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Millionaire to Millennials: Stop Buying Avocado Toast If You Want to Buy a Home

Forums - General Discussion - Millionaire to Millennials: Stop Buying Avocado Toast If You Want to Buy a Home

Nymeria said:

 

"Approximately 62% of Americans have less than $1,000 in their savings accounts and 21% don’t even have a savings account, according to a new survey of more than 5,000 adults conducted this month by Google Consumer Survey."

https://www.marketwatch.com/story/most-americans-have-less-than-1000-in-savings-2015-10-06

 

Can have 1 in 6 with plenty of money, on the flip side the other 5 of 6 could be struggling to make ends meet.

Wealth is much more than just saving accounts, like property, stocks etc.



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Ganoncrotch said:
LipeJJ said:

Don't worry, I don't mind answering.

Me and my boyfriend will buy our first apartment this year (around June/July, and we'll be sure to take at least 2 maids so we don't have to lose time doing useless stuff). I started college 2 years ago for fun (psychology), because I'm a very curious person and learning is something I truly love. Don't know if I'll work eventually or not, but it's still an invaluable experience.

Btw, I find amusing americans PoV regarding school/work/money. It ditches freedom completely if you are expected to do certain things at certain points. I'd be a sad person if I had to save a few hundred dollars/euros per week. To me, this is not living (if you have to rationalize everything and don't have the opportunity to experience stuff without putting much thought into them).

Sounds like you're fairly out of the loop with how the world actually works though in terms of for the majority of people, don't get me wrong I'm not saying someone should be strapped to a desk all year round at a job, think last year I traveled outside my home country more than 10 times on trips away, but still I think I enjoyed the holidays more knowing that I had saved / worked for them, would think I would enjoy life less if I had someone wiping my ass when I took a shit, I think dealing with the shit sometimes makes it more enjoyable when you get to escape from it. Can't have highs without lows would be a way to look at it I guess.

Good luck with buying the apartment though, make sure and consider what it would be like to live there in winter as well if you guys are going to view it in the summer, want to make sure it isn't in an isolated area which gets icy at winter I mean, can be easy to miss something like that going to buy in the middle of summer.

Yeah, I'm probably a bit clueless when it comes to "normal" struggles, but regarding having someone to deal with stuff... it's not like I don't want to do anything, but rather have the option to have it done when it's needeed. ^^ 

Don't worry about the apartment. I live in Rio, the lowest temperature I've experienced here was about 12° and where I'm moving to is not that different. Btw, congrats on the trips and savings! It's really nice to get to know new places/cultures.



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What's all the hype about avocados anyway? I tried one once... wasn't really a fan, although I do like guacamole.



DonFerrari said:

It impress me that people think it really is the fault of the capitalism that they want to have booze and party so the government must provide retirement and health since they couldn't save up for old age.

You do small sacrifices during your whole life so that you don't make gigantic sacrifices later on. The you of today need to loan to the you of tomorrow and not the opposite.

And for people saying how hard is to pay 250k on a house with 5% interest per year...

I paid 350k with 10% interest for 30year payment, when I first started working while having 3 months of wage delayed. But also I didn't go out, drink or anything. All my money was to pay for the car (about 30% interest per year) and apartment so I had all needed before marrying at 25.

Wow only $350K? They’d kill for housing that cheap in Melbourne. 



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You don't need to give up avocados if you just blow all your congressmen every day.



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Ka-pi96 said:
DonFerrari said:

It impress me that people think it really is the fault of the capitalism that they want to have booze and party so the government must provide retirement and health since they couldn't save up for old age.

You do small sacrifices during your whole life so that you don't make gigantic sacrifices later on. The you of today need to loan to the you of tomorrow and not the opposite.

And for people saying how hard is to pay 250k on a house with 5% interest per year...

I paid 350k with 10% interest for 30year payment, when I first started working while having 3 months of wage delayed. But also I didn't go out, drink or anything. All my money was to pay for the car (about 30% interest per year) and apartment so I had all needed before marrying at 25.

And if you die today and the you of tomorrow never exists?

Would really suck if instead of enjoying your money you saved it all but then died before you got a chance to use it!

If I die today my wife and son will at least not go famine while they reestablish themselves. I live good and comfortable, enjoy the today, but care about tomorrow.

Soundwave said:

You could say the same about video games. They are a waste of money in this context, especially at $300 a pop for the console + $60 a game. Guess millennial/young people shouldn't buy those, that's a lot more expensive than avocados, lol.

I wouldn't buy a home if I were in the position of a millennial. Find a reasonable place to rent and make sure you put aside your savings into a index stock fund with low management fees and build a savings pool that way. Don't dump it into a mortgage. 

Buying a console every 5 years and 3 games a year would cost you let's say 400+5*3*60 = 1300 USD, eating avocados+drinking starbucks and the like will be 15 bucks a day or =15*365*5 = 27k... yes I think the gaming isn't that expensive in comparison.

LipeJJ said:
Ganoncrotch said:

Sounds like you're fairly out of the loop with how the world actually works though in terms of for the majority of people, don't get me wrong I'm not saying someone should be strapped to a desk all year round at a job, think last year I traveled outside my home country more than 10 times on trips away, but still I think I enjoyed the holidays more knowing that I had saved / worked for them, would think I would enjoy life less if I had someone wiping my ass when I took a shit, I think dealing with the shit sometimes makes it more enjoyable when you get to escape from it. Can't have highs without lows would be a way to look at it I guess.

Good luck with buying the apartment though, make sure and consider what it would be like to live there in winter as well if you guys are going to view it in the summer, want to make sure it isn't in an isolated area which gets icy at winter I mean, can be easy to miss something like that going to buy in the middle of summer.

Yeah, I'm probably a bit clueless when it comes to "normal" struggles, but regarding having someone to deal with stuff... it's not like I don't want to do anything, but rather have the option to have it done when it's needeed. ^^ 

Don't worry about the apartment. I live in Rio, the lowest temperature I've experienced here was about 12° and where I'm moving to is not that different. Btw, congrats on the trips and savings! It's really nice to get to know new places/cultures.

Well in Rio 12 Celsius or 54 Fahrenheit is almost public emergency situation =p

mysteryman said:
DonFerrari said:

It impress me that people think it really is the fault of the capitalism that they want to have booze and party so the government must provide retirement and health since they couldn't save up for old age.

You do small sacrifices during your whole life so that you don't make gigantic sacrifices later on. The you of today need to loan to the you of tomorrow and not the opposite.

And for people saying how hard is to pay 250k on a house with 5% interest per year...

I paid 350k with 10% interest for 30year payment, when I first started working while having 3 months of wage delayed. But also I didn't go out, drink or anything. All my money was to pay for the car (about 30% interest per year) and apartment so I had all needed before marrying at 25.

Wow only $350K? They’d kill for housing that cheap in Melbourne. 

At the same time the minimum wage in the country was about 500/month, that is not even near cheap in Brazil... also with 10% interest a year you'll pay over 1M in 30 years.



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irstupid said:
Teeqoz said:

Eh, it depends on when the cut-off point for millennials is. The "millennial" generation is typically considered to start somewhere in the span of 1977-1983, and ends some time between 1993-1996. If you take the earliest years for both, you have millennials in their 40s now, while the youngest are 25. I could see 1 in 6 in that age range having 100,000 in savings.

the survey said like ages 22-37 or something. 37 was the high end. Not sure what low end was.

But go and think of the first dozen people you can think of between those ages. Do you believe that at least two of them have 100k sitting in savings? 100k is a lot of money.

I live in Norway, so it isn't comparable, but if I do it anyway, then absolutely. Not 100k sitting in the bank of course, but mostly taking the market value of their house - their debt. Heck, I'd probably go as far as to say at least 1 in 3.



Chrizum said:
What good is having money when you don't spend it?

1. Unexpected expenses could ruin you without savings.

2. Financial planning allows you greater options through life and especially for retirement.

3. Money makes money.  Saving and investing are the equivalent of having a second job you don't have to work at, but get the money.



numberwang said:
Nymeria said:

 

"Approximately 62% of Americans have less than $1,000 in their savings accounts and 21% don’t even have a savings account, according to a new survey of more than 5,000 adults conducted this month by Google Consumer Survey."

https://www.marketwatch.com/story/most-americans-have-less-than-1000-in-savings-2015-10-06

 

Can have 1 in 6 with plenty of money, on the flip side the other 5 of 6 could be struggling to make ends meet.

Wealth is much more than just saving accounts, like property, stocks etc.

Yes, I am aware.  That said, if someone has less than $1000 for monthly expenditures, what odds are there that they have $100,000+ in the market?  The kind of mindset that lives so close month to month isn't very likely to be planning for years or decades down the road.  It can happen, but being cash poor is a risky proposition.  Markets are far better strategy for long term planning, but the volatility isn't something you want to worry about paying regular bills.

I'd advise anyone to have at least two months worth of bills easily accessible (for vast majority this would be in excess of $1000) in the event they should suddenly become unemployed.  Putting money in and taking it out of your investment portfolio can lead to a lot of anxiety if the timing is bad.  Right now we've had eight years of a bull market, but it could easily correct by 2020 seeing people have less then than they do now.