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from the would-you-like-fries-with-that? dept.
More than half of American millennials, the generation of people born between 1981 and 1996, believe that they will one day be millionaires; one in five think they will get there by the age of 40. These are the findings from a survey conducted in 2018 by TD Ameritrade, a financial-services company.
But a working paper by the Brookings Institution, a think-tank, offers a sobering antidote to this youthful optimism. It finds that millennials are less wealthy than people of a similar age were in any year from 1989 to 2007. The economic crisis of 2008-09 hit millennials particularly hard. Median household wealth in 2016 for 20- to 35-year-olds was about 25% lower than it was for the similar-aged cohort in 2007.
[...] But all is not lost. Millennials are living longer and are the best-educated generation in history. Taken together, this could yet mean that the youngest millennials, who have been less scarred by the crisis, could contribute towards their retirement pots for longer. Then there is mum and dad: even if they don’t become millionaires, millennials will one day inherit from their parents, and that may help redress their relative poverty.
(Score: 3, Insightful) by isostatic on Tuesday April 23 2019, @12:58PM (16 children)
Easy
If you want to be a millionaire, you should have bought a typical house back in 1996 on a 25 year interest only mortgage.
https://www.rightmove.co.uk/house-prices/detailMatching.html?prop=75946340&sale=9103366&country=england [rightmove.co.uk]
£158k back then would have been a stretch for people on average income at 8 times average salary, but now 30 years later that house is worth £1.8 million. Over the last 30 years you'll have paid about £200k in interest to live there. Sell the house, pay off the mortgage, and you're left with £1.6m
The poor sucker who couldn't find that £16k deposit in 1996 will likely have spent more on rent, and have £0 to show for it.
Boomers have made a fortune from the housing market over the last 30 years, and on the whole (at least in the UK) haven't been taxed a penny.
(Score: 2) by VLM on Tuesday April 23 2019, @01:07PM (7 children)
Factually true but don't forget 30 years of 3% property tax, at least one maybe two roofs (about one new car in cost), all major appliances at least twice, remodeling, extensive maint costs, etc.
At least in the US its hard to spend more than $30/month on utilities in an apartment unless you're mining bitcoin or growing weed, but just the gas bill alone starts at $300 in the winter. So there's ancillary expenses.
Yeah yeah your point in general stands but it might be more like 1M than 1.6M.
Houses are also very expensive in terms of time; apartment dwellers spend saturday "at the big game" or concert or party or whatever, home owners spend saturday doing peasant yard work or plunging toilets.
(Score: 2, Offtopic) by PiMuNu on Tuesday April 23 2019, @01:21PM (1 child)
In the UK tenants pay council tax and uitilities, which I guess is equivalent to US property tax. I think maintenance costs are orders of magnitude below the price growth in the UK (speaking as a homeowner). Typical rent prices are approximately the same as a mortgage payment, because rental market is driven by "buy to let" i.e. put down a mortgage, buy up a nice place, tenants pay off the mortgage. Landlord takes profit from natural house price growth.
UK is an interesting case because:
1. there is a significant population boom (driven significantly from 1st through 3rd generation immigrants).
2. housing stock is limited by government regulation - motivated by the desire to maintain rural environments.
3. UK doesn't have the same culture of apartment living that is common in e.g. Europe. Everyone wants to own a 3 bedroom semi detached house in the suburbs.
I believe that this has driven big price growth especially around London.
(Score: 2) by Dr Spin on Tuesday April 23 2019, @06:45PM
motivated by the desire to maintain rural environments.
No:
The conservatives want a housing shortage so house prices will rise and home owners will vote conservative
Labour want a housing shortage so people will vote Labour because they cant afford to buy and want social housing.
Other parties are irrelevant (UKIP wouldn't know a housing policy if it fell on them from 30,000 feet).
Warning: Opening your mouth may invalidate your brain!
(Score: 2) by isostatic on Tuesday April 23 2019, @01:25PM (4 children)
Factually true but don't forget 30 years of 3% property tax
Not in the UK. It would be 30 years of council tax, but you pay that whether you rent or own. £40k in total.
at least one maybe two roofs (about one new car in cost)
Not in the UK, I've never heard of roofs having to be replaced (except for thatched or flat ones). Occasional loose/cracked tile after a storm sure, and I expect they probably are after 100-150 years or so, vast majority of houses in UK are under 100 years old though.
all major appliances at least twice, remodeling, extensive maint costs, etc.
Aside from oven, fridge, maybe washer, those costs would be born by a rentee anyway. £200 a year, or £5k.
The cost of owning a house in the UK is negligable.
(Score: 0) by Anonymous Coward on Tuesday April 23 2019, @04:57PM
Houses in the US are covered with layers of flat asphalt shingles, some newer more expensive roofs are metal plate, some older expensive ones are slate shingles. European style tile is expensive unobtanium, unless you live out west.
The cheap regular asphalt roofs have a lifetime of maybe 20 years or so, and cost around $10k to redo. Most people don't plan on staying in the same home for 20 years, so that is what they install. When buying a house you ask when the previous owners replaced the roof, and you do a mental calculation of value for remaining expected life.
(Score: 2) by Nuke on Tuesday April 23 2019, @06:04PM (2 children)
Angling for "Funny" votes? I recently had my tile roof replaced costing £15k, probably about 80 years old. Replaced central heating boiler and hot water tank two years ago at £2500. Minor maintenance probably runs around £100 per month - like replacing fences recently that were blown down in the high winds. I own my house but these are things a landlord would need to do (I'm not sayiing they would).
(Score: 2) by Whoever on Wednesday April 24 2019, @03:11AM (1 child)
An 80 year old house? Hardly typical.
What type of tiles did you have on the roof? I know that slate roofs can take a lot of maintenance, but those are quite rare these days.
I own two houses in the UK and I don't pay anything like £100 per month for minor maintenance. Of course the houses are not mansions.
(Score: 2) by Nuke on Wednesday April 24 2019, @01:57PM
The roof was of tiles made from some clay/asbestos fired mix, slate-like but orange in colour, common enough for the time. The tiles were crumbling at the edges and infested with moss. As for 80 years old not being typical, there were millions of houses built in the 1920s and 30s, all those London middling boring suburbs 10-20 miles from the centre, for a start. Every house I have ever lived in has been from that era.
(Score: 5, Insightful) by driverless on Tuesday April 23 2019, @01:22PM (3 children)
Of course they do, they've been repeatedly told they'll be winning so much, at every level, they'll get tired of winning [youtube.com].
Come to think of it, after the current presidency comes to an end and the chickens come home to roost, everyone may well be millionaires, taking their weekly paycheck home in the form of a wheelbarrow full of money [wordpress.com]. Now that's winning!
(Score: 0) by Anonymous Coward on Tuesday April 23 2019, @03:21PM
itym whining
(Score: 1) by Sulla on Tuesday April 23 2019, @04:26PM
At least for me this has been nonstop winning for my retirement and ability to buy a home. Retirement has nearly tripped and I was able to buy my first home at 3.85%. Feelin like a 29 year old boomer.
Ceterum censeo Sinae esse delendam
(Score: 4, Funny) by etherscythe on Tuesday April 23 2019, @09:05PM
You'll need that phablet to have a screen big enough to display all the 0's. Stylin'.
"Fake News: anything reported outside of my own personally chosen echo chamber"
(Score: 2) by DeathMonkey on Tuesday April 23 2019, @05:43PM (3 children)
Is there no property tax in the UK?
(Score: 2) by Nuke on Tuesday April 23 2019, @06:10PM (2 children)
GP is bull-shitting. In the UK you pay Council Tax, roughly related to house value, but variable in different areas too. I pay £200 per month. You also pay a considerable "Stamp Duty" when you buy a house. If you rent out a house to a tenant you will pay income tax on the rent you receive.
(Score: 2) by isostatic on Tuesday April 23 2019, @09:58PM
Council tax is paid for by the person in the house / rent or buy you pay the same. It tops out at £3k a year, which on a million pound house is 0.3%. Typically it’s about 1500 a year for a £250k house or about 0.6%. In expensive areas it’s a lot cheaper.
It’s far higher on cheap flats, 1% or more, but nowhere near 3%. There’s a lot of exceptions to it too.
(Score: 0) by Anonymous Coward on Wednesday April 24 2019, @12:15AM
consider the possibility that capital gains on a primary residence might be taxed differently (or even not at all) in other jurisdictions.