<p>I think keeping up with neighbors/friends is more wide spread than used to. They all own the same thing often lacking individuality. Just look at everyone’s kitchen renovation. A bit like going to an Ivy. It matters less if it’s a fit for you. There’s the wow factor. </p>
<p>^I agree, and I see this with younger people where I work all the time. The nice cars, expensive handbags, brand-new houses with the requisite granite/stainless kitchens and far more space than they need–somehow they see this as their “right” and not a luxury that has to be earned.</p>
<p>"My wife has some employees who live near us, many of whom are in single-earner households. They are well-paid, and my wife knows what they make (assuming no inheritance or trusts). Sometimes we will happen to drive by their home and see a renovation in progress, new cars in the driveway, my wife will hear of vacation plans, knows that their kids will be heading to college soon, etc., and she asks me, “how in the world can they manage that?”</p>
<p>The answer for some of them is that they can’t. A few times she has had to lay off (or fire) some of them. They have no cushion. When the severance runs out, unless they get a new job quickly, you see their house on the market. We now (callously, but semi-accurately) refer to the lifestyle as “two checks from homeless.”"</p>
<p>This is EXACTLY what I mean. These people lived AT their (well-paid) means - so when there is an unexpected expense or job loss, they are out of luck. But they lived for the moment, with the renovations, new cars, etc. because “why wait til you’re 80”. They could have been smarter and lived somewhat below their means. No one stopped them. </p>
<p>But you know, my neighbor has a new car and a better kitchen and just went to Maui and blah blah blah. </p>
<p>I am pleased my oldest is maxing out 401k and has a dedicated savings. I think she’s gotten it up to six months emergency fund. That was her goal. </p>
<p>She does spend on clothes, but she does it wisely and has a great closet full of well thought out pieces. T shirts she buys at target. Etc…</p>
<p>I guess we just have to take the time to teach our kids about money the way we teach them about anything. </p>
<p>“We are lucky enough to be able to pay for college and a cushy life. We know that we’re lucky, and luck can change. An emergency fund was a necessity long before the cushy purchases.”</p>
<p>Yes, yes. And you can best build up such an emergency fund if you – wait for it – live below your means. </p>
<p>"think keeping up with neighbors/friends is more wide spread than used to. "</p>
<p>I don’t think this is new. People have always been like this. It’s a certain way of thinking. </p>
<p>No one is saying it is new or never happened before. If it was localized and not so visible it doesn’t affect the society in general. There are always outliers and it doesn’t become an issue as far as they remain outliers. If however it becomes more common and they become vocal and noticeable, it is an issue. I see luxury goods more often at a less expected place. It’s just an impression but shouldn’t be hard to verify. One could look at sales figures of Tiffany, Mecerdes, the size of new houses, etc.</p>
<p>I do think the materialism and entitlement of the younger generation has increased (yeah, I know–I sound really old). When we were in our 20s we lived in crappy apartments in questionable neighborhoods. We drove old cars and only ate out at divey restaurants. Now some kids are living better in college student housing than people who actually work for a living. </p>
<p>I “see luxury goods more often at a less expected place. It’s just an impression but shouldn’t be hard to verify. One could look at sales figures of Tiffany, Mecerdes, the size of new houses, etc.”</p>
<p>I guess I’d say that there have always been trendy, status items; the specific brands change over time. Tiffany’s trajectory has little to do with that; something loses cachet if it’s seen around too often. </p>
<p>If not Tiffany, I am sure there are other measures one can take to verify the impression. Again, no one is saying this is new. Just more common.</p>
<p>I wonder if it is a natural outgrowth of having children later?</p>
<p>We had ours young and by the time we were making real money we already had kids and so our saving pattern was there and we never had much disposable income until we already had a kind of life where we needed or wanted to think about it. (That said, we’ve also been incredibly fortunate to be interested in things that were monetarily valued, careerwise, whereas some people have other kinds of careers, no less valuable, just less well paid.)</p>
<p>I’ve noticed my daughter, who really could afford to live in the high rent district is not because her friends aren’t. So, living in the neighborhood where her friends are living is affording her the option to save a lot. She can’t really conspicuously spend because that would just be obnoxious. They seem to be living how we did as young twenties, backyard barbeques, safe but inexpensive neighborhood, she and her fiance only bother to have the one car. </p>
<p>It’s a fun way to live, at least the way I recall it. </p>
<p>If they were to go from this to kids, they probably wouldn’t spend a lot, but if they go for the next ten to 15 years without kids, I could see their habits getting more expensive.</p>
<p>Just a thought.</p>
<p>Edited to add: Another reason I think it might have to do with having kids later is that I see a lot of people worried about retirement and college tuition. Ours will both be out of school before we are fifty. Even though we have been lucky enough to not have to worry about funds, saving for retirement would not be very dire for us at this point in time as long as we were tagging up the basics.</p>
<p>I totally get buying luxury items that are under the radar.
But to go back to wealthy people not feeling satisfied, that is something they have to work out with themselves.
If they have friends and family, a good job with health care, a safe place to live, and enough free time & money to take a relaxing break when they need it- they sound pretty well off to me.</p>
<p>YK, the trend of twenty something living at home to save $ on rent doesn’t seem as silly to me as it used to. Should my kids wind up finding jobs here in Chicago, I’m open to it so they can build up a little nest egg. </p>
<p>Some people would rather live the high life for a short time than never live the high life. Some people also think things will work out and they will eventually be able to afford the high life.</p>
<p>Investors do this also. Most biotech companies never develop a drug that comes to market. Many technology companies will never be profitable. What is it? Ninety percent of restaurants close? </p>
<p>Yet. Investors fund these these businesses hoping to beat the odds. They are willing to invest at pie in the sky valuations so they can have that one chance to own shares in the next Amgen. The next Google. The next McDonalds. </p>
<p>And sometimes…just enough times…the investors win. Gilead Sciences, Facebook, Chipotle are created. </p>
<p>So the game continues. </p>
<p>This is human nature and these discussions are going to go on forever. I enjoy the discussions. Immediate gratification vs delayed gratification. Spenders vs savers. </p>
<p>I am a saver. I try to understand the spender’s mentality, i used to think the savers were superior. Instead, maybe savers are just different. </p>
<p>I hear stories like the guy who lives in a $3 million home and his business crumbled. He hasn’t paid his mortgage for 6 years yet he hadn’t been kicked out of his house. He also lived in the house for many years previously. Even when his business was going well, he could not afford that house. </p>
<p>Still, he has lived in a $3 million house with views of SF and the Golden Gate Bridge for maybe 10 years. Not too many people get to do that and for him, that is what he wanted in life.</p>
<p>I am amazed. Somebody will work for 12 years. 12 years. Just for a chance to swim in the Olympics in a two minute race. They may not make it. The odds are against them. Almost nobody makes it. Yet…people are out there trying. </p>
<p>For some people, that $3 million house is their Olympics. They will take their 2 minutes living in that house…even if it is only two minutes.</p>
<p>
</p>
<p>Well, the Europeans with money have known this forever. If my kids lived around here, they would be welcome to live with us as long as they wanted. I agree with that. </p>
<p>This is starting to sound like a gossip thread. All those people, buying things they can’t afford, just to show off to others. Really, how pathetic. But not us, WE live below our means. We are so much better than those people.</p>
<p>I guess I just don’t care what other people have, and like to make decisions that are right for my own family. So I don’t sit around thinking about what possessions others have and patting myself on the back for not buying them.</p>
<p>Yes, we can easily afford our kids college tuition. But it’s still a lot of money, and it’s too much money. College costs are way too high, and I have some doubt that it is fully worth it. However, he’s happy, so we keep paying. But we are counting down the payments, 15 left.</p>
<p>I can’t imagine caring about what someone else does with their money, unless I had to support them. In that case, it is my business.</p>
<p>I agree college costs too much money. Ten years ago I came on CC to find colleges for the non drinkers because I thought my daughter was a non drinker. Lol</p>
<p>I also complained about college costs. College can cost $40,000 a year? :)</p>
<p>“This is human nature and these discussions are going to go on forever. I enjoy the discussions. Immediate gratification vs delayed gratification. Spenders vs savers.”</p>
<p>This is the dilemma that many of us saving for retirement or in retirement have: living in the present or worrying about the future. It is a delicate balance. You want to save enough for retirement so you don 't end up destitute but you also want to enjoy life as you only go this way once. It gets harder as you age to do many things and it is important if you have goals, bucket lists etc. to do them while you’re still healthy. You never know what is going to happen tomorrow. When you see people your age or younger dying, you begin to appreciate this more.</p>
<p>Doct, love your post.</p>
<p>
</p>
<p>I’ve thought about that too–not just for their first jobs but for grad school. We are in a college town and it surprises me how many of my friends’ kids who have grown up here and gone away to college come back for grad school but live in expensive apartments downtown rather than at home (and most of them are in spitting distance of the university–an easy walk or bike or bus ride). Granted, it’s not always the most fun having adult children under the roof, but if it helps achieve the greater good I would certainly put up with the challenges for a few years.</p>