Millionaire tells millennials: if you want a house, stop buying avocado toast

[TV and credit cards]

Where did this go? How'd it get to near minimum wage people trying to crack the high end housing markets?
The working poor will remain such even if in the US they are all given a bump to $15 an hour. $25 an hour will just support your modest life and modest family in your modest house and for those little $500 to $1000 dollar emergencies that come up, and they always come up, momma better be working part time.

Average wage for a starting professional, I thought was about $55k a year.

Lastly, people do not spend in accordance with their income, they spend in accordance with their social class. This is why whether a person is making $70k a year or $160k a year, most have little if any savings.

 

[braces_for_impact]

Doing without luxury cars and clothes doesn't mean living like a peasant. Nice strawman with the welfare recipients buying mansions and yachts, too. And this is not, or at least shouldn't be, about right wingers or left wingers. Its living within your means and, yes, making some sacrifices along the way. Isn't that what we teach our children? Don't spend all your allowance the first day on candy and then come whining back to mommy for more money? Although with all the entitled little brats running around these days, maybe that is the modus operandi with parenting today.

On the other hand, if you are the type of person who just has to keep with the Joneses, be always fashionable and trendy and eat at fancy restaurants all the time, but has a pretty modest salary there is probably no hope that you will ever find your self financially stable and independent.

Exactly. It's amazing how much you save by careful spending.

There are zero luxury products in our house.

That depends on what you call a "luxury".

If only we were all paragons of virtuous thrift like yourself. How did you get that way anyway? Do you think it was the way you were raised, or is it just in your genes, or both?

 

[Crazy Eddie]

They do, however, have connections and resources that give them opportunities they wouldn't have had in their home countries, which is part of the reason they decide to emigrate in the first place. An immigrant moving to a new country knowing nothing whatsoever about their new community, where to find jobs, where to find training, where to look for housing or how to search for or obtain a line of credit, is worse off than a homeless person (at least homeless people have social security numbers and can submit to a background check if they actually get hired somewhere).

Virtually all non-H1-B immigrants are family sponsored. Thus they have the connection of generally a middle class American.

That's exactly my point: poor people in America DON'T have middle class connections. Alot of those immigrants are actually entering the country in a better economic position than people who have been living here for generations.

Family member--says nothing about their job prospects other than that the family member has evaluated them and figured they are going to do ok here. (Said family member has to sign a pretty draconian financial support document.)

You can split that hair if you want, but we both know you're bullshitting. NOBODY is going to sponsor a family member's immigration to America unless they have a better-than-not chance of helping that person find work. In the case of many immigrants, it's because the sponsor of that immigrant actually OWNS a business himself (convenience store franchises and gas stations are famous for this).

And that's not a big head start. Most people setting out from home have time to find the same things.

Many -- though not most -- MIDDLE CLASS people setting out from home can find that. Sponsorship is a huge economic boost to someone who has otherwise no social or financial capitol of their own.

But who is investing in you and helping you get your start when you don't actually KNOW anyone willing to hire you? The most vulnerable economic position for workers is that of an entry-level employee trying to get a job from strangers. And that, mind you, is the much-lamented trap that many college graduates and millenials are pointing out:

"No one will hire me because I have no experience, and I have no experience because no one will hire me." People whose families have business connections or own small businesses of their own do not have this problem, and as far as I know the only OTHER way out of that Catch-22 is to join the military.

I was thinking more of the data portion of it. You can get minimal phone service for a lot less than a typical cell bill.

Data plans don't cost that much more, and are versatile enough -- and for some jobs, important enough -- to be considered an essential service. Streaming services like Netflix and Amazon aren't that expensive either, maybe $30 a month combined...

Oh wait, you were about to tell me that poor people remain poor because they spend all their money on Wifi and Game of Thrones marathons?

 

[Crazy Eddie]

What professional job pays only $25k??? Why would you go to to school for a position like that?

Do you have ANY IDEA how many college graduates have asked me that very same fucking question? Except they're usually crying.

A cousin of mine graduated from U-Mich last year with an electrical engineering degree. He started work with a company in Saint Paul as a field services technician. They offered him 40 hours a week at $15/hr, then a month later they cut his hours to 34 hours a week. Do the math: interestingly, he still makes more than an entry-level paramedic, who around these parts starts at around $22,000 a year.

Do you know what most first year medical resident make working 70 to 90 hours a week? If you guessed "more than $50,000" you'd be wrong.

You are painting a very poor picture of the actual labor market.

The actual labor market doesn't support a living wage for the majority of workers and hasn't even come close for over two decades. The only thing offsetting this so far has been the availability of CREDIT, which is why standard of living remains relatively stable while CONSUMER DEBT has skyrocketted to trillions of dollars.

So poor people and even most of the middle class isn't actually SAVING money at all. They're actually BORROWING money at fantastic rates because they literally don't have the income to sustain their lives. Ironically, about a decade ago enough people figured out that you can do both at the same time: pay for all of your living expenses on credit while also saving as much of your income as you possibly could for later, then retire and/or declare bankruptcy. That was before they changed the bankruptcy laws to make it harder for poor people to discharge their debts and IMPOSSIBLE to discharge student loan debts.

 

[Crazy Eddie]

Average wage for a starting professional, I thought was about $55k a year.

Only when "professional" is very narrowly defined. E.G. lawyers, managers, investment bankers, accountants.

Come to think of it, people whose jobs involve handling other people's money tend to have pretty high starting salaries. I suppose this is because hiring a poor person to handle your money is like asking a dog to guard your sandwich.

Lastly, people do not spend in accordance with their income, they spend in accordance with their social class. This is why whether a person is making $70k a year or $160k a year, most have little if any savings.

True, but people who are making $160k a year can afford to be ALOT more careless than people who are only making $16k. A man making six figures might get t-boned in an intersection and then have to pay $8000 worth of repairs to his car (while spending $500 on a rental car for a week). The guy making $16k... well, he no longer has a car (or possibly a JOB, depending on how far he has to commute).

 

[dismal]

Do you have ANY IDEA how many college graduates have asked me that very same fucking question? Except they're usually crying.

A cousin of mine graduated from U-Mich last year with an electrical engineering degree. He started work with a company in Saint Paul as a field services technician. They offered him 40 hours a week at $15/hr, then a month later they cut his hours to 34 hours a week. Do the math: interestingly, he still makes more than an entry-level paramedic, who around these parts starts at around $22,000 a year.

Do you know what most first year medical resident make working 70 to 90 hours a week? If you guessed "more than $50,000" you'd be wrong.

You are painting a very poor picture of the actual labor market.

The actual labor market doesn't support a living wage for the majority of workers and hasn't even come close for over two decades. The only thing offsetting this so far has been the availability of CREDIT, which is why standard of living remains relatively stable while CONSUMER DEBT has skyrocketted to trillions of dollars.

So poor people and even most of the middle class isn't actually SAVING money at all. They're actually BORROWING money at fantastic rates because they literally don't have the income to sustain their lives. Ironically, about a decade ago enough people figured out that you can do both at the same time: pay for all of your living expenses on credit while also saving as much of your income as you possibly could for later, then retire and/or declare bankruptcy. That was before they changed the bankruptcy laws to make it harder for poor people to discharge their debts and IMPOSSIBLE to discharge student loan debts.

This may sound crazy and stuff, but it seems like there should be some relationship between housing prices and people's ability to pay for housing.

We should perhaps be careful to extend anecdotes that show "some individuals cannot afford housing" to the conclusion that "no one can afford housing" because, given a relatively large amount of existing housing stock, housing prices ought to fall to the level where people can afford to live in them.

For example, I'll bet there are are few documented cases of inherently "million dollar housing areas" that exist independently from there being people who can afford to pay a million dollars for a house.

 

[AthenaAwakened]

So if you live your existence mean and small, you can have a lot a money ...

... just not much of a life.

 

[Derec]

We should perhaps be careful to extend anecdotes that show "some individuals cannot afford housing" to the conclusion that "no one can afford housing"

"Nobody goes to Coney Island anymore... it's too crowded!"
-- Yogi Berra

 

[Derec]

So if you live your existence mean and small, you can have a lot a money ...
... just not much of a life.

I think it's about balance between short and long term gratification.
I agree that the "millionaire next door", people who die with a lot of money but never spent any of it, is not a way to go, but neither is spending money as quickly as you can earn it.

 

[whichphilosophy]

So if you live your existence mean and small, you can have a lot a money ...

... just not much of a life.

Rich people, especially those who are born rich offer lots of advice to poor people on how to live on nothing.

 

[TV and credit cards]

This may sound crazy and stuff, but it seems like there should be some relationship between housing prices and people's ability to pay for housing.

We should perhaps be careful to extend anecdotes that show "some individuals cannot afford housing" to the conclusion that "no one can afford housing" because, given a relatively large amount of existing housing stock, housing prices ought to fall to the level where people can afford to live in them.

For example, I'll bet there are are few documented cases of inherently "million dollar housing areas" that exist independently from there being people who can afford to pay a million dollars for a house.

Under normal conditions, there should be parity between home valuations and the rental market. If you buy a house with the intention of renting it out, you should realize about 10% profit per month. In some more desirable areas of the country, this can get out of wack in a hurry.
When housing valuations were in the toilet 2008 and beyond, deep pocket Wall St firms like Blackrock bought up single family homes around the country and turned them in to rentals. They reaped big profits because rents were abnormally higher than home valuations and now own about 50,000 homes that have largely bounced back in value. Winner, winner, chicken dinner for Blackrock. +tax advantage.

 

[Harry Bosch]

This may sound crazy and stuff, but it seems like there should be some relationship between housing prices and people's ability to pay for housing.

We should perhaps be careful to extend anecdotes that show "some individuals cannot afford housing" to the conclusion that "no one can afford housing" because, given a relatively large amount of existing housing stock, housing prices ought to fall to the level where people can afford to live in them.

For example, I'll bet there are are few documented cases of inherently "million dollar housing areas" that exist independently from there being people who can afford to pay a million dollars for a house.

Under normal conditions, there should be parity between home valuations and the rental market. If you buy a house with the intention of renting it out, you should realize about 10% profit per month. In some more desirable areas of the country, this can get out of wack in a hurry.
When housing valuations were in the toilet 2008 and beyond, deep pocket Wall St firms like Blackrock bought up single family homes around the country and turned them in to rentals. They reaped big profits because rents were abnormally higher than home valuations and now own about 50,000 homes that have largely bounced back in value. Winner, winner, chicken dinner for Blackrock. +tax advantage.

10% doesn't seem like enough to encourage people to invest in the rental market. I got out a long time ago, but was generating far more than 10%. A landlord has substantial costs that the renter doesn't bear: up/down market, maintenance, and etc. I had 6 rental houses at one time. I never felt safe until I had at least a year of rental payments socked aside.....

 

[ronburgundy]

Do you have ANY IDEA how many college graduates have asked me that very same fucking question? Except they're usually crying.

A cousin of mine graduated from U-Mich last year with an electrical engineering degree. He started work with a company in Saint Paul as a field services technician. They offered him 40 hours a week at $15/hr, then a month later they cut his hours to 34 hours a week. Do the math: interestingly, he still makes more than an entry-level paramedic, who around these parts starts at around $22,000 a year.

Do you know what most first year medical resident make working 70 to 90 hours a week? If you guessed "more than $50,000" you'd be wrong.



The actual labor market doesn't support a living wage for the majority of workers and hasn't even come close for over two decades. The only thing offsetting this so far has been the availability of CREDIT, which is why standard of living remains relatively stable while CONSUMER DEBT has skyrocketted to trillions of dollars.

So poor people and even most of the middle class isn't actually SAVING money at all. They're actually BORROWING money at fantastic rates because they literally don't have the income to sustain their lives. Ironically, about a decade ago enough people figured out that you can do both at the same time: pay for all of your living expenses on credit while also saving as much of your income as you possibly could for later, then retire and/or declare bankruptcy. That was before they changed the bankruptcy laws to make it harder for poor people to discharge their debts and IMPOSSIBLE to discharge student loan debts.

This may sound crazy and stuff, but it seems like there should be some relationship between housing prices and people's ability to pay for housing.

We should perhaps be careful to extend anecdotes that show "some individuals cannot afford housing" to the conclusion that "no one can afford housing" because, given a relatively large amount of existing housing stock, housing prices ought to fall to the level where people can afford to live in them.

For example, I'll bet there are are few documented cases of inherently "million dollar housing areas" that exist independently from there being people who can afford to pay a million dollars for a house.

You're adorably false theory completely ignores the fact that most housing is owned by a small % rich people, then rented to the majority. A very small % of people can afford just up and move to an area with cheaper housing. So, when people cannot afford to buy housing in their area, the housing prices do not simply fall to meet what most people can afford. Rather billionaires and major corporations buy up all the local real-estate and force everyone else to be renters. As more and more jobs become concentrated in fewer and few companies and thus geographic areas, then more and more people have no choice but to pay whatever rent the handful of billionaires who own everything decide to charge.

 

[braces_for_impact]

So if you live your existence mean and small, you can have a lot a money ...

... just not much of a life.

Rich people, especially those who are born rich offer lots of advice to poor people on how to live on nothing.

Not just advice. When you're poor, especially if you receive any kind of assistance, people feel pretty well damn entitled to tell you how you may spend it.

 

[LordKiran]

Under normal conditions, there should be parity between home valuations and the rental market. If you buy a house with the intention of renting it out, you should realize about 10% profit per month. In some more desirable areas of the country, this can get out of wack in a hurry.
When housing valuations were in the toilet 2008 and beyond, deep pocket Wall St firms like Blackrock bought up single family homes around the country and turned them in to rentals. They reaped big profits because rents were abnormally higher than home valuations and now own about 50,000 homes that have largely bounced back in value. Winner, winner, chicken dinner for Blackrock. +tax advantage.

10% doesn't seem like enough to encourage people to invest in the rental market. I got out a long time ago, but was generating far more than 10%. A landlord has substantial costs that the renter doesn't bear: up/down market, maintenance, and etc. I had 6 rental houses at one time. I never felt safe until I had at least a year of rental payments socked aside.....

Only six? there's your problem!

 

[iolo]

If you want to afford a house, go in for crime, or have rich parents. Meanwhile, what the hell is avocado toast?

 

[dismal]

This may sound crazy and stuff, but it seems like there should be some relationship between housing prices and people's ability to pay for housing.

We should perhaps be careful to extend anecdotes that show "some individuals cannot afford housing" to the conclusion that "no one can afford housing" because, given a relatively large amount of existing housing stock, housing prices ought to fall to the level where people can afford to live in them.

For example, I'll bet there are are few documented cases of inherently "million dollar housing areas" that exist independently from there being people who can afford to pay a million dollars for a house.

You're adorably false theory completely ignores the fact that most housing is owned by a small % rich people, then rented to the majority. A very small % of people can afford just up and move to an area with cheaper housing. So, when people cannot afford to buy housing in their area, the housing prices do not simply fall to meet what most people can afford. Rather billionaires and major corporations buy up all the local real-estate and force everyone else to be renters. As more and more jobs become concentrated in fewer and few companies and thus geographic areas, then more and more people have no choice but to pay whatever rent the handful of billionaires who own everything decide to charge.

Yeah, uh, no, you're wildly incorrect.

https://en.wikipedia.org/wiki/Home-ownership_in_the_United_States

 

[lpetrich]

Rich people, especially those who are born rich offer lots of advice to poor people on how to live on nothing.

Not just advice. When you're poor, especially if you receive any kind of assistance, people feel pretty well damn entitled to tell you how you may spend it.

Like what happened to blogger Greta Christina.

Bad news, good news, and asking for help - Greta Christina's Blog
Fashion Friday: Dressy Comfortable Shoes, and Thinking Outside the Box - Greta Christina's Blog
The Absurd Manufactured Shoe Controversy: A Brief Response - Greta Christina's Blog
No, You May Not Have Shoes (Update) - Almost Diamonds
In Defense of Greta Christina | Atheist Revolution

Back in 2012, when blogger Greta Christina was operated on for some cancer, she started a fundraiser to help herself out with some expenses. With that money, she bought a set of fancy shoes, because she had to wear something both dressy and comfortable for professional situations.

Some people were outraged at her decision, denouncing her for spending their money on something that they considered totally frivolous. GC offered to refund the donations of anyone who objected to what she spent the money on, but nobody accepted.

 

[braces_for_impact]

I had forgotten entirely about that, but it illustrates my point as nicely as trying to control every cent of what is spent on SNAP.

 

[TV and credit cards]

If you want to afford a house, go in for crime, or have rich parents. Meanwhile, what the hell is avocado toast?

Unidentified last post in the Foodie thread.
Or is that Gerbers Peas?