We have advanced our standard of living, but haven't kept up our standard of responsibility. Our parents/grandparents didnt have videogame consoles, laptops, phones, coffee besides cheap store drip, meals out more than 1x per month, tattoos, anything from a spa etc. All of those were likely dumped into home equity (owning your home was the predecessor to diversified assets in retirement savings).
Another thing that hasn't helped is the government has been printing money like crazy, playing a mind game that means even though you make 2x when you started your career, you might actually be really earning less. For example, my earnings have gone up about 6x across my career, but my rent has gone up 10x...
They also didn’t have six figure student loan debt, and their housing costs were not 50-75% of their salary. Video games and cell phones are small potatoes—-not what is keeping the current generation financially insecure, but they are visible “luxuries” that Baby Boomers can point to and try to shame people over.
But our grandparents did predominately live in rural areas. You can still live quite affordably in rural areas now. Most people just aren't happy with that lifestyle anymore.
Additionally, the majority of our grandparents didn't own their homes. If the majority of us were okay with renting like our grandparents were, you wouldn't see the irrational behaviour of buying at any cost that pushes the market beyond what is sensible (i.e. paying 75% of salary for no reason).
Good luck retiring to a farm. Even better luck getting health care there.
Agricultural work can be available in rural areas, but even in the most agriculturally productive areas, makes up a small portion of the workforce. The age where the majority of the population are farmers is long gone. Even within the agricultural sector, a lot of the work is in front of a desk.
In my foolish youth I once tried to maintain two development jobs at the same time. That turned out to be a really big mistake. With that in hindsight, I really have to question why people are worried about how much opportunity there is. Maybe you are better than me and can handle two jobs without issue, but three? How many jobs do you really need? One available opportunity is all I will ever need again.
The second time, later in my career, I did find myself without work, but with the substantial savings I was able to accumulate thanks to a low cost of living, I didn't even bother to look for another job. I essentially took a couple of months of vacation during the worst of it and then employers started knocking on my door again when things started to turn around.
I am sure another downturn will come again, and if that means having to move, so be it. I also have no qualms about working in other industries. I'm especially fond of the agriculture industry, which is convenient for me. But, as you well know, having a tech career for long enough to have gone through those two downturns, we're getting into the position that we could start to seriously think about retiring when that time comes. While the average career may not have that luxury, you can save a lot of money with a high tech income.
The risk seems overblown to me. If the worst case scenario is having to move back to where you came, that's not a very big risk. You will be there even if you stay put.
I'm not as familiar with how to navigate the BLS to see what things are like stateside at a localized level, but you might want to look more closely. You may be surprised. I was.
75% is far above what any reasonable person would recommend to be the maximum portion of salary that should be spent on housing. Personally, my housing is around 25% of my posttax income, and I thought I was pushing it a bit.
This isn't a generations problem, this is a supreme-ignorance problem.
Two rules of thumb i've heard are: 1) Do not mortgage more than 4x your annual salary (household if double income) . 2) Do not pay more than 20x annual rent for a place (eg, $50k annualized rent == $1M house) .
Another way to rephrase an ignorance problem is a lack of education problem. On one hand we're all adults and ought to keep trying to learn whatever will benefit us best (ie "Financial education") , on the other hand those tasked with educating us have failed us (parents, school system) .
Being younger than the Web, I utilized neither of those things to learn how to set up a budget.
> On one hand we're all adults and ought to keep trying to learn whatever will benefit us best (ie "Financial education")
Damn straight.
Is the problem lack of education, or is it that humans also have emotions to contend with?
If, hypothetically, someone with a $100k income spends $75k on rent, they are left with $25k to spend elsewhere. If another location allows you to rent a place for $10k, that means that a $35k income would also leave you with $25k to spend elsewhere.
Assuming all else is equal, try and convince someone with that $100k income that they should move and take a $40k job instead. It, in almost all cases, isn't going to happen.
Sure, they would technically be better off, giving them an additional $5,000 in their pocket. But from a social perspective, saying that you make $100k sounds way more impressive than saying you make $40k. And moving isn't a desirable action for most. It seems that is difficult for a lot of people to overcome, even when they know the numbers are not in their favour.
> Is the problem lack of education, or is it that humans also have emotions to contend with?
On second thought, it is indeed good that there is selection pressure against the weaker-minded.
I'm not a baby boomer and IMO people shouldn't both consume luxuries whilst complaining they cannot afford necessities (IMO retirement is a need), irrespective of how "small" the potatoes are, they add up and compound.