From The Telegraph:
Baby boomers shouldn’t feel guilty about being better-off than younger generations, because people aged over 50 today saved harder and spent less when they were young than is the case today. That’s the conclusion of analysis of more than 2,000 people by the Chartered Insurance Institute (CII).
The study acknowledges that baby boomers – or those born within 20 years of the end of World War II – were fortunate to enjoy easy mortgage availability and decades of house price inflation plus final salary or defined benefit pensions denied to most young adults today.
As a result, about 80pc of the Britain's net personal wealth of £6.7trn or £6,700bn is owned by people aged over 50 while younger folk often have no savings, substantial debts and little hope of becoming homeowners any time soon. The average age of first-time buyers is now 37 or about 10 years later than two decades ago.
But the CII claims that ‘generation rent’ are partly to blame for their own misfortune because many fail to follow their elders’ example by starting to save early. They have come to expect regular foreign holidays, among other treats once regarded as luxuries, often funded by credit cards taken out earlier than their parents did.
That is all complete hogwash. As I said over at HPC, it is pointless comparing living standards now with what they were at any mythical time in the past, fifty years ago, people did not fly abroad on holiday or all have colour TVs and iPods and so on, but nowadays they do.
People who were young fifty years ago didn't nobly forego these fripperies because they were so thrifty and hard working, these fripperies simply didn't exist. And nowadays everybody spends money on these things, young and old alike. That does make today's young people feckless and wreckless and the authors of their own misfortune.
In turn, living standards fifty years ago were vastly higher than they had been fifty years before that. Fifty years ago, at least everybody had mains electricity, nearly everybody had a gas or electric cooker and a fridge, most of them had a black and white telly and a gramophone, and plenty already had a car or central heating. So from the point of view of somebody born in 1900, those born in 1950 lived in the lap of luxury.
And no doubt in future , they'll invent new stuff and manufactured goods will get ever cheaper and in another fifty years time today's young people will be playing the same card and saying "Ee by gum, in my day an iPod cost half a week's wages, nowadays you get them free with a packet of Corn Flakes."
If you're a Baby Boomer and you feel aggrieved when reading this, then that proves that you have a computer and internet access, probably broadband, which costs you under £20 a month. They didn't have that fifty years ago, did they? And as we well know, having broadband increased the value of your house by thousands of pounds, because nowadays it's a must-have utility, despite it was somebody else who dug up the pavements and did the cabling.
What it really boils down to is that fifty years ago, you could buy a house for four or five times the cost of a fairly crap original Mini car, and nowadays, a house costs fifteen or twenty times as much as a vastly superior modern Mini. It's land prices which make all the difference and which have transferred so much wealth from young to old, it's land values which make up the bulk of that £6.7 trillion supposedly hard earned net personal wealth.
Well, it's land values and decades of government deficit spending, which was just the Baby Boomers spending on young people's credit cards (to paraphrase George Osborne).
Another one bites the dust
1 hour ago
18 comments:
well of course, if you were looking for semi-truck insurance the first place you would go was to the total w*nker who sought business by spammimg people's blog's !
Another tidbit from the article:
the younger generation is more likely to spend money on a meal out rather than put it in their pension pot, as their older counterparts might have done.
Does baby-boomers on average actually have any substantial savings outside of housing and defined benefits? It may not be representative, but most of the soon-to-retired people I know regard their houses as their pension pot, and mortgage equity withdrawal as actual withdrawals...
-Kj
I'm over fifty. I managed to spend myself into penury in my twenties and lost everything. It took quite some time to get back from there.
The fiscally useless have always existed. I was one. I suppose the difference now is that I learned from my mistakes and didn't expect anyone else to sort out the mess I'd made.
It wasn't the fault of those banks who loaned me more than I could afford. It was my fault for accepting it.
The new generation don't seem to think that way.
"The new generation don't seem to think that way."
No, because that's how they've been brought up. Ironically, the one thing you can blame the parents for, is instilling the belief that it's always someone else who is to blame.
Anon 17.51, your comment makes a bit less sense now that I've deleted the spam, but thanks anyway.
Kj "Do baby-boomers on average actually have any substantial savings outside of housing and defined benefits?"
No of course not. It's all propaganda and lies.
LI, I have always been very careful about getting into debt, and never have done apart from mortgages, which I have always paid off ASAP. But I know plenty of people the same age as me who are quite reckless, or were quite reckless when they were younger.
We constantly read sob stories in the Daily Mail about older people "faced with the spectre of repossession" and so on.
I don't think that younger people are in any way more irresponsible than older people, and certainly no more irresponsible that older people were when they were young themselves. It's just that there were fewer opportunities for being irresponsible decades ago, it wasn't so easy to get a store card or a credit card, there was no such thing as a 125% mortgage etc.
B, good retort.
Baby boomers shouldn’t feel guilty about being better-off than younger generations, because people aged over 50 today saved harder and spent less when they were young than is the case today.
That's true - they did. It's just that the banker/globalist thing hadn't got into full swing by then.
Remind me again when the pound became a fully free floating fiat currency, and when the Town and Country Planning Act came into force?
Ah, that would be 1971 and 1947 respectively. So supply was restricted for about 20 years, and then the politicians were free to print money. Which they have done ever since.
Hmm, I wonder why the price of something denominated in a rapidly inflating money supply, and whose production was restricted, suddenly started rising so rapidly, when it hadn't for decades, if not centuries previously?
JH, S, yes, the bankers and pol's are keen on people mortgaging themselves up to the hilt and maxing out on credit cards nowadays, it is all part of the Home-Owner-Ist plan.
S, the first planning act was in 1909 or thereabouts, the 1947 one wasn't that important. What's important is actual numbers of houses built.
Unsurpringly, the number of houses being built fell suddenly once owner-occupation levels hit 60% or so and Home-Owner-Ism and its inevitable offshoot NIMBYism started to emerge as a major political force. I've covered that before.
But you are still looking at the 'how' and not the 'why', moreover you have to look at the 'who' behind all this, to wit, the Home-Owner-Ists (bankers, NIMBYs, politicians and their foot soldiers, the owner occupiers) who are of course mainly Baby Boomers.
Yup. Bonds are mortgages for every tax payer.
MW
Supply of housing is a remote and proximate cause. There are a million empty homes. Build another million and there will be 2 million empty homes. It is a monopoly. Supply is prohibited from meeting demand by it. This is so obvious yet even you seem to be captured by that false theory too. Incredible. But why?
Speculation in land goes far deeper. Ask Sobers about how recessions are better than growth. Hes a smart guy. We need more leaders like him.
Private property in land is at the root. Ask Sobers about how slavery is better than freedom. Everyone is complicit in that. Sobers, banks, homeowners, the church, corporations, charities, you, me.
Why are you muddling root cause up with things that would disappear if that root cause where abolished?
RS, can you point out to me where in the post I talked about 'supply of housing'?
I merely pointed out to Sobers that - as a matter of fact - all these planning acts are irrelevant, the big milestone was when 60% of households became owner-occupiers, at which stage Home-Owner-Ism really kicked in. The severe restrictions on new construction is merely one symptom of this.
I'm not muddling root causes with anything, the root cause is that a certain group of people want to enrich themselves at everybody else's expense, and these people have discovered that the cult of 'land 'ownership' is a politically popular way of doing it.
Hi Mark. Merry Christmas. I am a regular reader of your blog, and usually sympathetic to your views. I am also an owner occupier and a baby boomer (born 1947). I think, rather than compare the cost of a house to the price of a car, it would be more relevant to compare the price of a house to average earnings, or perhaps average after tax/NI earnings. I suspect (but do not know for sure) you will find the "affordability" factor has stayed pretty constant during the period 1967 to present. There are more goodies to desire now of course and the acquisition of same all impact on people "minimum" required income. Perhaps I had a particularly impoverished childhood, but we did not have TV until 1959, a car until 1961, we NEVER had a (landline) telephone at home, I could go on, but I do agree there is little point in harking to an earlier "golden" past, like some Hovis advert.
Ken:, I am a late baby boomer and have done very well out of Home-Owner-Ism in one way or another, i know of what I speak.
"I think, rather than compare the cost of a house to the price of a car, it would be more relevant to compare the price of a house to average earnings"
Fair point, basically house prices have doubled relative to wages, the bulk of that over the past fifteen years. It's not a coincidence that there was a rapid increase in the number of owner-occupiers until about 1980, it peaked after they started giving away the council houses and is now falling again.
"we did not have TV until 1959, a car until 1961"
That was fifty years ago, which sort of proves my point. At the time your family was probably slightly ahead of the pack.
I think the turning point was around the introduction of the first credit card. It was then that the last remnants of social disapproval of debt were finally trounced by the propaganda from the moneylenders. I remember the slogan "Take the waiting out of wanting" and the first credit cards arriving unsolicited in the post. My mother cut hers in half and threw it away, but she was part of the generation that grew up in the war.
Apologies if anyone has said or hinted at this already but, another factor which from memory first arrived in a big way in the 1970's (if memory serves) was a change in attitude from "the lenders" .. it was (or had) been generally accepted that until you had shown, by assiduous saving with the lender who you hoped would give you a mortgage, that you warranted being afforded the tag of being probably a safe risk, getting a mortgage was quite difficult, and ditto any sort of large loan. However, from the 70's it seemed that the focus switched from identifying peole who might be safely "lent to" and instead targetting those who already had debt, a mortgage in particular, with offers of more. If you had a mortgage lenders seemed to start falling over themselves to lend you even more, and always pointed out that "because you [ahem] 'owned a house - which would increase in value' you could carry a big debt burden [they never called it that, that bluntly] with ease - so have a credit card, have a loan .... go on spoil yourself and live a bit !
I'm in my early thirties, and probably in the "they" group mentioned here. I wasn't reckless earlier, but I did spend every penny I earned, and didn't have much to show for in my mid-twenties, but no significant debt either, I've always earned my way. Then I settled down and got better financial sense. Isn't that normally how it goes? I really can't speak for my generation, and find that there is as many attitudes to debts and savings as there is individuals. Some people are idiots, some were 30 years ago too. B: credit cards themselves may not have the same stigma attached as before, but there is still disapproval of debt.
-Kj
B, Anon 19.25. Yes, borrowing has become gradually easier over the decades, with the most remarkable relaxations in recent times (the last two years excepted). So yes, young people are borrowing more now than young people used to do, but old people are borrowing just as much as young people, and they would have borrowed just as much when they were young if they'd had the chance.
Kj, exactly. Most of the supposedly old and wise were probably young and stupid once.
Post a Comment