Current Events > 80s babies brokest generation ever

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https://slate.com/business/2018/05/millennials-are-in-a-deep-financial-hole-compared-to-past-generations.html

In a new study this month, economists from the Federal Reserve Bank of St. Louis examined whether Americans are now wealthier or poorer than previous generations were at their age. It turns out that older households (those headed by someone born before 1960) are a bit better off than those their age had been in the past, while younger households (those headed by someone born after 1960) are generally worse off. And 1980s babies are in the most dire shape of all: As of 2016, the median net worth of those born around the Reagan years was 34 percent lower than what past trends would predict for their age group. Those born in the 1970s, the GenXers, were just 18 percent behind.

Why are younger families so far behind the curve? According to the Fed report, the problem is not what theyre earning, nor their savings habits (the researchers find that, contrary to popular belief, Americans born in the 80s actually put away money at higher rates than Boomers or Gen Xers did at their age). Instead, the problem boils down to houses and debt. Americans born in the 1960s and 70s were up to their necks in mortgage debt when the housing bust hit, and their net worths plummeted with housing prices. But now that home values have recovered, their finances are healing. Families whose heads were born in the 1980s are different, the report states. Loaded down with student debt, auto loans, and credit card balances, less than half own homes and relatively few hold assets like stocks, meaning theyve missed out on the runup in asset prices of the last few years, and its possible theyll never be able to build wealth fast enough to match previous generations.

Technically, 80s babies dont have the heaviest debt burden ever; theyre still behind the standard set by those born in the 70s. But the difference, again, is that Gen X levered up to buy actual assets. Millennials are paying for their diplomas. The Fed staffers hold out a sliver of hope that, as the most educated generation yet, those born in the 80s will earn enough to dig themselves out of the pit theyre currently in. But otherwise, its possible theyll become members of a lost generation for wealth accumulation.
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Basically, boomers are the mortal enemies of millennials

But if we live long enough, we get to pull the life support from boomers in another 15-20 years

The thought of that is enough to keep me motivated
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I can't disagree with this. Seems like my 90s friends are even better off. But then I don't have crushing student debt, just a small loan.
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80s baby checking in. Yeah, there have been times I could've used more disposal cash as the head of my household :)
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80s babies are also in that time of life when you pretty much have to take on debt. Mortgage, cars, student loans, home improvements, unexpected emergencies...
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Boomers: *Borrow trillions against the future, wonder why millennials have all this debt*

80's baby here and while my "net worth" isn't something to brag about - I'm doing pretty damn well for myself (homeowner, several cars, money in the bank, etc.).
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Moral of the story - don't take out a massive mortgage so you can by a McMansion just because the Joneses bought one.

silentwing26x posted...

Moral of the story - don't take out a massive mortgage so you can by a McMansion just because the Joneses bought one.

I'd sooner take out a mortgage these days then taking out a massive loan for College - which, more and more, seems to get people less and less.
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Caution999 posted...

silentwing26x posted...

Moral of the story - don't take out a massive mortgage so you can by a McMansion just because the Joneses bought one.

I'd sooner take out a mortgage these days then taking out a massive loan for College - which, more and more, seems to get people less and less.

Preach
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Interesting. I was born in the early seventies.

silentwing26x posted...

Moral of the story - don't take out a massive mortgage so you can by a McMansion just because the Joneses bought one.

I think its more saying you should do that instead of taking out loans to go to school
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EvalAngell posted...

Caution999 posted...

silentwing26x posted...

Moral of the story - don't take out a massive mortgage so you can by a McMansion just because the Joneses bought one.

I'd sooner take out a mortgage these days then taking out a massive loan for College - which, more and more, seems to get people less and less.

Preach

Indeed. Now, yeah you want to make sure it's an affordable mortgage. Don't go house poor for going over the top.

I bought my house for $165,000. Worst case, I know I'll have it paid off by the time I'm in my early 60s and - if I'm lucky, considering retirement. Putting any excess money in my 401k.
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A house is basically like a saving's account now, and real estate is going to flat line big time once brick and mortar withers away. In 20 years malls will be a rarity. If you want to make real investments, go into stocks.

wah_wah_wah posted...

A house is basically like a saving's account now

housing has been the primary source of equity for the average american since like world war II at least

the difference now is that there was a recession that was predicated on a housing crisis, but even those who suffered from that are doing better now that there has been a recovery
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wah_wah_wah posted...

A house is basically like a saving's account now, and real estate is going to flat line big time once brick and mortar withers away.

just curious what the correlation is between the two. I'd much rather buy a house that's closer to a grocery store/Target/Walmart/pharmacy than one next to a mall.
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Millennials...the generation that "chooses hope".
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Balrog0 posted...

wah_wah_wah posted...

A house is basically like a saving's account now

housing has been the primary source of equity for the average american since like world war II at least

the difference now is that there was a recession that was predicated on a housing crisis, but even those who suffered from that are doing better now that there has been a recovery

Equity is like a saving's account. But houses are money pits and they get taxed to hell. People say "oh I doubled my money on this house" but are they counting property taxes and all the maintenance and work they put into it?

EvalAngell posted...

wah_wah_wah posted...

A house is basically like a saving's account now, and real estate is going to flat line big time once brick and mortar withers away.

just curious what the correlation is between the two. I'd much rather buy a house that's closer to a grocery store/Target/Walmart/pharmacy than one next to a mall.

You'll start to see commercial zoning converted into residential zoning because the big stores won't be able to compete with online retailers. More supply = less demand = lower prices.

wah_wah_wah posted...

Equity is like a saving's account. But houses are money pits and they get taxed to hell. People say "oh I doubled my money on this house" but are they counting property taxes and all the maintenance and work they put into it?

Exactly!

lol good they're the same people criticizing others for living with their parents

Born in 84.

Im doing okay for myself. The hugest financial pit fall for me has been college. I was raised and brainwashed that everything hinged on going to college but also that I could be anything I wanted. Put that in a blender and you get a bunch of student debt and a worthless diplomawasted money, wasted time. Its fundamentally the biggest depression of my life and even now I feel I earn much less than I could have if I made better decisions post-high school.
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CapnMuffin posted...

Born in 84.

Im doing okay for myself. The hugest financial pit fall for me has been college. I was raised and brainwashed that everything hinged on going to college but also that I could be anything I wanted. Put that in a blender and you get a bunch of student debt and a worthless diplomawasted money, wasted time. Its fundamentally the biggest depression of my life and even now I feel I earn much less than I could have if I made better decisions post-high school.

what did you major in and what do you currently do for work if you don't mind me asking?
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EvalAngell posted...

CapnMuffin posted...

Born in 84.

Im doing okay for myself. The hugest financial pit fall for me has been college. I was raised and brainwashed that everything hinged on going to college but also that I could be anything I wanted. Put that in a blender and you get a bunch of student debt and a worthless diplomawasted money, wasted time. Its fundamentally the biggest depression of my life and even now I feel I earn much less than I could have if I made better decisions post-high school.

what did you major in and what do you currently do for work if you don't mind me asking?

He works in forging Smash Bros screenshots (yeah I remember that)

EvalAngell posted...

CapnMuffin posted...

Born in 84.

Im doing okay for myself. The hugest financial pit fall for me has been college. I was raised and brainwashed that everything hinged on going to college but also that I could be anything I wanted. Put that in a blender and you get a bunch of student debt and a worthless diplomawasted money, wasted time. Its fundamentally the biggest depression of my life and even now I feel I earn much less than I could have if I made better decisions post-high school.

what did you major in and what do you currently do for work if you don't mind me asking?

I have a Bachelors of Arts. Focus in film/animation.

Currently working in banking. lol

If there is one thing. I did get to use my schooling a bit. Interned with a studio briefly, made a movie, etc. got a little paycheck. But of course they kind of went under just when I thought I had finally made it. And granted I could probably do a little contracting work as a side hobby for extra cash, the motivation and time just arent there anymore. Maybe once my wife is done with her classes Ill consider learning a programming language or something... its never too late I guess.
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If you want to build wealth, don't take out a massive mortgage on a house you don't need. Be happy for a smaller place until you earned a bigger place. Tens of millions of people got boned during 2007 - 2009 because they were leveraging much more house than they could afford and didn't have enough cash reserves to survive an economic downturn.

If you're going to take out student loans, go for something that has a return on investment. Majoring in gender studies on $40,000 a year in student loans is a good recipe for being unemployed, so don't do that.

Trade schools are a great option, as you can find paid apprenticeships that teach you everything you need to know in a year or two and then you'll have well-paid skills that can take you anywhere in the country. Hell, anywhere in the world.

Live on less than you make. Don't waste money on frivolous shit if you aren't earning enough. It's not enjoyment to finance a BMW when you've barely started your first full-time career. It's slavery. Gotta defer pleasure and build yourself up into a sustainable financial position before you acquire toys.

Born in 86. Got a little over 100k in the bank plus whatever's in my 401k and IRA.
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Balrog0 posted...

housing has been the primary source of equity for the average american since like world war II at least

You're talking sweat equity though. I feel like the stock market would be an easier investment to commit to.
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Balrog0 posted...

the problem boils down to houses and debt.

Welp, CE, I am going to tske this moment to gracefully and humbly mention that

https://www.youtube.com/watch?v=oAJ2Tknp-EM" data-time="
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