[al_borland]

> It’s Hard to See My Parents Live So Lavishly While We’re Struggling

While I won't deny there are some problems currently, I think people comparing where they start to where others end is a huge mistake and leads to a lot of unnecessary anguish.

Someone in their 60s is supposed to be doing better than someone in their 20s. They had 40+ years to work and save. If they did it right, that will put them in a better position than a 20 year old... just like that 20 years old should be in a better position when they are in their 60s. It would be pretty disheartening if people in their 20s saw that it just gets worse.

[Avicebron]

Well a lot of those now 60 year olds were buying houses and land in their 20s-30s..

[standardUser]

Those 60-year-olds existed in a brief and exceptional moment of wealth creation brought about by factors that are unlikely to happen again in ours or our children's lifetime. The problem being that the American ethos decided to pretend that brief moment was normal and sustainable.

[OutOfHere]

AI and automation are creating plenty of wealth, just not for the worker :)

[ctoth]

What factors? Why are they unlikely to come about again? How do we make them come about again?

You realize that your comment reads like "well, actually things shouldn't be getting better over time"

I, for one, completely disagree.

[eudamoniac]

The factors of millions of men (workers) dying in war while the country itself was untouched, and all of Europe being bombed, leading to cheap land, increased demand for labor, and a powerful dollar. We just have to nuke Europe and cull a bit of our own people too and we'll be in the golden age again. Or we have to get used to it.

[UncleMeat]

A 60 year old was born in 1966 and started their career in the mid 80s. That's displaced pretty far from ww2.

[vkou]

> The factors of millions of men (workers) dying in war while the country itself was untouched,

Less than half a million Americans died in WW2. For American demographics, the war was a footnote, unlike the utter devastation it inflicted on Germany, Poland, Yugoslavia, the USSR.

[zeven7]

They burned non-renewable resources at an unsustainable pace, like nothing ever seen before in history, resources that took millions of years for the Earth to produce, gone in a century, to make themselves wealthy - among other things.

[danaris]

But a huge portion of what they burned those resources to produce was energy—both to generate electricity, and to power their vehicles.

We now have renewable energy sources for both of these things spinning up faster than ever. It won't be all that long before we can generate a majority of our energy with clean power that doesn't require consuming any non-renewable resources.

No; much more important differences between then and now are the top marginal tax rates and the labor power.

[thinkingemote]

You might want to qualify this with start to buy a house and get a mortgage and then pay off when older than 20s-30s.

I think some people in the comments are thinking you are saying they could outright buy a house straight out of school! (Which in a way might be a symptom explained in the article!

[trollbridge]

It should be noted the house my parents bought in their early 40s was a 3 bedroom, 1 bath, with no air conditioning. The school district was so-so, the lot wasn't very big, and the economy in that city at the time was declining. Most young people wouldn't be too interested in that today.

(Interestingly the cost of housing in the Bay Area back then - late 1980s - was the same as that Rust Belt city; we almost ended up there.)

[mindslight]

So many comments eager to dismiss the message with the same old refrains. Refrains that were directly addressed in the article.

[dachworker]

My parents bought their house cash. No they were not high earners and not even median income earners. Yes the house is now worth close to a million dollars.

[al_borland]

What the house is worth today is a lot of luck. I just looked at the house my parents built in 1978. It last sold for $225k in 2019.

[anon27589421275]

How is this totally random personal anecdote relevant to this incredibly complicated, large scale societal discussion?

[flohofwoe]

Buying a house in their 20s... are you serious? If true and not just an urban myth, that must have been a US specific thing, maybe caused by the exceptional situation of the US coming out as the biggest winner of WW2. Anywhere else in the world you could be lucky to even move out of your parent's rented flat in your 20s ;)

PS: also, what's the obsession of young people with home ownership

[estearum]

It was a US-specific thing created by massive post-war infrastructure investment (read: suburban sprawl) and cheap automobiles.

This entire problem more or less resolves to the cost of land. It became effectively super-cheap post-WW2 for the aforementioned reasons. Now we've run out that runway and will face rolling bankruptcies across all sorts of municipalities due to infra maintenance costs.

[archonis]

Working class parents in their 20s in the USA could afford to buy their own homes well into the 2000s. Some got burned by cyclical factors, high interest, etc...; but many still achieved sustained lifetime home ownership.

[singingtoday]

I don't buy that because China has very high home ownership rates.

So it can be done. Even today.

[flohofwoe]

China is arguably currently also in an exceptional situation though. The question is how long that lasts. The next generation or the one after will most likely also complain that their parents were much better off when they were young ;)

[amanaplanacanal]

Possibly. I bought my first house in my 20s in the US, this would have been in 1980s. I remember the 12.5% interest on the mortgage.

[memcg]

We bought our house in 1982 with a 15.5% mortgage rate, refinanced to 11.25 in 1985, then 8.5 in 1987.

[slopinthebag]

Not just US - UK, Canada, Australia, etc.

[simmerup]

I guess you’re not British either then?

[flohofwoe]

German, of course ;)

The German equivalent is that everybody is complaining about rising rents in city centers because everybody wants to live in city centers. Home ownership in Germany basically means that you'll have to pay it off for the rest of your life anyway (and that's not a new phenomenon) so in the end there isn't all that much difference to renting finance-wise, except that renting is usually much less hassle.

[psd1]

The usual distinction between rent and mortgage is that your housing costs build equity when you are paying off your mortgage. Either way, your salary vanishes, but if you pay off the mortgage then you own a six-figure asset.

What the calculation looks like is extremely dependent on local constants, of course. I'm some countries, housing depreciates.

[yesco]

I purchased a house within commuting distance of Boston in my mid 20s, back in 2022. Didn't need PMI, the mortgage terms weren't unreasonable to me (fixed 5% interest), and the monthly payments for utilities plus the loan are still well within my means. It's even got an attached garage.

I don't want to get too specific here for privacy reasons, but I believe the main difference between myself and my peers is that I chose to live with my parents and save for a house instead of moving out and getting an apartment right away during/after college. With almost zero real expenses outside my student loans, and the median software engineer salary for the region, I was able to save enough for a down payment after just a couple years. I did this because I disliked the idea of having no equity and paying rent to offset someone else's mortgage instead of saving for my own. My parents really liked that reasoning.

In many respects I'm fundamentally an outlier, yet once I bought mine, my peers with much lower incomes started doing the same after I explained the financials. When they actually sat down and calculated the mortgage payments, they realized it wasn't that bad, as long as they got something on the smaller side, which is still bigger than an apartment anyway.

To be clear, housing costs were crazy and still are. But I sense "crazy" is pretty relative when talking to people online from other countries. Housing in the US is expensive, especially compared to various convenient periods within the last 100 years. But even now, it's not the unrealistic back-breaking dream it seems to be when I talk to Europeans about it, and I suspect that's why so many Americans on social media overestimate the costs.

[telchior]

According to census bureau data, 1 in 3 people aged 18-34 now live with parents, a huge change from past generations. So you're hardly an outlier in that respect.

[BobaFloutist]

> the main difference between myself and my peers is that I chose to live with my parents and save for a house instead of moving out

It was very clever of you to choose to be born to tolerable parents with enough spare cash to let you live with them and save up, rather than jerks or even just poor parents that needed your help as soon as you got a job.

[mrktf]

> the main difference between myself and my peers is that I chose to live with my parents and save for a house instead of moving out

That is 'small' cheat code if parents tolerable. I have multiple peers which got much better life and places to live because lived with parents in their 20s.

It just doing napkin math and even if you live 5 years with parents and doing minimal savings (saving rent and part of food) you already poses good chunk of deposit when comes to buying property.

[yesco]

I reject your characterization of my comment. I explicitly called myself an outlier and said I didn't want to get too specific, so I'm not sure where you're getting "clever" from. I wasn't claiming credit for my circumstances. I was identifying the actual variable that separated my outcome from peers in similar circumstances, because that's useful information for anyone who does have that option available.

And plenty of people do. I know people who could live at home rent-free and chose apartments anyway because they wanted independence sooner. That's a legitimate preference, but it's still a tradeoff, and pretending the tradeoff doesn't exist because some people don't get the choice at all helps nobody. "Not everyone can do X" is true of literally every piece of financial advice ever given. It doesn't make X bad advice for the people who can.

[jimbokun]

Yes but the article also cites that the average age for home ownership has gone way up, houses cost far more relative to median income than before, rent is more expensive, and cultural changes requiring two income families and paid childcare have driven up child care costs.

[ofjcihen]

Well, anecdote, but I’ll chime in.

I’m the only person in my friend group able to afford a house in the foreseeable future and that’s been because of various strokes of luck (and some hard work of course).

My wife’s situation is the same. We’re all in our 30s.

And we’re talking any house here. Not the ridiculously expensive ones in major cities.

Som have confided in me that this feels hopeless, things keep getting more expensive, money keeps feeling like it’s worth less etc.

The general feeling at this point is past resentment with them. It’s more of accepted hopelessness.

[JKCalhoun]

Sure. But my excuse for denying my children would be that I also struggled at their age—zero handouts from either parent.

But I also think that attitude is a load of shit.

Early on in the 1980's I went to a community college to get the first couple of years of college out of the way. I sublet a room from a single woman (probably her landlord had no idea) and I rode a 10-speed bike between a pizza restaurant I worked at and the community college (yeah, sucked in the Kansas winter-time).

Later, at a university, I was able to work as a dishwasher at a dorm and pay my way through college.

But there's probably no way my kids can do the same 40 years later.

It would be, to me, a tragedy if our kids only finally "make it" when their parents die and all our assets are cashed in and divided among them. For myself, this would have come at a time when I didn't need the windfall.

I'd rather help them out now as they are trying to climb the ladder to homeowner, etc.

(It sure would have been nice if one of my parents could have forked over the cash to buy me that Macintosh Plus back in 1986. Alas, a student loan I was nervous to apply for did the trick.)

[abeppu]

In the early 2000s I saw a gubernatorial candidate talking to an audience of over achieving high school students and when asked about what he would do to make college more affordable. He told a story about how he waited tables to pay for college.

Totally not on his radar: changes in tuition over time, portion of budgets of public colleges that were coming from state funds (his tuition wasn't free but was close), vs changes in median hourly wages over the same period.

Very clearly on his radar: those students were not gonna donate to anyone's campaign regardless of what he said.

[thewebguyd]

It’s not hard to see why people find that unfair or whatever though. It’s complete disillusionment with the “dream.” Why is our society/economy structured in such a way that we spend our youthful years struggling and only get to enjoy the fruits when we are older? It’s why FIRE is so appealing to some, you get to get out early.

[flohofwoe]

> It’s why FIRE is so appealing to some, you get to get out early.

Isn't this exactly "spend the youthful years struggling and get to enjoy the fruits when you are older"? ;)

[vkou]

> spend the youthful years struggling

This would be accurate if remuneration were proportionate to how much you struggle, but from my observation of life, it really is not. There's no shortage of people who bust their asses for wages that I wouldn't be getting out of bed for.

[SpaceNoodled]

Yes, but at a much younger "older." Just working within the broken system for a potentially less-bad outcome.

[Aarostotle]

Funny. The FIRE people I’ve spoken to have an attitude of “if I’m going to do it, I may as well go all-in.”

[tayo42]

This article isn't about 20 year olds. Millennials are 30 to 40s

[doom2]

The problem is that someone in their 20s can't even envision a realistic path to where people in their 60s are. And for me personally, being somewhere between the two, I think I'm mostly doing things "right" and still am not optimistic I'll get to where my parents are. I don't even think I'll see all of the money I've paid into Social Security back, given the political rumblings about "reforming" that program. Which is to say that I can see why younger people might feel hard done by.

[bradleyjg]

> Someone in their 60s is supposed to be doing better than someone in their 20s.

That’s an incredibly new, and probably temporary, phenomenon.

Across the vast majority of space-time the non-working elderly are poorer than their still working children and rely on them.

As late as the Greatest Generation senior discounts weren’t a sick joke.

[port11]

Yes, Things Get Better Over Time, that’s also not a new phenomenon. Even if you don’t compare against a well-off previous generation, there are 2 issues:

1) Not enough young people can contribute to make social security payments to the elderly, across most of the developed world. A typical pension in Belgium is almost comparable to a typical young person’s salary.

2) At a young age, the previous 2–3 generations could afford social mobility levers, i.e. a house and car.

Note that I’m not commenting on the management, investment strategy, returns, or sustainability of social security (point 1).

“Across the vast majority of space-time”, the elderly also somewhat contributed to the tribal/community needs, trained their replacements, cared for grandchildren, and so on. Oh, and everyone was poor, so the range in standard of living was reasonably tight.

[al_borland]

The barrier to entry for investments used to be pretty high. Most people felt limited to what their employers offered. Even as access started getting easier, the knowledge was still difficult to get.

Currently, the barrier to entry has never been lower, and the access to information has never been better. I don't see either of those things changing any time soon.

Of course, even with that, basic financial literacy with younger generations seems to be at an all time low. The finger pointing on that could go in many directions.

[bradleyjg]

Yes, the finger pointing can and does go in many directions. Meanwhile the observed pattern is the boomers (actual boomers) get the golden path and every other generation doesn’t. Maybe they were uniquely virtuous and wise.

Strongly doubt the xennials will be as rich in twenty five years as 70 year olds are now.

[bryanlarsen]

I'd definitely take the other side of that bet. Xennials are significantly richer today than boomers were 25 years ago, generally own their house and have a 401K or similar.

Xennials have benefitted from the same forces that made the boomers rich. They're not young adults.

Xennials were at prime house buying age when houses were really cheap after the 2008 housing crash.

[bradleyjg]

https://en.wikipedia.org/wiki/Case-Shiller_index#/media/File...

If you bought at exactly the right second of the crash, houses were where they were at the peak of the late 80s bubble.

[bryanlarsen]

Mortgage rates in the late 80s were well over double what they were post-crash. For a 25 year mortgage, twice the mortgage rate means about double the payments.

[PxldLtd]

"If they did it right" is a bearing a lot of weight there. The window of "getting it right" has shrunk over the last 40 years and it's delusional to argue otherwise. People like myself are comparing themselves to their parents at the same age. My dad had me at my exact age now, had bought a house, could raise a family on his singular wage. That is non-existent now in my part of the country.

[jancsika]

> While I won't deny there are some problems currently, I think people comparing where they start to where others end is a huge mistake and leads to a lot of unnecessary anguish.

That an ungenerous and frankly dismissive reading of the article.

Joe asked his dad for the $15k loan to start a business, not go on vacations. He used his dad's retirement lifestyle as a goal for his future retirement. He used his dad's historical entrepreneurship as his current goal of starting a modest small business. Nobody of sound mind would even think you could live like a retiree on $15k.

Joe's own dad wasn't even as dismissive as you're being. He denied the loan because he considered it a form of coddling his son. There's no evidence in the article he thought his son would use it to attempt to live his retirement lifestyle.

Edit: clarifications

[eudamoniac]

Idk the numbers on this but I much more often hear "It's hard to see my parents living so lavishly while they're struggling." Apparently boomers are not big on saving for retirement or living within their means.