FU Money? How about FI Expense?

[AnonEMouse]

https://foreignpolicy.com/2019/07/0...rge-shibal-biyong-millennial-****-it-expense/

Young South Koreans and to some extent young Americans are making small splurges instead of saving for long term financial goals (retirement, buying a house, etc.) due to despair about their economic prospects. Basically, won't ever be able to afford to buy a house so just get the steak now.

"Shibal biyong didn’t come out of nowhere. It shares a sensibility with phrases like geumsujeo (gold spoon) and hell Joseon (hellish Korea), which became popular several years ago and express the collective despair of a generation of South Koreans who find life in their country intolerable because it seems rigged to benefit people born into wealth (like gold spoon kids) or rich enough to emigrate."

The article argues that given their circumstances, their behavior is actually rational. This is disheartening for future generations.

 

[Spock]

Or are they just impatient?
I have not seen any data that says today's generation is incapable of living below their means and saving up for the same goals as older generations have.
Live in a HCOL area? Move.

 

[Nature Lover]

Interesting. Have to say in every generation there's a crisis the prior generation didn't face. I came to the SF Bay Area in 1985 from a lower COL area. Couldn't afford a house (I mean, what I could afford was 1 hr from work via public transit & BART, ~800sf, and an 80 year old fixer, in a low income neighborhood.) And, yes, I was a CPA in corp america, working 60-70 hr weeks, ugh! Needless to say, despite being positioned with the potential for a successful career, with long-hours - and the potentially higher compensation that accompanied such success, I thought I'd never be able to own a house here. Appreciation was just happening too fast.

However, I rented a small place, saved and invested everything I could, and 6 yrs later, the market subsided a little and I had enough for a down payment on a small 1400sf, 20+ year old, cosmetic fixer. That, of course, was the start of something better. I kept it well maintained, and within 20 yrs, it was free and clear. Within a few more years, I was FIRE'd (yep! still living in that same, now 50 year-old, house. ). As I look back, maybe I took the road less traveled....more than a few friends went down the "if I can't ever buy a house, I can't succeed...and so I guess I'll just spend it" road. And yep, they're all still working (although 1 or 2 fall into the rich, but need to keep working to maintain the lifestyle group - having eventually earned big $$ and ramped up a big lifestyle).

I expect there are some in S. Korea taking the road less traveled, but as in my experience, most of those who choose to spend it will self-fulfill their own prophecy ....and opt out of a self-made FI future.

 

[RunningBum]

Very confused by the thread title until I realized that FI in this case does not mean "Financially independent" as it always does here, but rather "F*** It".

 

[kimcdougc]

Very confused by the thread title until I realized that FI in this case does not mean "Financially independent" as it always does here, but rather "F*** It".

+1

 

[Teacher Terry]

My oldest son and his wife would have to move to a lower cost of living to buy a house and it’s not worth it to them. They really value travel. Some young people are taking a different path.

 

[AnonEMouse]

BTW, just noticed the URL was modified by the forum. Just replace the *** with f*ck (replace the * with u of course) and it'll go to the article.

I know there are plenty of threads like this with people saying if "I can do it, they can too." For the longest time I believed that future generations will fare better than previous ones. That is getting harder and harder to square with reality.

Another similar article today, but on Hong Kong.
https://www.cnn.com/2019/07/09/asia/hong-kong-divide-intl-hnk/index.html

Take a look at the graph near the bottom comparing median income with median housing prices. The present is nothing like the past and young people today certainly cannot "do it too." The U.S. as a whole is not quite as dire, but it's not as affordable as in the past either.

I don't want to belabor the point. I just want to point out the general downward trend in standard of living from generation to generation. The discord between generations will likely increase. Already we see more support for "socialism" by the younger generation in the U.S. as a response to their increasingly dim economic prospects.

I'm not sure where I'm going with this. Just anxious for future generations as a whole I suppose. The shifting winds will lead to upheaval at some point.

 

[Spock]

I agree that the younger generation is going to be reluctant to pay the debts that the previous generations have rolled up... and in the US that could roll to impact things like SS and Medicare.
But I disagree with the premise that as a whole the younger generation is economically disadvantaged. The CNN article has important caveats:

"Young Hong Kongers belong to one of the most expensive cities in the world, but they can't afford to live in it -- or, at least, not to the same standard they feel their parents' generation could."

They chose to live in one of the most expensive cities in the world and then complain about not being able to afford it. I can't afford to live in Silicon Valley... so I don't live there.

Chan Ka-yan, a 28-year-old administrator at a non-profit organization, shared a relatively cheap apartment with two flatmates after she graduated and started working. But then, her flatmates left Hong Kong, and she had to find a new place on her own.

Maybe she should have left too.

 

[Chuckanut]

The current younger generation can get 30 year home mortgages at low rates I never dreamed of when I was their age. It's not all bad for them.

As far as the national debt, well.... it's the elephant in the room that nobody talks about. Why is that? I have my ideas. Let's just say there is plenty of blame to go around.

 

[LRDave]

The shifting winds will lead to upheaval at some point.

Every historian will roll out the old trope: "History doesn't repeat itself, but it rhymes..."

I am not quite sure why the folks at the top in this country can't see that 2020 might rhyme with 1789 or 1917, for instance.....

 

[pj.mask]

The current younger generation can get 30 year home mortgages at low rates I never dreamed of when I was their age. It's not all bad for them.

As far as the national debt, well.... it's the elephant in the room that nobody talks about. Why is that? I have my ideas. Let's just say there is plenty of blame to go around.

Interest rates impact house price. Low interest tends to mean high price (monthly payment being more consistent).

That means more money required for down payment with similar monthly payments.

When half of politicians are unrealistically idealistic and the other half are liars.. wasn’t the last balanced budget with Clinton?

 

[AnonEMouse]

They chose to live in one of the most expensive cities in the world and then complain about not being able to afford it. I can't afford to live in Silicon Valley... so I don't live there.

Maybe she should have left too.

Another article mentioned there is record high applications from Hong Kongers to emigrate (mostly to Canada and Australia). But it's not as easy as just packing up the van and driving from California to Texas. Those with the means are packing up and leaving. Those without just have to suffer...and maybe protest.

Even in the US, wages have stagnated and home prices have jumped. Good for those whose assets have appreciated. Not so good for those looking to enter the market. There are areas with low house prices (e.g., Detroit), but those generally don't have employment prospects. If they did people would flock to them, increasing the prices of the local real estate in the process.