Affordability discussion (split from Iran thread)

[LouderVol]

Part of it as well (if we are to believe the younger generations when they tell us) is that they value things differently than prior generations.

[which is true for every succeeding generation]

Young people today place great value on experiences. They are much more likely to spend money on travel, events, etc - and derive great satisfaction from that. Some aren’t interested in having children and owning property, they prefer what they perceive as greater freedom. Which is their prerogative.

one of the reasons travel and events are seen as more freedom is because they are FAR more affordable than a child. freedom is really affordability.

I can afford for us to go on vacation, lots of them and nice. or I could maybe afford one kid. kids plural? not even close. a kid now is another mortgage payment.

I am in my mid thirties with most of my friends. pretty much every couple says the same thing, we would have kids/more kids but we can't afford it. One couple hired an Au Pair because it was cheaper than the day cares they could get into. another is paying almost 2k a month for child care.

what you call "freedom" is really just some fiscal responsibility. its not a case of we could afford to have kids if we didn't travel. Its we can't afford X, so we go with Y instead.

 

[LouderVol]

One of the prevailing themes in one of the surveys someone linked earlier was -

I’ll never be able to afford a house “that I want” so why bother saving.

what do you think the issue is there?

yeah there is an affordable house. but guess what you have 3 holes in the roof, there is extensive mold and water damage. That was literally one of the first houses my realtor showed me. cheaper than the house I bought, but was no where close to livable. as I said earlier the house I bought had asbestos.

Don't try to sell me that the bs "back in my day I had to walk up hill both ways" crap. the same houses previous generations would have passed on, are still undesirable today. most of us aren't sitting here waiting on the brand new home with a three car garage and a pool.

 

[OHvol40]

I know and I’m not throwing stones.
I’m just pointing out that in the last 5 or so years, at least in ETN, home prices have skyrocketed at a rate much higher than inflation after tracking with inflation for decades.

I’m sure that’s true. I can anecdotally attest that people in the Great Lakes region LOVE to vacation in the Smokies now, and many are choosing ETN to retire instead of FL or AZ. I moved away from ETN in 2013, now when I come back to visit I check out home prices (mainly in the Tri Cities) out of curiosity. I’ve been shocked at the rate of increase.

 

[05_never_again]

We spent almost 12 years trying to do 0% interest rates. We felt the dumbass impact of those roosters coming home to roost. We took a decades worth of inflation in one hit. And no employer is going to do that in turn. So here we are

That too. But I didn't feel like going back that far lol

The thing about the post-COVID inflation was that another huge cause of it was the supply chain issues. Even if interest rates had been higher coming into the crisis, and the stimmies/monetary support hadn't been as extensive, there still would have been high inflation in 2021 and 2022. The global economy basically stopped for a couple of months in March and April 2020, and then persisted for even longer in some places because of the lockdowns.

 

[jvol1]

Wealth Tax is always a great idea. So many success stories out there. We should definitely do that.

Capital us the one thing we have in surplus. That's why yields have been falling, more dollars chasing the same assets. Unfortunately choosing a form of taxation which might fit our economic reality isnt what people want. They want everything but they dont want to pay any taxes to get it.

 

[LouderVol]

You didn’t include the the average sqft in 1960 was 1200 and today is 2200. And 1 bath versus 2.5. And rather than encourage builders to build “starter” homes, we decide that we’ll subsidize (section8) nice big homes for those that can’t afford them rather than supply something they could afford.

bigger houses are preferred by builders because you get to spread out the fixed expensive costs over a larger area, bringing the average cost per square foot down. Building smaller wouldn't save nearly as much money as you think. especially because the additional "hidden" permit/zoning/regulation costs are HUGE numbers that aren't as tied to the square footage as it is the drastic change in those items.

kitchens and bathrooms are the two most expensive rooms in a house. no matter their size. the cost per square of those rooms is going to be 3 or 4x the overall average cost of the house. the cost to build a 1200sqft house with two baths and kitchen and a 2200 with two baths and kitchen isn't a 100,000k or more.

what is valued has also changed, and the cost of materials have drastically change. the older/wiser generation covered up hardwood floors with linoleum. why? because hardwood floors were cheap, so it didn't matter that they were covered up. it would be insanity today to put in hard wood floors, and then cover them up with vinyl planks.

I bought one of those 1200 square foot houses, built in 1959. it has 1.5 baths, didn't have stainless steel appliances, had asbestos, needed a new roof. still cost 300k.

yall are so stuck on focusing on one tree, you can't see the forest.

 

[marcusluvsvols]

Baby Boomers are the group born between 1945 and 1965, so your parents are boomers

Thats a BIG "generation" of 20 years right? Which seems right. 20years is about how long it takes people to reproduce. That makes sense. Neither of my parents are alive anymore sadly.

I am 49 though very soon anyway and Genx on the younger end from what I understand. My wife is born in 82 and a very old millennial. I think. Then theres GenZ, GenY, and maybe even another one? Doesn't seem like it should be possible for there to be 3 generations minimum between me (1977) and today and im not 50 yet. Either "generations" are getting shorter or I really need some caffeine, or both Guess I need to learn more about "generations".

 

[marcusluvsvols]

one of the reasons travel and events are seen as more freedom is because they are FAR more affordable than a child. freedom is really affordability.

I can afford for us to go on vacation, lots of them and nice. or I could maybe afford one kid. kids plural? not even close. a kid now is another mortgage payment.

I am in my mid thirties with most of my friends. pretty much every couple says the same thing, we would have kids/more kids but we can't afford it. One couple hired an Au Pair because it was cheaper than the day cares they could get into. another is paying almost 2k a month for child care.

what you call "freedom" is really just some fiscal responsibility. its not a case of we could afford to have kids if we didn't travel. Its we can't afford X, so we go with Y instead.

While I am sure this is true, Louder, that might be the saddest post I have read on VN man. I can imagine how expensive it would be to have a little one today with how crazy the world is etc. You're really smart though and have a good job. I would be looking at "how can I afford for my wife to take off 5-6 years until our kid can start school?" Which is also gonna be really expensive and probably seem out of reach...I dont know man but thats heartbreaking. We quit having kids at 2 and my wife cried a lot and was depressed and I held my ground because I knew it wasnt feasible so I understand the predicament. You can never "afford" to have a kid though for most people. Unless you're rich. But we managed to raise 2 the right way despite both being surprises and us being poor. It probably costs $1M to raise a kid to adulthood these days. I can see that. On paper it might not work out...but if yall really want one God will make it work for yall to have a kid man IMO. As I get older and have had that stupid heart attack, I consider my kids really my only accomplishment. Not what I've done at work or anywhere else. Its perfectly cool to NOT have kids, and plenty choose not to. If yall really want a kid though, it would be tragic to not have one. God got me through 2 of them and I am a sinner and an idiot.

 

[hog88]

one of the reasons travel and events are seen as more freedom is because they are FAR more affordable than a child. freedom is really affordability.

I can afford for us to go on vacation, lots of them and nice. or I could maybe afford one kid. kids plural? not even close. a kid now is another mortgage payment.

I am in my mid thirties with most of my friends. pretty much every couple says the same thing, we would have kids/more kids but we can't afford it. One couple hired an Au Pair because it was cheaper than the day cares they could get into. another is paying almost 2k a month for child care.

what you call "freedom" is really just some fiscal responsibility. its not a case of we could afford to have kids if we didn't travel. Its we can't afford X, so we go with Y instead.

You can afford a kid.

HS buddy of mine used the same argument you just used. He waited until he could afford kids and now at 55 he's got a 12yo and a 10yo, he probably won't live to meet his grandkids.

 

[theFallGuy]

one of the reasons travel and events are seen as more freedom is because they are FAR more affordable than a child. freedom is really affordability.

I can afford for us to go on vacation, lots of them and nice. or I could maybe afford one kid. kids plural? not even close. a kid now is another mortgage payment.

I am in my mid thirties with most of my friends. pretty much every couple says the same thing, we would have kids/more kids but we can't afford it. One couple hired an Au Pair because it was cheaper than the day cares they could get into. another is paying almost 2k a month for child care.

what you call "freedom" is really just some fiscal responsibility. its not a case of we could afford to have kids if we didn't travel. Its we can't afford X, so we go with Y instead.

yeah but who's going to change your diaper when you are 80?

 

[Wireless1]

bigger houses are preferred by builders because you get to spread out the fixed expensive costs over a larger area, bringing the average cost per square foot down. Building smaller wouldn't save nearly as much money as you think. especially because the additional "hidden" permit/zoning/regulation costs are HUGE numbers that aren't as tied to the square footage as it is the drastic change in those items.

kitchens and bathrooms are the two most expensive rooms in a house. no matter their size. the cost per square of those rooms is going to be 3 or 4x the overall average cost of the house. the cost to build a 1200sqft house with two baths and kitchen and a 2200 with two baths and kitchen isn't a 100,000k or more.

what is valued has also changed, and the cost of materials have drastically change. the older/wiser generation covered up hardwood floors with linoleum. why? because hardwood floors were cheap, so it didn't matter that they were covered up. it would be insanity today to put in hard wood floors, and then cover them up with vinyl planks.

I bought one of those 1200 square foot houses, built in 1959. it has 1.5 baths, didn't have stainless steel appliances, had asbestos, needed a new roof. still cost 300k.

yall are so stuck on focusing on one tree, you can't see the forest.

You've nailed the problem. A builder/developer today has little to no incentive to build a no frills small "starter" home because for just a little more cost he can add a lot of size and features. In Knox county the shortage is of buildable lots (don't get me started on zoning and regulations) so a builder is going to maximize his profits by building the biggest thing the lot can support, and that's not going to be a starter home. Lack of starter homes then drive up the price of the few that are on the market hence you're paying $300K for a home that 10 years ago probably could have been purchased for less than $100K.
It's the entry point that's been going up exponentially. The $1M homes haven't gone up by the same percentage, it's like there's been a $200K value added to every home.

 

[85SugarVol]

what do you think the issue is there?

yeah there is an affordable house. but guess what you have 3 holes in the roof, there is extensive mold and water damage. That was literally one of the first houses my realtor showed me. cheaper than the house I bought, but was no where close to livable. as I said earlier the house I bought had asbestos.

Don't try to sell me that the bs "back in my day I had to walk up hill both ways" crap. the same houses previous generations would have passed on, are still undesirable today. most of us aren't sitting here waiting on the brand new home with a three car garage and a pool.

Your anecdote is unconvincing.

Don’t try and sell you? Sell you what? I said nothing of the sort - so you can shove that and get bent.

There are perfectly reasonable starter homes out there to be had. They clearly dont match up with the “wants and desires” of the young people sampled in that survey.

If you want to get pissy… get pissy with them.

 

[85SugarVol]

Capital is the one thing we have in surplus. That's why yields have been falling, more dollars chasing the same assets. Unfortunately choosing a form of taxation which might fit our economic reality isnt what people want. They want everything but they dont want to pay any taxes to get it.

What is your favorite example of a Wealth Tax success story?

 

[MOOOOONEY]

Those things exist, but they aren’t why younger generations are struggling financially. Gaming, Netflix, and phones might add up to $100 to $200 a month, but the real difference between generations is the cost of major necessities. Housing, college tuition, healthcare, and childcare have increased far faster than wages. For example, homes used to cost around 2 to 3× the median income decades ago, and now in many places they’re 5 to 7× income. That’s a structural economic shift, not just people ordering DoorDash or paying for streaming services. Small luxuries didn’t suddenly make life unaffordable massive increases in essential costs did

1. Why has housing prices increased almost double over the past 4 or 5 years?

2. Why has the price of college ballooned?

3. Why did healthcare costs skyrocket?

 

[LouderVol]

You can afford a kid.

HS buddy of mine used the same argument you just used. He waited until he could afford kids and now at 55 he's got a 12yo and a 10yo, he probably won't live to meet his grandkids.

you want to come talk to my wife about all the stuff we can't afford if we have kids? - tongue in cheek

I am not that conservative about money, my new BIL wants a million dollar in "liquid" assets before he has kids. My dad was 35 when I was born, 41 when the youngest was born. I am not going to be far behind him.

 

[LouderVol]

yeah but who's going to change your diaper when you are 80?

If I don't have my mind, hopefully no one. Its an ongoing discussion I am having with my wife, if I lose my mind dementia/senile/Alzheimer's whatever, I don't want anyone spending another dime on me. I am not there any more, I will consider it a kindness to let me die rather than be trapped in that hell. told the wife if I notice the slips, not a given, the last real conscious decision I will make is to wonder off into a real wilderness. pour a beer out for me, and move on.

 

[BigOrangeMojo]

What is your favorite example of a Wealth Tax success story?

A national wealth tax would be a clusterf*ck of epic proportions. It takes the IRS years (and usually, millions of dollars per case) to determine the value of property held in estates/corporate transfers. Imagine doing this EVERY year and then imagine Congress lowering this threahold to include people with a million dollar net worth. Heck, even the uber liberal lead partner of the transfer pricing economist firm the IRS uses agrees this isnt feasible...

It failed in Argentina, failed in Spain, failed in France, etc.

 

[theFallGuy]

If I don't have my mind, hopefully no one. Its an ongoing discussion I am having with my wife, if I lose my mind dementia/senile/Alzheimer's whatever, I don't want anyone spending another dime on me. I am not there any more, I will consider it a kindness to let me die rather than be trapped in that hell. told the wife if I notice the slips, not a given, the last real conscious decision I will make is to wonder off into a real wilderness. pour a beer out for me, and move on.

well thanks for this very uplifting story. LOL

 

[hog88]

you want to come talk to my wife about all the stuff we can't afford if we have kids?

I am not that conservative about money, my new BIL wants a million dollar in "liquid" assets before he has kids. My dad was 35 when I was born, 41 when the youngest was born. I am not going to be far behind him.

No, I absolutely do not want to talk to your wife about money or kids. I don't like talking to my own wife about either subject.

My point was that you can afford a kid, you would just have to adjust your lifestyle. I've got several friends that waited until their 30s to have kids, I've seen some of the advantages. While we were pinching pennies and dealing with ankle biters they were out doing stuff 20somethings do. But now that ours are grown and we do have disposable income, can come and go as we please while they are raising kids. I don't regret our little accidents happening young, I do like being young enough to enjoy their little disease carrying puss bags while having the freedom to do chit I didn't have the money to do in my 20s even if I didn't have kids.

 

[ButchPlz]

you want to come talk to my wife about all the stuff we can't afford if we have kids? - tongue in cheek

I am not that conservative about money, my new BIL wants a million dollar in "liquid" assets before he has kids. My dad was 35 when I was born, 41 when the youngest was born. I am not going to be far behind him.

We just had our first at 36.

The various expenses for the first few months of her life have literally been more than our mortgage payment.

Like we keep repeating (@Ttucke11), the generation ahead of us has zero interest in any perspective but their own.

 

[85SugarVol]

A national wealth tax would be a clusterf*ck of epic proportions. It takes the IRS years (and usually, millions of dollars per case) to determine the value of property held in estates/corporate transfers. Imagine doing this EVERY year and then imagine Congress lowering this threahold to include people with a million dollar net worth. Heck, even the uber liberal lead partner of the transfer pricing firm the IRS uses agrees this isnt feasible...

It failed in Argentina, failed in Spain, failed in France, etc.

I agree. I wanted to hear about what he considered the success stories though lol.

Did you see my question from last night?

 

[85SugarVol]

No, I absolutely do not want to talk to your wife about money or kids. I don't like talking to my own wife about either subject.

My point was that you can afford a kid, you would just have to adjust your lifestyle. I've got several friends that waited until their 30s to have kids, I've seen some of the advantages. While we were pinching pennies and dealing with ankle biters they were out doing stuff 20somethings do. But now that ours are grown and we do have disposable income, can come and go as we please while they are raising kids. I don't regret our little accidents happening young, I do like being young enough to enjoy their little disease carrying puss bags while having the freedom to do chit I didn't have the money to do in my 20s even if I didn't have kids.

I have a 6 year old, she was born when I was 40. I know full well how much a kid costs “these days”….

They aren’t free.
They aren’t a debilitating financial millstone.

People don’t want them, or simply want them later.

 

[LouderVol]

We just had our first at 36.

The various expenses for the first few months of her life have literally been more than our mortgage payment.

Like we keep repeating (@Ttucke11), the generation ahead of us has zero interest in any perspective but their own.

yeah, costs are one of the reasons I really want the next house to have an apartment so that family can stay to help out. looking back the generational housing my grandparents had makes a lot of sense.

even beyond the costs I would much rather have family take care of the kid than a random day care, if we go that route.

 

[BigOrangeMojo]

I agree. I wanted to hear about what he considered the success stories though lol.

Did you see my question from last night?

I dont have a strong opinion one way or the other on Boomer Asset Mirage theory. It's an interesting theory.

 

[ButchPlz]

yeah, costs are one of the reasons I really want the next house to have an apartment so that family can stay to help out. looking back the generational housing my grandparents had makes a lot of sense.

even beyond the costs I would much rather have family take care of the kid than a random day care, if we go that route.

We had originally planned on doing something like that with a separate in-law suite/carriage house that we could rent out as an AirBnB while family isn't with us.

If we ever have to go to DC/Northern VA, and make the insane decision to buy up there, we'll have to supplement with some sort of rental income like that.