added 2nd story dormers for 3 bedrooms and a bath paid for with cash he saved . His acquired constructions skills came for 2 years of high school shop. 70 years laters it still stands as solid as a rock. His job? He was a printer devil. Learned linotype on his spare time, started covering local,sports for extra money< and eventual ended up as a managing editor of small town newspaper.

I’m pretty sure you remember the 80’s. You may even remember the market crash of 1987?. How about for 20 years the best rate for a 30 year conventional 20% down mortgage was over 9.75%?

In my opinion and this is not going to be real popular , it’s not so much different today as in years past other than a general sense of entitlement that has crept into our social construct. Much of this I’m going to lay at the feet of acadamia that is not teaching us what we need to do to be successful. I’m also so going to take a pot shot at Hollywood for brainwashing us with visions of an unobtainable standard of living.

 

[pb9717]

The downside is that the cost of living, particularly property, is expensive and getting more so all the time as more and more people from all around the world move into western EU and the UK. And ultimately our healthcare, education and infrastructure systems are operating way beyond capacity with funding levels a generation behind and with too many people drawing out who haven't paid in.

The US Healthcare system is the MOST profitable industry in the US. It has nothing to do with who’s paying in and who’s drawing out. The food sold in the US is intentionally altered to make us sick. Don’t believe me? Look further. The US healthcare system is designed to draw maximum profit from those who are sick. Insurers deny basic treatments, Life threatening illnesses require weeks of review by the insurers before possibly approving treatments for them. For the uninsured A CAT scan in the US is over $1000, and then getting a radiologist to read it? Tack on another grand. Same test in the EU…around $100. We are kidding ourselves if we think the entire health industry wants nothing but profit.

Last fall, I began seriously looking into leaving the US. I disclosed this on TB and got a private message from another member, calling me names, and telling me I needed Jesus in my life. The US is one of the only places I know where If you decide to leave, you get hatred, and venom from your fellow citizens.

Now personal freedoms are under attack. People are being pulled from thier homes. The Supreme Court just ruled that 100’s of thousands of immigrants no longer have protections to remain in country till their cases are heard by a court of law.

There is a tectonic shift happening here. Keep watching closely.

 

[JazznFunk]

It’s not the conditions, it’s lack of being prepared for it. As a retired financial planner, looking and analyzing 1000 of people’s financial lives, the biggest problems are total lack of personal financial education, an aversion thrift and not subscribing to delayed gratification.

In my opinion and this is not going to be real popular , it’s not so much different today as in years past other than a general sense of entitlement that has crept into our social construct. Much of this I’m going to lay at the feet of acadamia that is not teaching us what we need to do to be successful. I’m also so going to take a pot shot at Hollywood for brainwashing us with visions of an unobtainable standard of living.

With respect, as someone who started my 'professional life' in 2002/2003 after the 9/11 recession, and then got smacked squarely in the face by the 2008 crash before I ever really got my footing after graduation, there is no way one can prepare - especially when just starting out - for the amount of financial crises and upheaval that we've experienced in less than a quarter century. 2008 was one of the biggest generational shifts in housing ownership in the aftermath, with properties getting snatched off the market and into the hands of investors (public and private), reducing the available housing stock for purchase, because many of the properties were single family homes which got turned into rentals. I live in an area where that happened, so I can speak from personal experience on this one. You mentioned the sizes of homes being built. As touched on in an earlier reply, the amount of starter homes being built (1,500 SF or less?) is next to nothing now because the cost to build vs size vs selling price makes it unaffordable for builders to commit to them in many cases. Houses are being built way smaller to keep the price low (which often means they are TOO small to be practical), or they're being built bigger because they know people will pay the price for them.... because that's the only available inventory. People either choose to go into debt for a home that's too big just to own it, or they pay rent that's higher than a mortgage payment, which doesn't help their credit score at all. That's another criminal thing.... paying rent doesn't help build credit STILL to this day, unless you're one of a handful of landlords who chooses to report it.

Working people in general don't have a sense of 'entitlement', unless you consider wanting to own a house at reasonable price as being 'entitled'. It IS the conditions to a large degree, when you look at wage stagnation vs inventory vs price vs interest rates. Yes, you had high interest rates in the 80s, but you also had far lower home prices and better wages/compensation packages for jobs vs now.... and healthcare was not as expensive.

Every generation experiences challenges, but nearly all of the things you mentioned are red herrings which completely ignore the things that are completely out of peoples' control, that they can't reasonably plan for, which nearly wrecked the economy and cost many of us our jobs and livelihoods for at least a few years' time. You can be well educated with a good sense of financial responsibility and discipline and live below your means and still never be 100% prepared the way people preach about it. 2008 changed me into a skeptical bear, and made me even more reticent to go into debt of any kind, which has been very beneficial given the amount of volatility which seems to persist around us.

 

[RandomKaren]

The US Healthcare system is the MOST profitable industry in the US. It has nothing to do with who’s paying in and who’s drawing out.

I was referring to healthcare in the UK and the EU.

 

[pb9717]

I was referring to healthcare in the UK and the EU.

Bygones.

 

[djmay]

With respect, as someone who started my 'professional life' in 2002/2003 after the 9/11 recession, and then got smacked squarely in the face by the 2008 crash before I ever really got my footing after graduation, there is no way one can prepare - especially when just starting out - for the amount of financial crises and upheaval that we've experienced in less than a quarter century. 2008 was one of the biggest generational shifts in housing ownership in the aftermath, with properties getting snatched off the market and into the hands of investors (public and private), reducing the available housing stock for purchase, because many of the properties were single family homes which got turned into rentals. I live in an area where that happened, so I can speak from personal experience on this one. You mentioned the sizes of homes being built. As touched on in an earlier reply, the amount of starter homes being built (1,500 SF or less?) is next to nothing now because the cost to build vs size vs selling price makes it unaffordable for builders to commit to them in many cases. Houses are being built way smaller to keep the price low (which often means they are TOO small to be practical), or they're being built bigger because they know people will pay the price for them.... because that's the only available inventory. People either choose to go into debt for a home that's too big just to own it, or they pay rent that's higher than a mortgage payment, which doesn't help their credit score at all. That's another criminal thing.... paying rent doesn't help build credit STILL to this day, unless you're one of a handful of landlords who chooses to report it.

Working people in general don't have a sense of 'entitlement', unless you consider wanting to own a house at reasonable price as being 'entitled'. It IS the conditions to a large degree, when you look at wage stagnation vs inventory vs price vs interest rates. Yes, you had high interest rates in the 80s, but you also had far lower home prices and better wages/compensation packages for jobs vs now.... and healthcare was not as expensive.

Every generation experiences challenges, but nearly all of the things you mentioned are red herrings which completely ignore the things that are completely out of peoples' control, that they can't reasonably plan for, which nearly wrecked the economy and cost many of us our jobs and livelihoods for at least a few years' time. You can be well educated with a good sense of financial responsibility and discipline and live below your means and still never be 100% prepared the way people preach about it. 2008 changed me into a skeptical bear, and made me even more reticent to go into debt of any kind, which has been very beneficial given the amount of volatility which seems to persist around us.

If one looks at the ratio between annual income and house prices for the past 50 years, it is clear that conditions in USA have changed.

 

[JazznFunk]

If one looks at the ratio between annual income and house prices for the past 50 years, it is clear that conditions in USA have changed.

Yeah, that's why when I see these quips about how 'conditions aren't that different', I wonder what data sets are (not) being used to qualify it. 'Conditions' apply to so many micro level things vs just the macro data. The shifts in just the last 25 years are very drastic.

 

[djmay]

Yeah, that's why when I see these quips about how 'conditions aren't that different', I wonder what data sets are (not) being used to qualify it. 'Conditions' apply to so many micro level things vs just the macro data. The shifts in just the last 25 years are very drastic.

When I was in school more than 50 years ago, there was a saying; "figures don't lie but liars figure."

 

[backin82]

With respect, as someone who started my 'professional life' in 2002/2003 after the 9/11 recession, and then got smacked squarely in the face by the 2008 crash before I ever really got my footing after graduation, there is no way one can prepare - especially when just starting out - for the amount of financial crises and upheaval that we've experienced in less than a quarter century. 2008 was one of the biggest generational shifts in housing ownership in the aftermath, with properties getting snatched off the market and into the hands of investors (public and private), reducing the available housing stock for purchase, because many of the properties were single family homes which got turned into rentals. I live in an area where that happened, so I can speak from personal experience on this one. Working people in general don't have a sense of 'entitlement', unless you consider wanting to own a house at reasonable price as being 'entitled'. It IS the conditions to a large degree, when you look at wage stagnation vs inventory vs price vs interest rates. Yes, you had high interest rates in the 80s, but you also had far lower home prices and better wages/compensation packages for jobs vs now.... and healthcare was not as expensive.

Every generation experiences challenges, but nearly all of the things you mentioned are red herrings which completely ignore the things that are completely out of peoples' control, that they can't reasonably plan for, which nearly wrecked the economy and cost many of us our jobs and livelihoods for at least a few years' time. You can be well educated with a good sense of financial responsibility and discipline and live below your means and still never be 100% prepared the way people preach about it. 2008 changed me into a skeptical bear, and made me even more reticent to go into debt of any kind, which has been very beneficial given the amount of volatility which seems to persist around us.

I started my "professional" life with a masters in structural engineering directly into the 08/09 downturn, and spent the first two years driving school buses to survive. And while I agree with a lot of the hardships we face now, I'd also point out that houses are larger and nicer (as our cars) than the standard was in the 1980's. It's not only that prices have increased, it's that the "standard" has drastically increased also.

This is all while household sizes have decreased in that timeframe by almost one person. So people are expecting much larger homes while complaining that housing is so expensive.

The median home size was around 1,500 sf in 1960.
The median home size today is around 2,300 sf.

That's a massive increase.

Interestingly, the cost per square foot hasn't changed much. People just want WAY more house than they used to. Affordability isn't the root problem. It's home sizes. I believe this changed drastically when so many households became dual income. It instantly opened up new revenue, and people immediately started buying bigger, nicer, and more stuff (including homes). The solution to "affordability" is to simply buy a smaller home. It's really not difficult to understand.

Now, I DO agree that we should ban or severely curb corporate ownership of homes for a variety of reasons, because that is a major problem that is bad for our society and economy.

 

[backin82]

If one looks at the ratio between annual income and house prices for the past 50 years, it is clear that conditions in USA have changed.

You can't directly compare these and create useful metrics. You have to look at it on a price per square foot basis, because homes have drastically increased in overall size.

 

[WG Plum]

Well-regulated capiltalist markets can work pretty well for a large majority of people (though not everyone, that’s just an inherent part of the deal). The emphasis being on well-regulated. That very important bit has been systemically de-emphasized since the 80s with predictable results.

 

[FRoss6788]

Home size is irrelevant, housing cost of all types has gone up exponentially, be it apartment rentals, house rentals, or the 900 sf. starter home built in 1953....

Our first apartment my wife and I rented in Belmont, CA after getting married in 1988 was $500, utilities included. A tiny 1 bedroom off a busy highway now goes for well over $2000.

Wages have not kept up anywhere near that rate.

 

[FRoss6788]

You can't directly compare these and create useful metrics. You have to look at it on a price per square foot basis, because homes have drastically increased in overall size.

Home size for current builds have zero to do with housing costs, ZERO.

Why does everyone think people starting out are looking to buy a brand new house?

 

[djmay]

I started my "professional" life with a masters in structural engineering directly into the 08/09 downturn, and spent the first two years driving school buses to survive. And while I agree with a lot of the hardships we face now, I'd also point out that houses are larger and nicer (as our cars) than the standard was in the 1980's. It's not only that prices have increased, it's that the "standard" has drastically increased also.

This is all while household sizes have decreased in that timeframe by almost one person. So people are expecting much larger homes while complaining that housing is so expensive.

The median home size was around 1,500 sf in 1960.
The median home size today is around 2,300 sf.

That's a massive increase.

Interestingly, the cost per square foot hasn't changed much. People just want WAY more house than they used to. Affordability isn't the root problem. It's home sizes. I believe this changed drastically when so many households became dual income. It instantly opened up new revenue, and people immediately started buying bigger, nicer, and more stuff (including homes). The solution to "affordability" is to simply buy a smaller home. It's really not difficult to understand.
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Now, I DO agree that we should ban or severely curb corporate ownership of homes for a variety of reasons, because that is a major problem that is bad for our society and economy.

Take that same house that was built in 1960 and the selling price today. It will cost much more in terms of annual income. This is the point of several posts by owners of homes here. My daughter and her husband just bought an old rancher in the Chicago suburbs for 362k.