Recent musing of newly wed Millennial couple complaining about $$$

[ohai]

My point is that housing is the #1, most expensive, most exorbitant purchase for even people who otherwise purport to be “reasonable”. You can’t say you’re frugal because you own no Porsches, but yet have a house that is 10x your income.

[krnyc2008]

@Matt_Likes_Analysis

its obviously a combination.

there are many people making $300k with a $2M house who live comfortably because they don’t go out every night, don’t buy a mercedes or high end audi or bmw when a vw or nissan will do just fine, and don’t spend on things they can get for next to free like coffee, tea and booze at establishments. also, organic v not organic. kids v no kids. these purely discretionary purchases can easily eat up half of your discretionary income or more.

it is more complicated than ‘your house is too big’. i agree it is part of it but almost everyone i know spends an extra $5k on annual car costs than they need to. this alone could provide you with greater than $100,000 more house.

It would be tight unless you put a huge down payment

[Marathon_runner]

I take it these are friends or acquaintances of yours? What do they do for a living?

[Destroyer_of_Worlds]

@el\_macca17

One of the worrying aspects is that in areas where real estate as appreciated for the past 10 years, people assume it’s always going to be a rising price environment - so they purchase house to the full extent of their financial ability because a) they may not be able to afford anything similar 5 years down the line, and b) because they theoretically will not lose money on their purchase. Especially common in Toronto where people have been borrowing more to buy property and saying they’ll cover the difference because “it’s going to go up anyway”

Even more worrisome as conversations like this were exactly the ones being had between 2005 and 2008, and no one learned the lesson a decade after the fact. Here we go again.

[AbrahamIsaac]

Interesting conversation gentlemen. Please carry on

[GorillaNerd]

Worst case they default on the loan and live rent free for a year

[whatsyourgovt]

all our credit was hacked this morning anyway - best defense for unwanted identity theft is to have a shity online identity (i.e bad credit). I guess Millennials had it right all along

[roberto]

I am to the point where, when I hear these conversations, I just get worried that the financially inept masses are so overwhelming that the system will come crashing down before I can live to benefit from the savings/investments I am dutifully building.

[hpracing007]

We need debtors prisons.

[el_macca17]

@Destroyer_of_Worlds

@el\_macca17

One of the worrying aspects is that in areas where real estate as appreciated for the past 10 years, people assume it’s always going to be a rising price environment - so they purchase house to the full extent of their financial ability because a) they may not be able to afford anything similar 5 years down the line, and b) because they theoretically will not lose money on their purchase. Especially common in Toronto where people have been borrowing more to buy property and saying they’ll cover the difference because “it’s going to go up anyway”

Even more worrisome as conversations like this were exactly the ones being had between 2005 and 2008, and no one learned the lesson a decade after the fact. Here we go again.

In a sense, Toronto has never seen the long cold winter because our housing didn’t crash during those years - we clearly haven’t learned the lesson from our southern neighbours.

[hei.so]

@thanatos0320

I can only imagine how our kids are going to be when they grow up. Kids are now getting cellphones at 8 years old…

If I have kids, I’ll make sure to pay with cash at restaurants so they don’t see the credit card as some device that contains infinite amounts of money.

@el\_macca17

One of the worrying aspects is that in areas where real estate as appreciated for the past 10 years, people assume it’s always going to be a rising price environment - so they purchase house to the full extent of their financial ability because a) they may not be able to afford anything similar 5 years down the line, and b) because they theoretically will not lose money on their purchase. Especially common in Toronto where people have been borrowing more to buy property and saying they’ll cover the difference because “it’s going to go up anyway”

My friend recently just put less than 20% down on a condo in North York. I told him about mortgage insurance and he said “mortage insurance isn’t always a bad thing”. He’s a teacher but his job is in no way secure. *Facepalm.

[higgmond]

^ I’d like to see his list of when mortgage insurance isn’t a bad thing.

[LBriscoe]

@hpracing007

We need debtors prisons.

Nope, just need to stop the easy extension of credit by setting up an easy path to default on unsecured credit.

[GorillaNerd]

my credit card pay 2% cash back on everything! i have mint so i keep track of all my spending like crazy. i check it before i sleep all the time. lol

i dont carry that much cash either, i have this banging phone wallet that can carry credit card, license, as well as 2 bills, so i always have a 20 on it. when i go running, i can also fit a key on top of all that. im really just waiting on the day, where my phone can serve as the key to my car/house.

@Matt_Likes_Analysis

i blame it on credit card culture. nobody uses cash anymore. i don’t. why would i carry cash. i get paid to use cards.

the problem with credit card culture is people spend $5, $10, $20, $50 without even thinking about it. so they do it a few thousand times a year and go, hey where’d that $50,000 in discretionary income go?

[ohai]

With mortgage insurance, you just pay a higher interest rate in return for having to pay a lower down payment, right? I guess if you have a really high opportunity cost for that capital somehow, it might make sense? I doubt that it is priced in the borrower’s favor of course.

In any case, if you can only afford the house with this sort of arrangement, it might be better to not buy that house…

[igor555]

but its a nice house and all the cool rich people live there and it will keep going up

[analystdude]

yeah because duh this time is different

[Imperfect_hedge]

@Nerdyblop

im really just waiting on the day, where my phone can serve as the key to my car/house.

With one of those bluetooth door locks and newer cars, it’s already possible to use your phone as a door key and car key. Our new car can be started from anywhere using an app on the phone – not sure I like that idea.

[thanatos0320]

@Imperfect_hedge

@Nerdyblop

im really just waiting on the day, where my phone can serve as the key to my car/house.

With one of those bluetooth door locks and newer cars, it’s already possible to use your phone as a door key and car key. Our new car can be started from anywhere using an app on the phone – not sure I like that idea.

You don’t even need bluetooth. I can unlock my car from anywhere in the world, check my oil, and my tire pressure. Newer cars come with a free onstar app that will allow you to do this stuff from your phone.

[frisian]

Free advice for those AF youngsters who haven’t settled down and gotten married…

if having children is part of your life plan, start saving now.