[sremani]

Wait a minute my friend, people had it hard before WWII and people seem to be overly positive about the two decades following WWII. People's life expectancy has risen, so a pension plan would have to feed a person for a decade now, has to feed them for two or more. Sorry to burst your bubble, but if you are in a work force for 30 years its your responsibility to build a nest egg. Social Security was supposed to be a safety net, not a retirement plan.

Both the Left and Right, has to stop glorifying the 50s and 60s, yes they gave us 70s and stagflation and Regan.

PG has a wonderful column about refragmentation. http://paulgraham.com/re.html

subsequent HN comments https://news.ycombinator.com/item?id=10826836

[brianvan5155]

My comment didn't speak to the pre-WWII era, but going back to the nineteenth century, the U.S. has always had a robust workforce more-often-than-not offering opportunity for upward mobility for those motivated enough to take on the work. What's significantly different now is that we have a much bigger safety net for the retired, young, ill and disabled.

But what's also different is the very recent lack of upward mobility. People born after the 70's are coming in behind their parents unless they inherit land or equity holdings. Does a worker stop paying rent to a landlord in order to build that "nest egg" as you admonish them to do so? It's hard to save for retirement when the landlord keeps coming back every year with a $300/month rent increase - because they can, because every landlord is doing it, and because elected officials and courts give them cover to do so.

[lettergram]

That's actually why most financial advisers will tell you not to rent long term if at all possible. Purchasing a home (on average) will cost you nothing in the long term because you can refinance later in life or use it as an asset for other investments.

Essentially, not a single dollar paid to a landlord comes back to you. At least a percentage of every dollar will come back to you with a mortgage. Not to mention if you buy a home, you'll often pay less than you would renting. This makes perfect sense if you think about it, the landlord is trying to make money.

Point being, buying a home is a "nest egg" which is why 0-5% down was and is a thing.

If you don't like landlords move, and buy your own home. It's really that easy and will benefit you in the long run.

[brianvan5155]

The average sales price of a home in my county is $2,000,000

The lowest county average sales price within a commuting hour of my workplace is probably $700,000, to live somewhere fairly isolated and dead.

It would only be "that easy" if I made $150k a year. That is still a top-10% salary in 2016, and yes my current salary is location-dependent, so I'm stuck between a rock and a hard place on that. I would start planning for a purchase 10 years out, but my down-payment savings money pretty much flies out the window toward debt and utilities. And most of the homes in my area sell in instant cash deals anyway, down payments are a joke. (Thanks, anonymous LLCs representing foreign wealth!)

I'm in a very particular situation with a lot of unusual disadvantages, but I'm also a web dev working for a large consultancy in one of the big US cities. Every one of my peers in the workplace is struggling with suburban homebuying expectations; while every one of my urban social peers holding less-prestigious jobs is almost certain to be working poor by age 50. The grind is already happening. There needs to be more political support for regulation and infrastructure projects that create the opportunity for working-class home ownership investments. It sounds like you support this, and your efforts are needed in politics too.

[yompers888]

In most places around the country we need substantial decreases in infrastructure projects, scaling down of what already exists, and a much more thoughtful (does it fit the place, as well as fitting the urban road code?) application of the funding we do maintain.

We may be agreeing, but I'm always a little worried when people vaguely argue for more infrastructure. We pursue such enormous and unproductive road-building in this country in the name of growth. Induced growth is a siren's song to our governments; they've already driven us onto the rocks, but it would at least be nice if we'd address the problem before we sink the country anymore with huge debts, public and private.

[Roboprog]

Well, the climate sucks in Sacramento, but at least I'm not a rent slave! (I work as a developer, and most of us in this area don't make $150K, but we don't need to)

I love the SF/San Jose/Marin climate, but it's too crowded and too expensive to live there :-(

[wolfgke]

> The average sales price of a home in my county is $2,000,000

Why not buy a single apartment? Or buy and afterwards inhabit a house together with a small group of friends so that the amount of money is shared between the group?

[galdosdi]

Rent vs Buy definitely is geography-based. The number to compare against rent is mortgage - principal + expenses, and in some places that's much less than rent, in others it's similar, and in others it's much more.

In places where it's much more, buying is a bad idea (unless you're really committed to living there forever and are really committed to speculating that prices will only even go much higher there -- but that's taking on a huge risk, not decreasing it).

Remember, you can always just SAVE the money you would have put towards mortgage principal. Sure, with a mortgage after 30 years you have a house free and clear. But at the same price, a renter who saved the money that would have gone towards mortgage principal still ends up with a pile of money after 30 years -- a pile that is probably more diversified rather than being all in one single asset correlated to a single metro region's economy. I mean, who knows if the area I buy in will still be popular in 30 years?

[brianvan5155]

That IS for a single apartment

I'm married & the thought of doing a "house share" with other married couples seems very cramped up & a recipe for disputes. This is aside the fact that it's absurd that dual-working married couples would have to resort to this at all, it's a completely unacceptable arrangement for most couples in the US at this point. But nothing's off the table it seems

[wolfgke]

It's not uncommon in the more expensive German cities as Munich to do a flat sharing even after you finished your studies. You often did a flat sharing when you studied, so you often are already used to the situation. On the other hand living space is too expensive to be able to afford (even renting) if you don't have a really good paying job.

But perhaps this is a different mentality between US and Germany.

[ptero]

I know plenty of folks who bought homes on the assumption that it is somehow a good investment, they are paying themselves, etc. to find that taxes, fees and repairs eat up both their free time and expected profits.

Buying a home can be profitable, but it can also impact the career (e.g., tie one up in the wrong geography). Many landlords make this work by investing lots of time in it (and scaling it up to multiple properties).

A younger person working in tech will IMO be much better off investing this time into learning new things, networking. My 2c.

[pjc50]

> 0-5% down was and is a thing

Was a thing. The 0% down have been thoroughly killed off by the financial crisis. I could agree with everything you said right up to 'easy', because it's incredibly hard. London is full of young renting professionals who aren't able to save enough to outrun house price inflation to even get a deposit together.

[infinite8s]

Apparently certain occupations (like doctors) can get 0% down loans with rates competitive to 20% down loans.

[refurb]

Point being, buying a home is a "nest egg" which is why 0-5% down was and is a thing.

Except for all those folks who had to declare bankruptcy during the 2008 crash because their mortgage reset and the value of their house plummeted.

[sremani]

There is nothing to west of Oregon (technically pacific ocean), most of the 19th century is because of west-ward expansion. People can go to Montana and get homestead etc. Again, this is not beating up on people who are down on luck, My inspiration in life has been Helen Keller, who is blind, deaf and mute, she wrote damn fucking awesome books. You are trying to shoot the messenger, your argument is similar any thing that is worthy has already been discovered. Upward mobility is hard, it usually is and has been and historically there are only few times, when a raising tide rose all the boats, but there is a thing about tides, they raise and fall.

[vertex-four]

Your entire post is nonsensical - fact of the matter is that unlike Silicon Valley tech workers, the vast majority of the country doesn't get paid six figures for sitting on their arses all day, and the vast majority of what they are paid goes to necessary expenses. Building enough savings to survive for two decades is simply not possible unless you're decidedly upper middle class.

[sremani]

I disagree with your assessment. I do not live in Silicon Valley nor do I make 6-figure salary.

[pjc50]

> its your responsibility to build a nest egg

In the time of negative bond yields?

It doesn't actually change the quantity of economic output needed by old people whether their pension is private or public. Either it's routed through taxation or dividend payments, but the end result - diverted from accumulation/investment into consumption - must be the same.

Unless, of course, the move to push people into private pensions is so their value can be reduced without anyone in particular having to take responsibility for that. Philip Green passim.

[lbotos]

I'm not sure why negative bond yields means that you shouldn't be living below your means and trying to secure a positive financial future?

[pjc50]

Do you want moral homilies or financial advice?

Sure, living below your means is generally good advice; but my point was that as interest rates go down that affects the discount rate, and the amount of income required to achieve a particular nominal income in retirement increases dramatically.

(Also, there's quite a lot of people who are barely able to get over the first financial hurdle of paying rent, let alone buying a house, both of which are more important than pension saving. Being a renter even with a big pension is much worse than being a homeowner with a small pension.)