Time for the Baby Boomer to Pay Their Way.....

Discussion in 'Property Market Economics' started by sash, 20th Nov, 2019.

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  1. wylie

    wylie Moderator Staff Member

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    I'm a BB, aged 59. Career breaks were brought in by the Boomers. The oldest Gen X would have been aged about 22 when I first opted to take a career break. They wouldn't have been insisting on career breaks. I was on the tail end of the boomers, had my first child in 1988 and career breaks were definitely an option for me by the time I had our second child in 1992, and I took a career break.

    I don't know if career break was an option in 1989 when I went back to work, because I was offered a promotion to return to work and I did that.

    Certainly by the time I had our second child in 1992, career breaks were available as I took a career break myself.

    So even if it was (lets say as late as) 1990 that they were on offer to me, it means the oldest of the Gen X (born between 1965-1979) were aged (at most) 25 and I would assume it was not likely 25 and younger women (or men) were pushing for career breaks. Even if they were pushing for it, they had little clout. It would be the later born Boomers pushing for this.

    Gen Y (born between 1980-1994) were still in primary school so they certainly were not pushing for career breaks at that stage.

    Working from home I believe came later, but because it was not something offered by my employer or my husband's employer, I have no memory of when this was being offered.

    Even in 1992, job-share was on offer, but I had to find someone willing to share, and if the department with a job open didn't want a shared position, that was the end of it. There was no list of others looking to link up. It was up to me to arrange it and then ask permission, which meant it wasn't easy at all.
     
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  2. sash

    sash Well-Known Member

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  3. sash

    sash Well-Known Member

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    Maybe so....but I have to give Gen-Y credit...most employers only came on line when Gen-Y would resign on the drop of a hat if they did not like an inflexible employer. Most Baby Boomers ...not offence were sheep and treated as such by employers. Just look at how long most worked for one employer.

     
  4. wylie

    wylie Moderator Staff Member

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    I don't agree about the "sheep" comment. I stayed with my employer because I enjoyed my job.

    Hubby stayed with his employer for the same reason. When conditions and pay suit you, why change?
     
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  5. Damo93

    Damo93 Well-Known Member

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    Gen Y here. My first several jobs in Australia lasted between 1 day and 10 months, and several people i have met along the way here have had similar experiences in the workforce. Poor pay and/or work conditions are absolutely not tolerated. The older generation in the industries I have worked in seem to simply "show up and shut up". I have been in my current job for 5 years with my position changing 3 times and my boss investing in my education. I am willing to work hard for someone willing to invest in me.
     
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  6. sash

    sash Well-Known Member

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    OK that is great...read Damo's comments below...his experience is more common than you think...
     
  7. mues

    mues Well-Known Member

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    In general, i would say outside him starting work at 19 and me at 21/22 (i worked full time while at uni). i made more than him at the same age in comparison to the average income in australia. He was always a slightly above average earner. I have been a very high earner and now make substantially more than he every did in comparison to averages.

    so in like 1975 you could make like 7-8k a year average income and buy in Hawthorn melbourne for like 25k. And thats with 1 person working. Yes interest rates are higher, but we are talking 4x his take home pay maybe.

    as it stands, average household income is what, 90k? That number includes a lot of houses with 2 people working. A house in Hawthorn is probably 2.2million? so thats 20x the average household income.

    So my question is, what income do you need to buy a house in hawthorn now? The answer is you probably need a household income of over 400k, as you have childcare to pay for, tax is higher in those brackets. So you would need 5 times the average household income in 2019, where in the 1970's you might just need to earn slightly more than average.

    We can always talk about other factors, like interest rates and buy where you can afford, work up the property ladder etc. That is all true. Im not denying that.

    But in general the value of land in proximity to jobs now is so different, to not acknowledge this is crazy. We live in a very different world. Increased travel time, increased debts, children in childcare because both parents need to work have vastly increased last 15-20 years. I am not sure all these changes have been positive. I worry if we don't find a way to fix this how it will turn out for my kids.
     
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  8. kierank

    kierank Well-Known Member

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    What a lot of BS!!!

    I had 3 different jobs between 1997 and 1990. On each occasion, I resigned due to being offered a higher position and more money by the new employer.

    Also, I started with a large company and progressively changed jobs to work for smaller and smaller companies. In 1990, I started by own business and was never employed again by any organisation except businesses I owned.

    When I was a “true” employee, I was considered by my friends and peers to be a stable and long-term employee as most of them only worked two years before changing jobs.
     
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  9. wylie

    wylie Moderator Staff Member

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    I have three sons who have changed jobs for better pay and conditions. Some of my friends also changed jobs but it's a bit rich to label people as "sheep", just saying.

    I know many people in the generation before mine (now long retired) stayed with one company for their whole lives, but to say that they were sheep isn't right.
     
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  10. Silverson

    Silverson Well-Known Member

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    I am a millennial/gen Y.
    I’m sick of all this generational division and all the he said she said ********.
    Regardless when you were born the formula has remained the same.
    Work hard, sacrifice, save/invest and let time/compounding work it’s magic. I could almost guarantee this will be the secret recipe moving forward as well.
    Each and every generation has had their goods and bads.
    Sometimes you swim with the tide sometimes against it, you have to just keep swimming

    Millennials (most) are a bloody whinging bunch but truth is the boomer parents should have aligned their children’s expectations with reality, instead of hugging them when they complain about not being able to afford a double story terrace in Fitzroy and a few international holidays a year, sit them down and explain to them how this is attainable via saving/investing.

    My sook for the day!
     
    Last edited by a moderator: 21st Nov, 2019
  11. sash

    sash Well-Known Member

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    OK you were stable...did you mean mentally? ;)
     
  12. marmot

    marmot Well-Known Member

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    The fact remains for many that were born in the 1950s and 1960s , is they could go and really still enjoy themselves.
    I spent most of my 20s doing what was considered a rite of passage.
    Spent a few years backpacking and working around Europe and lots of travel around Australia.
    Bought my first house when I was single and hitting 30 after 6 months saving up for a deposit.
    The bank would laugh me out the door these days and would have to find a partner first.
     
  13. Phar Lap

    Phar Lap Well-Known Member

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    I wouldnt bother replying to this thread anymore, its a gee up, sash is taking the ****.
     
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  14. kierank

    kierank Well-Known Member

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    Put it this way, I wasn’t horsing around :D.
     
  15. Someguy

    Someguy Well-Known Member

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    As far as I can see that path is still an option now, I know of people straight out of high school going to government jobs, or get stuck in at a blue collar job. Living with parents earning 80k+ a year till mid 20’s and really no excuse for not having a deposit for a house, could almost buy a unit cash at that point if invested well in the meantime.
     
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  16. mues

    mues Well-Known Member

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    I don't know anyone in Melbourne who got an 80k job straight out of school without doing a trade or degree first. I actually dont know many people who made 80k out of school after doing a degree first. I believe i first year doctor makes under 70k. And those guys are past their mid 20's.

    Also, what type of house do you think you are buying on 80k a year?
    A 25 year old on 80k per year living at home without contributing to bills with an monthly net income of maybe 5k???? Say they save 70% of that (who saves 70% of their income in their 20's....) , making 3,000 odd a month. Thats 36k per year. Can you find me an apartment you will be able to pay cash for? When i lived with my parents i paid rent. It was below market, but i paid.

    Also i would think your loan limit would be 500k-ish? Which means your max budget in Melbourne or Sydney would be 650k. Thats not going to get you much. Not somewhere you can have 2 kids in.

    A more realistic thing would be 23 year old gets internship after racking up 35k+ university debt. They spend 6 months making just above minimum wage after university. They then get a full time job paying less than 70k which they work until they are 26/7 years old and are able to move out with friends. Hopefully as they get towards 30 they are able to start putting a deposit together or they meet someone to be able to split the cost of living (2 people in 1 room cheaper). They start to pay down their Uni debt a bit more and sometime around their early 30's they are finally able to think about getting things together to get into the market.

    That is the life of the fortunate people in Australia who do well at school, university and with jobs.

    Its not hell. But the way the housing market has changed is having a large impact on our society. Telling young people to just do better is a bit rough in my opinion.
     
  17. Islay

    Islay Well-Known Member

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    Nailed it @Silverson. “Just keep swimming”. Well said (I’m a boomer who has watched Nemo and Dory many many times!) lol
     
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  18. John_BridgeToBricks

    John_BridgeToBricks Buyer's Agent Business Member

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    If you look at the data, a mortgage these days takes up less % of the average income than it did 30 years ago. Plus, life was harder in the past: wars, recessions, etc. So I don't think complaints around access to housing are necessarily an economic problem.

    The problem for Gen Y is not economic - it is that they are delaying many of the trappings of adulthood, most specifically marriage, and they are prolonging the unproductive part of their lives. They are then trying to course correct too quickly but finding out that they missed out on a decade of saving.

    Getting married young as society used to did mean that people did other grown-up things earlier as well, like buying a house, settling down etc. So housing wasn't any more or less affordable in the past, it is just that people started earlier.

    My point is not that it is easy to get on the property ladder - my point is that the reasons why many people have not done it is generally not economics, and Gen Y should own their decisions in this regard.
     
    Last edited: 21st Nov, 2019
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  19. mues

    mues Well-Known Member

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    This cherry picks statistics in my opinion. Household incomes have increased 50% in the last 30 years due to participation of women in the workforce. So a lifestyle sacrifice was made to increase that income.

    The average mortgage is not useful as a statistic because it factors in mortgages of all generations. You would want to break it down via generation if you want to use the statistic. Because i can tell you my mortgage is lower than my mother in laws..... young people have larger loans than older ones.

    This also ignores the biggest barrier, which is getting the deposit. When a house was 3x the annual salary, it was easier to get a deposit than when we hit 10x

    The lower cost is dependant on the interest rate staying low. The risk burden held by young people is very high.

    I worry be blame young people for being poor.
     
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  20. Phar Lap

    Phar Lap Well-Known Member

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    They are about to inherit more than any generation yet our household has inherited bugger all. Everything we have we created ourselves. Im staggered by the amounts some of our friends and acquaintances have or will inherit! Lucky buggers! And that is luck!
     
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