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[BigBooper]

People just have no sense of budgeting. If something goes wrong, don't worry about savings, pay it with debt. Go out to eat every day of the week instead of packing a lunch. Buy disposable phones every year or two. Get auto loans for multiple late model or new cars. Buy the kids all new cars. Buy new clothes every season.

I have zero sympathy for someone making such a claim and believing it. I do not believe you have to live that way no matter what you say.

 

[StreetsofBeige]

People just have no sense of budgeting. If something goes wrong, don't worry about savings, pay it with debt. Go out to eat every day of the week instead of packing a lunch. Buy disposable phones every year or two. Get auto loans for multiple late model or new cars. Buy the kids all new cars. Buy new clothes every season.

I have zero sympathy for someone making such a claim and believing it. I do not believe you have to live that way no matter what you say.

I dont think most people know you can get Line of Credits from the bank at probably Prime + 5% interest rate (much lower if you got good credit). So if someone is desperate for going on debt, why have a big credit card balance at 22%?

Everyone's personal bank has probably flooded a person's email and mailbox with LoC promotions to sign up and transfer balances over. And when you log online they probably got splash screens saying sign up.

Yet I bet most people are too lazy and would rather pay VISA or Mastercard 22%. Nuts.

IMO, credit cards are meant for people who can pay off stuff, emergency situations, and places you get stuck where they dont take cash or debit.

 

[BigBooper]

Never got that logic, i pay like what 120 a month, that's what 1400 a year.

For example cancer treatment is like what 150k on average, that's what 107 years of payments rofl.

Honestly i feel like any country without half decent healthcare is straight up a 3rd world country at this point.

Here i have to absolutely give zero shits if i tommorow get hit by a truck, or get cancer or get anything. I call the doctor, ambulance picks me up, stay at the hospital for a day or however long is nessesary, get fixed up of all my issue's, get all kinds of aftercare and free bandages etc and done, get even paid from my work because hey they understand.

Don't even get a bill.

That's mostly ignorance or dishonesty. Believe me I know about medical expenses. Insurance plans have a maximum out of pocket limit for treatment in network or out of network. Even if you signed up for the worst Obamacare plan and made the worst possible choices in regards to which hospitals and treatments you used, you would not be spending 20k a year.

It's a facade. People need to know which hospitals are in network with your insurance, and let that be your treatment hospital, but even if you're away and no hospitals are in network, there's a maximum out of network limit too.

 

[BigBooper]

I dont think most people know you can get Line of Credits from the bank at probably Prime + 5% interest rate (much lower if you got good credit). So if someone is desperate for going on debt, why have a big credit card balance at 22%?

Everyone's personal bank has probably flooded a person's email and mailbox with LoC promotions to sign up and transfer balances over. And when you log online they probably got splash screens saying sign up.

Yet I bet most people are too lazy and would rather pay VISA or Mastercard 22%. Nuts.

IMO, credit cards are meant for people who can pay off stuff, emergency situations, and places you get stuck where they dont take cash or debit.

Yea, also the rewards for credit cards are useful. If I make a big purchase, I always use a card and pay it off that month for the 1-5% rewards.

 

[StreetsofBeige]

Yea, also the rewards for credit cards are useful. If I make a big purchase, I always use a card and pay it off that month for the 1-5% rewards.

Yup. I have a cash back card.

I get annually anywhere from $100-200/yr lately (covid) to $500+ some years when I was at the office, since Id use it for company purchases and parties, business travel and any other weird shit. I even claimed a $10,000 company outing one time that made me $300 alone since restaurants are worth 3% back. No thanks secretary, I dont need the corporate card. I'll buy and expense it myself. And they love it since I wouldnt drag a corporate expense all year not claiming it till end of year.

One year I did a lot of renos and new furniture and claimed as much materials as possible. I spent about $25,000, so that was $250. Then did more renos to a new place which was probably the same spent on supplies and new kitchen appliances.

I've had a cash back card for probably 10-12 years and I'd estimate I've gotten back about $5000. Wont make me a billionaire, but if I'm spending money anyway, might as well grab $5000 back.

 

[Cyberpunkd]

People just have no sense of budgeting. If something goes wrong, don't worry about savings, pay it with debt. Go out to eat every day of the week instead of packing a lunch. Buy disposable phones every year or two. Get auto loans for multiple late model or new cars. Buy the kids all new cars. Buy new clothes every season.

Lots of websites e.g. T3 are literally pushing people to spend money - buy new phone, new bike, you need a new smart watch, etc. It’s a never ending vicious circle.

But this is not unique to millennials - my 60-year old mother has hundreds of clothes, dozens of handbags ans shoes, as everyone she is wearing 10% of it.

 

[6502]

If $100K isn't enough I suggest they drop their wife or girlfriend.

Either one.

 

[Unknown Soldier]

Today's reminder that $100k a year today is the same as $50k a year in 1990 due to the ravages of inflation.

What I'm saying is that $100k a year isn't a lot anymore, especially in the Tier 1 cities like NYC and LA where you are literally paying $2500 a month just on rent.

 

[LiquidMetal14]

People start living beyond their means and honestly, they need to have discipline.

It's your money but I have little sympathy if you can't manage your finances.

Live a good life but keep money in the bank, invest in your retirement, and make your money grow if you can.

 

[Relativ9]

I predict a large upset in the root cause of this problem at some point in the next 10-20 years; centralization. The main reason the spending habits of young high-earners are so out of control is that they have up until now all been forced to live relatively centrally, with all the spending pressures (cultrually and practically) that entials. With working from home now being more popular and possible than ever, a lot more people are going to move back into rural areas, and some (like me) will even chose to work completely remotely and move to low cost countries while maintainting contracts/clients in high-earning countries. Inner cities are going to see a wealth exodus leaving expensive apartments complexes, townhouses, and villas empty until the housing market adjusts and drastically lowers costs (which will probably cause another housing crash for the banks).

 

[ZywyPL]

The basics of finance need to be taught in middle schools or even younger. Pretty ridiculous that, at least the ones I went to, there were basically no instruction on different ways to save, grow, conserve money.

You only live once though and there's no afterlife. "OOOOooooh heaven is a place on Earth!" Spend that cash how you want, G.

It's the parents' tasks if you ask me. Buying everything/giving money for kids just like that teaches them absolutely zero respect for money, its value due to the hard work you have to put in order to earn it, young kids don't even have the basic concept that money is finite, that you earn it on a monthly basis, that you have to pay the bills first and foremost, that you have to have enough to buy food throughout entire month until next paycheck and so on. Because schools? They are the part of the same system that wants you to be this mindless worker, lemming stuck in debts hence being prone to exploiting, overhours etc., that's exactly what every country wants, not a crowd of smart people who are aware of their rights and willing to stand for them, because the dumber the population the better, easier to control.

 

[Star-Lord]

$100K is £72.5K, and they reckon that's living paycheck to paycheck?

Jesus fucking Christ.

 

[MikeM]

Making $100k on your own doesn't get you a home where I live in Canada. You need to make $125k with an average cost of $618k of a home. Imagine including the costs of daycare and everything else?

This isn't a problem of lifestyle creep for most millennial $100k+ earners (at least here). Its that the cost of housing has essentially doubled alone in 5 years.

 

[Amory]

I predict a large upset in the root cause of this problem at some point in the next 10-20 years; centralization. The main reason the spending habits of young high-earners are so out of control is that they have up until now all been forced to live relatively centrally, with all the spending pressures (cultrually and practically) that entials. With working from home now being more popular and possible than ever, a lot more people are going to move back into rural areas, and some (like me) will even chose to work completely remotely and move to low cost countries while maintainting contracts/clients in high-earning countries. Inner cities are going to see a wealth exodus leaving expensive apartments complexes, townhouses, and villas empty until the housing market adjusts and drastically lowers costs (which will probably cause another housing crash for the banks).

I think the great city exodus in the wake of the pandemic has been overstated. There's a lot of reasons beyond "living where you work" that make city living desirable, especially for young professionals, despite the expense.

Cities are the major hubs for commerce, education, medical care, culture, entertainment, etc. You can't just decentralize all of that with more flexible work from home policies. And even if you could, I don't think a lot of people would want to.

 

[Sabotage]

They're making like $50 an hour and thats not enough?

 

[Punished Miku]

If $100K isn't enough I suggest they drop their wife or girlfriend.

Either one.

Or get one with a decent job.

 

[StreetsofBeige]

Today's reminder that $100k a year today is the same as $50k a year in 1990 due to the ravages of inflation.

What I'm saying is that $100k a year isn't a lot anymore, especially in the Tier 1 cities like NYC and LA where you are literally paying $2500 a month just on rent.

$100k is probably about $70k after taxes. Take off $30k for rent (12 x $2500), and someone has net money of $40k ($3,333 per month) to spend on everything not rent related. Sounds like plenty to me.

 

[StreetsofBeige]

I think the great city exodus in the wake of the pandemic has been overstated. There's a lot of reasons beyond "living where you work" that make city living desirable, especially for young professionals, despite the expense.

Cities are the major hubs for commerce, education, medical care, culture, entertainment, etc. You can't just decentralize all of that with more flexible work from home policies. And even if you could, I don't think a lot of people would want to.

Small sample size of me, but during the past covid year and a half, I know 3 people whove moved from the burbs to a city farther away. But since it's now WFH, they are fine and dont care if the office calls them for occasional commutes. So not even downtowners are taking advantage of WFH.

These people are all 40+ years old. They arent the types of people craving downtown weekend activities.

They simply took advantage of WFH and got a bigger place for the same money they cashed out from.

 

[StreetsofBeige]

Making $100k on your own doesn't get you a home where I live in Canada. You need to make $125k with an average cost of $618k of a home. Imagine including the costs of daycare and everything else?

This isn't a problem of lifestyle creep for most millennial $100k+ earners (at least here). Its that the cost of housing has essentially doubled alone in 5 years.

Sure it does. Problem is everyone some reason bee-lines to Toronto and Vancouver and their surrounding metro areas so thats why prices keep zooming to around $1M.

Nobody says you have to live close to Toronto, Montreal or Vancouver. You can live farther away from the hubs, live in less popular provinces or buy condos or townhouses. Overall Canada prices are skewed high due to Vancouver and Toronto (high prices and tons of people). Prices are a bit outdated as it's last year, but close enough.

And these prices are a mix of dwellings. So whatever price is stated, a typical smaller home like a condo or townhome will be cheaper, while a big detached home will be the ones skewing it higher.

For you Yanks, the ballpark currency exchange into US dollars would be look at the prices below and take 80% of it.

Canadian House Prices – Living in Canada

www.livingin-canada.com

 

[Raven117]

In nyc, San Francisco, etc, yeah, not surprising.

anywhere else? Bad with finances

 

[Relativ9]

Small sample size of me, but during the past covid year and a half, I know 3 people whove moved from the burbs to a city farther away. But since it's now WFH, they are fine and dont care if the office calls them for occasional commutes. So not even downtowners are taking advantage of WFH.

These people are all 40+ years old. They arent the types of people craving downtown weekend activities.

They simply took advantage of WFH and got a bigger place for the same money they cashed out from.

Exactly this, a lot of people will be doing that, and they are the kind of people that can actually afford these larger apartments and townhouses in big cities. And then on the flip side you have the growing gig/freelancer lifestyle amoung younger people, and they usually also don't want to live very centrally, prefering to instead live closer to nature, have actual land, and work remotly. I don't think it will take much more of this development for us to start seeing an domino effect in the housing market.

 

[Reizo Ryuu]

The US sounds completely fucked if 100k isn't considered a lot. I don't make anywhere near that, not even close, but live a pretty comfortable stress free life in a major capitol city, in western europe.
If I'd be making ~100k€, I'd be ballin' out of control lol.

 

[StreetsofBeige]

In nyc, San Francisco, etc, yeah, not surprising.

anywhere else? Bad with finances

The biggest reason why home prices go up is simply demand and salaries outstripping supply. If the typical person who cringes at metro areas with huge prices, then dont complain, move to another place. Not every person in the US and Canada lives in Toronto, Vancouver, NYC or California. Are there tons of good jobs there? Yup. But that comes with high priced homes. Cant have it both ways where everyone makes good coin, but somehow home prices are dirt cheap like Idaho or Nova Scotia.

If someone cant afford it, but MUST have a nice family home, then you might have no choice now but to move to a mid tier city or the boonies like Sault Ste Marie. The major hubs arent meant for them.

 

[Raven117]

The biggest reason why home prices go up is simply demand and salaries outstripping supply. If the typical person who cringes at metro areas with huge prices, then dont complain, move to another place. Not every person in the US and Canada lives in Toronto, Vancouver, NYC or California. Are there tons of good jobs there? Yup. But that comes with high priced homes. Cant have it both ways where everyone makes good coin, but somehow home prices are dirt cheap like Idaho or Nova Scotia.

If someone cant afford it, but MUST have a nice family home, then you might have no choice now but to move to a mid tier city or the boonies like Sault Ste Marie. The major hubs arent meant for them.

Don't disagree at all.

(Or just move to Texas....but don't tell anyone).

 

[StreetsofBeige]

Don't disagree at all.

(Or just move to Texas....but don't tell anyone).

I've been to Texas once for my old job for a multi day business meeting. All I remember was:

- We were somewhere around Plano or Dallas
- Super nice people
- Every plot of land (like homes along the highway!?!) were giant
- Rain must be an issue there combined with heat because most grass I saw was dried up and brown
- Our company fun dinner was a BBQ place. I tried googling it and it's either Daves or Rudys. I dont know. But we pulled up to what looked like a converted gas station into a BBQ restaurant. What the fuck did we all drive up to? There must had been 50 of us. We walk in and its troughs of ice with beers. I dont know how mainstream or shitty these places are to locals, but it was fucking awesome. Never seen this kind of place before as Toronto we have shit all BBQ joints except for a handful or recent boutique BBQ joints that have cropped up over the years and are a rip off.

 

[Raven117]

I've been to Texas once for my old job for a multi day business meeting. All I remember was:

- We were somewhere around Plano or Dallas
- Super nice people
- Every plot of land (like homes along the highway!?!) were giant
- Rain must be an issue there combined with heat because most grass I saw was dried up and brown
- Our company fun dinner was a BBQ place. I tried googling it and it's either Daves or Rudys. I dont know. But we pulled up to what looked like a converted gas station into a BBQ restaurant. What the fuck did we all drive up to? There must had been 50 of us. We walk in and its troughs of ice with beers. I dont know how mainstream or shitty these places are to locals, but it was fucking awesome. Never seen this kind of place before as Toronto we have shit all BBQ joints except for a handful or recent boutique BBQ joints that have cropped up over the years and are a rip off.

Sounds like Plano.
Yeah, and that plot of land (especially out in the suburbs) was much cheaper than you were thinking it might be.
You must have been there in dead summer or dead winter. It can get dry though.
Sounds like Rudy's to me (its a local chain). Certainly not bad for a quick breakfast taco or brisket sandwich. (But you can get way more "designer stuff")

Glad you at least somewhat enjoyed your visit!

 

[TransTrender]

 

[Razvedka]

And go where? To Nebraska and make like $30K a year for the same job?

Most good paying jobs aren't in non major cities

You can make an awful lot of solid money in Nebraska man.

Silicon Prairie life.

 

[It's all in the wrist]

They need to move and commute to work. Anyone living in the city is paying a huge premium for it.

Is it fun for me to drive an hour every day? No. But I'm paying significantly less for a house that I will own soon.

 

[StreetsofBeige]

They need to move and commute to work. Anyone living in the city is paying a huge premium for it.

Is it fun for me to drive an hour every day? No. But I'm paying significantly less for a house that I will own soon.

Totally.

Downtowns dont even have all the good jobs, nor all job sectors. Anything paying great and blue collar/technician will hardly ever be downtown. The jobs you get in the core are typically high paid white collar jobs which companies MIGHT skew to downtown. And pending the metro area, not all giant head offices are even in the expensive parts of town since even they know it's cheaper to put head office in the burbs. The jobs that skew to expensive downtown are traditional skyscraper/legacy kinds of sectors like banking head offices, ad agencies always seem to be downtown, law office head offices, media, and tech startups somehow always seem to have enough money to have offices in expensive parts of town when they should be in the half priced burbs etc....

I've worked at 4 Canadian head offices in the Toronto metro area and not one of them was anywhere close to downtown.

Just about every metro area has good transit where you can get to those downtown jobs. And if it doesn't or arent near a subway or GO Train line, then suck it up and commute. I've been a big commuter before. But it comes down to city life and having that lifestyle of hanging out everyday after work on patios eating at restaurants or clubbing later that night. If someone wants to do that and doesn't want to commute, then ya live downtown (or close to it) and pay a premium.

If someone wants the cool fast life, then it makes sense to pay the fast bucks because lots of people want that.

Whats even funnier is that expensive housing usually skews to the core and it's often a one way street where people are talking about people working downtown, so they (for sake of dying from commuting) force themselves to live close to downtown where their job is. Ok, maybe for these people they got to do that.

But what about all the people who work at suburban head offices like me and commute a long distance FROM expensive downtown to the burbs? But in that situation they are choosing to live in the expensive parts though their job is 45 minutes away doing a reverse commute. Don't blame anyone else. You can find a cheaper place in the burbs to match the location of your job.

 

[StreetsofBeige]

Sounds like Plano.
Yeah, and that plot of land (especially out in the suburbs) was much cheaper than you were thinking it might be.
You must have been there in dead summer or dead winter. It can get dry though.
Sounds like Rudy's to me (its a local chain). Certainly not bad for a quick breakfast taco or brisket sandwich. (But you can get way more "designer stuff")

Glad you at least somewhat enjoyed your visit!

Googling it, it's got to be Rudy's. A bunch of them are red with a gas station and thats what it was like. Not sure which location as there's two not far (and about equal distance) from the office I went to.

 

[Raven117]

Googling it, it's got to be Rudy's. A bunch of them are red with a gas station and thats what it was like. Not sure which location as there's two not far (and about equal distance) from the office I went to.

Not a damn thing wrong with Rudy’s! Had it last weekend. Great breakfast tacos. But that said, if you ever get back down to Texas, I have some bbq recommendations that will knock your socks off.

 

[MikeM]

Sure it does. Problem is everyone some reason bee-lines to Toronto and Vancouver and their surrounding metro areas so thats why prices keep zooming to around $1M.

Nobody says you have to live close to Toronto, Montreal or Vancouver. You can live farther away from the hubs, live in less popular provinces or buy condos or townhouses. Overall Canada prices are skewed high due to Vancouver and Toronto (high prices and tons of people). Prices are a bit outdated as it's last year, but close enough.

And these prices are a mix of dwellings. So whatever price is stated, a typical smaller home like a condo or townhome will be cheaper, while a big detached home will be the ones skewing it higher.

For you Yanks, the ballpark currency exchange into US dollars would be look at the prices below and take 80% of it.

Canadian House Prices – Living in Canada

www.livingin-canada.com

I'm in the fringes of Ottawa. Bought my townhome for $370k 5 years ago. Now its apparently worth $720k. Singles in my neighbourhood are going for $1m+. This is not isolated to Toronto, Vancouver or Montreal. Hell, PEI's house prices have increased 33.5% year over year. This is a huge problem nationwide that needs serious addressing.

 

[Star-Lord]

It's scary how similar that is to my monthly bank statement.

 

[Mihos]

Me and my wife were cash poor until maybe our mid to late 30s.... But in our mid 40s, the kids moved out, house was paid off, and earlier investments started to pay off.

I don't think that is what is happening here, though.

 

[StormCell]

We've said this at least a dozen times in this thread. It's a combination of things one of which is that $100K isn't what it used to be. Six figures sounds rich but it's really right on the cusp.

Personally, that's in the neighborhood of what I earn and we don't currently have a second stream of income. We have everything we need, but occasionally we have to burn our savings to cover some big unexpected expenses. We then spend several months rebuilding it only to knock it out again. We budget. We know where a lot of our money goes (usually eating out at dine-in restaurants) when we're not covering big unexpected expenses.

So we know we can trim some fat from our expenses. We have plenty of money to buy "toys." But even if we did save instead of buying toys and eating out, there's this feeling that it would just get eaten up by other expenses. We have a long list of things that need to get done eventually. Some of it is home and landscape. Some of it is repair. There will always be plenty of things needing your money, gaf. You will always have more things to throw money at.

 

[StreetsofBeige]

I'm in the fringes of Ottawa. Bought my townhome for $370k 5 years ago. Now its apparently worth $720k. Singles in my neighbourhood are going for $1m+. This is not isolated to Toronto, Vancouver or Montreal. Hell, PEI's house prices have increased 33.5% year over year. This is a huge problem nationwide that needs serious addressing.

And the PEI number posted was from here where the avg price of a home lately is $370k. Thats an average. So some less, some more. You'll get some homes in the $200s and some in the $500s etc.... That is totally affordable. If someone cant afford a home at $300-400-ish with interest rates at 1.5 - 2%, then you got to downgrade to a small home or condo at $250k in PEI. And if someone cant afford a bottom of the barrel place at $250k, then that person is a renter.

Prince Edward Island Real Estate Association | CREA Statistics

creastats.crea.ca

As for affordability, prices go up over time. Everyone panicking stuff is unaffordable cant be right because people are buying stuff like crazy. So money is out there. And mortgages are being approved. Its just that SOME people dont have the money. Thats the way it goes in life. Not everyone is meant to buy a Mercedes or even a middle of the road base model Camry. Some people can only afford a used Toyota Corolla. And some people can only afford public transit.

Will things level out at some point? Probably. But every few years it's the same thing.... unaffordable. But people still keep buying.

As many of us have said, best way to make money is real estate if you get in early. You basically doubled your asset value yourself because I'm going to assume you scraped up some money, saved and took the dip into home ownership with a mortgage and being reasonable with spending habits. Unless someone makes doctor/lawyer money or an old geezer already set to retire and has money to burn, few people are giant spenders when they got a mortgage.

As an option, what you could had done is forget about owning, but instead rent an expensive unit (whats the hot area in Ottawa? Byward Market area?), buy a BMW, be broke, and you can only rent as no bank will give you a mortgage as you'll never save enough money to put down a down payment.

You did the right thing owning.

 

[Raven117]

There really are two diverging paths to invest when you are younger. Save for a down payment on a house or put that money in investments in the market.

It comes down on your life situation of what you need to do. But if you are young, single, and relatively frugal, you should be dumping money in an investment account. Let life circumstance dictate when to buy a home.

(unless you are a real estate investor, but that’s different).

 

[StormCell]

And the PEI number posted was from here where the avg price of a home lately is $370k. Thats an average. So some less, some more. You'll get some homes in the $200s and some in the $500s etc.... That is totally affordable. If someone cant afford a home at $300-400-ish with interest rates at 1.5 - 2%, then you got to downgrade to a small home or condo at $250k in PEI. And if someone cant afford a bottom of the barrel place at $250k, then that person is a renter.

Prince Edward Island Real Estate Association | CREA Statistics

creastats.crea.ca

As for affordability, prices go up over time. Everyone panicking stuff is unaffordable cant be right because people are buying stuff like crazy. So money is out there. And mortgages are being approved. Its just that SOME people dont have the money. Thats the way it goes in life. Not everyone is meant to buy a Mercedes or even a middle of the road base model Camry. Some people can only afford a used Toyota Corolla. And some people can only afford public transit.

It isn't always so simple. The US had a housing bubble pop that sent the nation into a huge recession. While the bubble was growing, things seemed great. People were selling their houses at prices 2x and 3x what they originally paid. There were a lot of first generation college graduates starting their careers and beginning to earn salaries beyond anything they ever saw their parents make. While all this was happening a curious thing began to occur. Banks were giving out home loans. Crazy home loans. People earning $60K could suddenly afford a $300K house. Couples earning $120K could suddenly swing a home loan on a $500K. As long as the banks kept lending, people who even had no business being given home loans could suddenly buy a $200K house even though (and even if) they never had any hope of repaying the loan.

That's when the bubble popped. People began struggling to pay off their mortgages. Banks were being forced to foreclose. The banks began taking losses as housing prices spiraled. Even people who were paying down their mortgages saw their equity vanish as they went completely upside down in their loans. Others were forced to sell their homes at a loss just to pay down their mortgages and attempt to refinance to reduce their payments -- basically they no longer even own the house they're still paying off.

It's always best to remember that what goes up can come back down. Housing prices are up all across the US and CA, but then so was the price of lumber and new builds. Lumber has come back down, and so will the cost of new builds hopefully. When that happens, housing prices may begin to relax a bit. At least we can hope for this, because it's never good when housing prices are too high. No one wins when home ownership is basically unattainable.

 

[raduque]

- Our company fun dinner was a BBQ place. I tried googling it and it's either Daves or Rudys. I dont know. But we pulled up to what looked like a converted gas station into a BBQ restaurant. What the fuck did we all drive up to? There must had been 50 of us. We walk in and its troughs of ice with beers.

It's a Rudy's, they're actually built like that. Had a new one come up in my home town around 7-8 years back and they put up the awning and islands and everything. I think they actually sell gas now too.

 

[StreetsofBeige]

It isn't always so simple. The US had a housing bubble pop that sent the nation into a huge recession. While the bubble was growing, things seemed great. People were selling their houses at prices 2x and 3x what they originally paid. There were a lot of first generation college graduates starting their careers and beginning to earn salaries beyond anything they ever saw their parents make. While all this was happening a curious thing began to occur. Banks were giving out home loans. Crazy home loans. People earning $60K could suddenly afford a $300K house. Couples earning $120K could suddenly swing a home loan on a $500K. As long as the banks kept lending, people who even had no business being given home loans could suddenly buy a $200K house even though (and even if) they never had any hope of repaying the loan.

That's when the bubble popped. People began struggling to pay off their mortgages. Banks were being forced to foreclose. The banks began taking losses as housing prices spiraled. Even people who were paying down their mortgages saw their equity vanish as they went completely upside down in their loans. Others were forced to sell their homes at a loss just to pay down their mortgages and attempt to refinance to reduce their payments -- basically they no longer even own the house they're still paying off.

It's always best to remember that what goes up can come back down. Housing prices are up all across the US and CA, but then so was the price of lumber and new builds. Lumber has come back down, and so will the cost of new builds hopefully. When that happens, housing prices may begin to relax a bit. At least we can hope for this, because it's never good when housing prices are too high. No one wins when home ownership is basically unattainable.

Agreed, but Canada now has a stress test on mortgages which is 5.25%. Doesn't matter if the real interest rate approved is 1.7%. The qualification is based off 5.25%.

If someone gets approved at 5.25% and loses their job, thats on them. That can happen in any era. Thats actually what mortgage insurance is for, which probably zero people apply for because they dont want to pay an extra $20/mth. Every mortgage application, they'll promote various shit on top of the mortgage but I bet most people throw that in the garbage because most people assume they can float a mortgage no problem forever.

For people new to owning and scraping by, I'd suggest buy it. For older people with more money and doesnt care if they get fired, they dont need it. They got enough money to pay off things while looking for a new job.

Home prices have gone up forever, but the real spike was probably the past 10 years (big spike past 5-6 years).

Appreciating home prices actually help every owner. It's the people looking to buy who get hurt. BUT, the biggest home price appreciation are metro areas. You can still find totally affordable places to live in other cities or even in a metro area assuming you can live in a small condo.

Times have changed. It seemed easier 30+ years ago when everyone's parent could buy a nice big house for $220,000 (but at an 8% mortgage). That house is probably $1M minimum now (at 2% mortgage rates). In modern era, that house is out of scope for the typical family looking for a place to live. But there are still alternatives.

It comes down to how much and how hard someone wants to live in the expensive parts of town.

 

[Self High Five]

Sounds right for many peers I know making $100k+. And some in their 40s already.

- Still renting a condo in or close to downtown
- Still half broke

On the plus side, they got awesome vacation stories twice year, know the Starbucks menu by heart, and got a sweet BMW or Mercedes at $1000/mth. People in their late 20s or 30s have a better car in the parking lot than some directors and VP. Go figure.

And some of them complain about cost of buying a home! LOLOLOL

Well, if you retards bought a place 10-20 years ago the rest of us did, you'd be rolling probably a good $500k - $1M home equity due to price appreciation doing nothing but sitting on your ass and letting people do bidding wars. Some people I know who bought a home 15 years ago for maybe $400k (ohhhh... that was so much back then), is now worth $1.5M. A good buddy of mine bought a place 10 years ago for $800k. Worth over $2M now.

You snooze you lose live for the day renters.

20 years ago the oldest millennials were just getting out of college, the youngest were still in middle school....

Outside of baby boomers who are just about to retire with no mortgage debt, the price appreciation out of your primary residence doesn't mean much.

Are you going to sell and go back to renting?
Downsize while still needing more space for a growing family?
Buy a cheaper house in a rural town? (will do wonders for your career)
Buy a better place around the same area? (while it appreciated at the same rate as your current place)
Refinance your mortgage? (yay more debt)

Well, if you retards bought a place 10-20 years ago the rest of us did, you'd be rolling probably a good $500k - $1M home equity due to price appreciation doing nothing but sitting on your ass and letting people do bidding wars.

And then what? Are you going to rent after you sell or become one of those retards and start bidding on a new home? You realize that you still need to keep a roof over your head? People who take self worth out of the financial value of a primary residence are weird.

 

[manfestival]

The US sounds completely fucked if 100k isn't considered a lot. I don't make anywhere near that, not even close, but live a pretty comfortable stress free life in a major capitol city, in western europe.
If I'd be making ~100k€, I'd be ballin' out of control lol.

It isn't so much that it isn't considered a lot. Since relativism is very important in this respect. The vast majority do not make 100k. Lifestyle + location are very important to whether 100k is the difference between doing amazing and doing bad. I live in Florida and I live fine at sub 100k. However, if I was making 100k I wouldn't change much of anything except maybe get a new car. The rest would be a ton of extra money.

 

[kevm3]

Why is this surprising? People that earn 100k are most likely living in big cities and they don't want to live like a pauper. Getting a decent house in an 'affordable' big city is going to be 400 to 500k. An expensive city, it'll probably be hovering around a million dollars. Scaling home insurance/property taxes go with that.
Then you have car payments, registration, insurance, cable/internet, heating, water, gym memberships, insurance if your job doesn't provide it, food, clothes, etc. Then you might have to drop money on 'emergency expenses' such as car repairs. Car maintenance is there as well. If you have a new home, you have to buy furniture to furnish it. If you have a long commute to work, fuel costs and possible toll roads.

I forgot to mention massive student loans for a lot of people, and immense daycare costs. Don't even bother having a chronic medical condition.

 

[kevm3]

20 years ago the oldest millennials were just getting out of college, the youngest were still in middle school....

Outside of baby boomers who are just about to retire with no mortgage debt, the price appreciation out of your primary residence doesn't mean much.

Are you going to sell and go back to renting?
Downsize while still needing more space for a growing family?
Buy a cheaper house in a rural town? (will do wonders for your career)
Buy a better place around the same area? (while it appreciated at the same rate as your current place)
Refinance your mortgage? (yay more debt)


And then what? Are you going to rent after you sell or become one of those retards and start bidding on a new home? You realize that you still need to keep a roof over your head? People who take self worth out of the financial value of a primary residence are weird.

Exactly. If they are staying in that house, then all of that equity is essentially meaningless aside from paying higher property taxes. You move to another house in the same area or a similar area, and the prices have skyrocketed there as well. You only really get ahead if you sell and move to some lower cost area, such as moving from a big city to the suburbs or the country, in which case your standard of living is lowered and potentially your career prospects as well, unless you are working remote jobs only.

 

[StreetsofBeige]

20 years ago the oldest millennials were just getting out of college, the youngest were still in middle school....

Outside of baby boomers who are just about to retire with no mortgage debt, the price appreciation out of your primary residence doesn't mean much.

Are you going to sell and go back to renting?
Downsize while still needing more space for a growing family?
Buy a cheaper house in a rural town? (will do wonders for your career)
Buy a better place around the same area? (while it appreciated at the same rate as your current place)
Refinance your mortgage? (yay more debt)


And then what? Are you going to rent after you sell or become one of those retards and start bidding on a new home? You realize that you still need to keep a roof over your head? People who take self worth out of the financial value of a primary residence are weird.

It's called banking asset value so later in life you downsize or move to another city and bank it. Why do you think so many smaller towns have old people in it? You dont even have to move away. Just move from the core to the burbs and bank half a million cash. Or downsize. I don't think the typical retired grannies need a big family home anymore when they're 72 years old.

So what you're telling me is if someone gave you $500,000 - $1M in asset profits, but it's locked up for now till your 60 when you can cash it in, you're still going to say no?

You'd rather be 60 with no giant asset value accruing in the background?

It's like buying stocks and letting it accrue for 20 years. Technically your bank account hasn't grown one dollar because you havent sold. Doesn't mean its worth zero.

Also, having home equity appreciate allows you to take out loans easier as you got collateral. A guy with $0 in the bank but $500,000 in home equity is much more well off than a guy with $0 in the bank and $0 home equity.

No doubt you're broke and have no idea how to make money.

 

[jufonuk]

Live within your means.

 

[StreetsofBeige]

Exactly. If they are staying in that house, then all of that equity is essentially meaningless aside from paying higher property taxes. You move to another house in the same area or a similar area, and the prices have skyrocketed there as well. You only really get ahead if you sell and move to some lower cost area, such as moving from a big city to the suburbs or the country, in which case your standard of living is lowered and potentially your career prospects as well, unless you are working remote jobs only.

You do realize people most people who make a bunch of money, it comes from investments (stocks and home appreciation). People arent getting rich blowing their money on rent and trying to scrimp and save money every month and pooling that into a pile after 40 years of work.

When you got investments, your assets can zoom up fast.

 

[StreetsofBeige]

It isn't so much that it isn't considered a lot. Since relativism is very important in this respect. The vast majority do not make 100k. Lifestyle + location are very important to whether 100k is the difference between doing amazing and doing bad. I live in Florida and I live fine at sub 100k. However, if I was making 100k I wouldn't change much of anything except maybe get a new car. The rest would be a ton of extra money.

Exactly. And thats the right way to live IMO.

Now if someone wants to live pay cheque to pay cheque at $100k+ salaries thats on them. Their choice how to spend. The money is being eaten up too much no matter what the reasons are.

 

[Raven117]

20 years ago the oldest millennials were just getting out of college, the youngest were still in middle school....

Outside of baby boomers who are just about to retire with no mortgage debt, the price appreciation out of your primary residence doesn't mean much.

Are you going to sell and go back to renting?
Downsize while still needing more space for a growing family?
Buy a cheaper house in a rural town? (will do wonders for your career)
Buy a better place around the same area? (while it appreciated at the same rate as your current place)
Refinance your mortgage? (yay more debt)


And then what? Are you going to rent after you sell or become one of those retards and start bidding on a new home? You realize that you still need to keep a roof over your head? People who take self worth out of the financial value of a primary residence are weird.

Certainly things to consider, but thats too far the other way.

A home mortgage is a very cheap form of leverage. You can control a valuable asset for a little actual money.

It was explained very simply to me by a financial advisor:

Me: Should I buy a house?
FA: Do you want/need a house?
Me: Not really. Its just me.
FA: How much do you spend on rent?
Me: Not much compared to what I make.
FA: Buy a house when you can utilize the asset (ie, need the space for a family or if you just want one and would enjoy it) . Otherwise, keep doing what you are doing (investing a large amount of what I make).

In the end, just don't "do nothing." If you are young, a little bit goes a freakin long way by retirement age. Its all about long term goals. Slow and stead wins the race.