You would have to demonstrate to me that the majority of those loans went to boomers. I have serious doubts that is true given that most boomers already owned homes by then. Of course there were 2nd mortgages, etc. But even if true, I find that argument entirely unpersuasive.
If I go to take out a loan and the bank tells me they are giving me a rate that is less that what they are charged by the Fed, do you really think I am going to jump up from the table and passionately say “No, I know you cannot afford that and you will be ruining the economy. You must charge me more!!” Of course not. It has always been the responsibility of the banks to be prudent in their lending practices and to assess the risk. Besides, how does Joe Schmo, boomer or millennial, have any idea what the big picture of all this looks like? The banks and the Fed are in a vastly superior position to see that.
Sure, you can say that as an individual I should know not to spend more than a certain percentage of my income on my house, but again the banks always had that as a rule of lending. So if the bank is telling you it is OK, it seems more than a bit absurd to shift that blame to the borrower to any great extent. Maybe a few percent. But not only does that still spread the blame to the generations after boomers, contrary to your original statement, but it shifts it much more to the people doling out the money, IMO.
So back to topic… my s’s live and work in the same locale. Do the same thing. But one s happened to be in the right place at the right time and, from how it currently appears, will be better off financially than the other. The will both be fine, but one can afford to own property (house/condo) and the other cannot.
Interesting question. On both sides of our family there is a fairly similar trajectory:
Our families immigrated to the US mostly in the 1700’s and early 1800’s. Those first immigrants were generally able to buy land or open businesses. By our grandparents’ generations (born in the 1890’s), there was a physician, a successful real estate developer, and two businessmen. Three of our grandmothers finished high school, one went on to train to be a nurse. In our parents’ generation both of our fathers were physicians, one mom was a teacher, and the other completed two years of college. (Our uncles and aunts include a physician, two nurses, an engineer, and three very successful busnessmen.) in our generation my husband is a physician, I was a teacher, with an uncompleted Master’s degree. Our siblings include a physician, one person with a PhD, two with Masters degrees, two with bachelors degrees, and one with a high school degree. All are successful, except for one who is too smart for his own good and couldn’t stick with any college classes because he thought he knew more than the profs.
It is too early to tell with my kids’ and their cousins’ generation. I can see a few cousins falling off the edges of the middle class, the rest are a mixed bag. They are all intelligent. They do have different perspectives on “drive”, and/or “success” or haven’t fully blossomed yet. Of the adult cousins there is a lawyer, a social worker, a teacher, a nursing home worker, one business person, one 22 year old surfing her Mom’s couch doing nothing, one physically disabled man who has some college credits. The remaining 10 cousins are still in college or are younger.
My own kids are stable, generally happy, have good relationships with friends and future spouses, and have done well in school. One will probably out-earn us, one probably won’t (unless he jumps into working for his future father-in-law’s very successful business) and one is just a college freshman. As long as they can support themselves and are generally happy in ther careers and personal lives, that’s all that matters.
One is doing about the same as us, another should be doing better, but that will be determined in some 3-4 years as now she is a poor first year resident.
Our son, who wants to be an actor or playwright, has already told us, “Just so you know, I’m not actually going to be very well off.” Our daughter isn’t sure what she wants to do. We will be sure to have a well-ventilated, sunny basement in our retirement house.
I don’t want them living with us because I want them to learn to be independent adults. As long as their basic needs are met and they have safe transportation and decent health insurance, I’m happy with however much they make.
From personal experience in my family, I don’t think living under the same roof as your parents when you’re an adult is good for either group. We had family members that would move from family member to family member’s home, roosting until they were kicked out. For me it’s a sign that you do not have your syit together when you can’t maintain your own household, however humble it may be.
My standard of living is way beyond what I grew up with. i would say all my siblings have done well. My Mom and StepDad supported us and we didn’t feel like we went without but we didn’t have extras and my Mom worked.
I doubt our children will live the same life they grew up with. 2 are working and doing well but they aren’t in careers where they will make 6 figures. Living in Many parts of Ca is expensive and I don’t see them moving to a less expensive area of the country. The 3rd I could see leaving Ca for a less expensive coat of living area. I don’t see her making a high income. The only hope of home ownership will be if we help them out.
Our middle child plans to be a successful entrepreneur, so our hope is that he can employ his sibs so they all have a nice standard of living. One can hope!
Pretty sad that so many can’t calculate prices–scary! I guess that’s one reason some store are calculating price per ounce or similar for customers on their signage?
Well, I have a degree in math and I surely don’t want to stand there and calculate price per ounce for every item in the store. It’s a convenience for all customers.
Our oldest makes more than half of what husband and I make combined. I don’t think he has as much in stocks and savings and he doesn’t own a house, but I anticipate he’ll have more networth than we do soon. He just doesn’t spend much of his income. Younger son is frugal, but has not earned much. He’s planning on joining the Navy as an officer. It looks like he’ll have a decent starting salary with great benefits.
When I was in college, we had a statistics course that was required for social sciences. One of the people in our class was a college senior. It took awhile to explain to her and demonstrate the connection between decimals, fractions and percentages. It was great that eventually, she understood and went on to ace the course. I’m so glad she took it with me.
I have no idea what our D will make – suspect she may have to train for another career, as cinema is a pretty iffy field in terms of employment, but who knows? First, we have to get her healthy, and who knows when that will happen. I’m very curious about S’s progression in his career–fascinating to date. Unlike H’s job, he’s been counseled that he’s supposed to get a new job/transfer every 2-3 years. He’s transferred once so far and is due for a 2nd transfer soon. He’s supposed to get raise and promotion with each transfer.
There’s a lot more to SES than just money. I make a fraction of what my father made, but all he did was work, and he admitted to me towards the end of his life that he was never able to enjoy anything that involved spending money. Sometimes I feel guilty that I can’t afford to provide some of the things that I had as a kid. A friend of mine and I laugh about how we didn’t know there was such a think as money when we were kids because we would just walk around town and get whatever we wanted and say “Charge it to Daddy.”
With that said, I really don’t feel my socio-economic level is any lower. In some ways we have a better lifestyle; no daily maid, though. Our house is nicer. It’s more nicely furnished, in part due to technology, in part because my wife has better taste than my mother, in part because I’ve worked at acquiring nice things, and in part because we’re just willing to spend on it. We’ve been to Europe a gillion times, and while it’s never cheap, I scrounge around to make it cheap-er. In just over a week I’m driving my son and a friend 10 hours to Chicago so we can take a $625 round-trip flight to Germany; we’re going to stay in cheap hostels. Our family of four once drove about 12 hours to take a $260 round-trip flight to Europe. So we do a lot of things, but we try to do them as cheaply as we can. And I’ve spent more time encouraging my children academically; for whatever reason my parents never did. (The friend I mentioned above says he doesn’t remember his parents ever telling him that it was important for him to do well in school).
I’ve had a lot of fun tracing my family tree with Ancestry.com, and if I follow my male line back to the 1600s there are nine of us; 10 counting my son. I would say that our socio-economic status is pretty static, in that no one is fabulously wealthy, yet all are somewhat prosperous for their time. In other words, they weren’t the upper crust, but rather the layer just a notch or two below it. A number of them suffered real adversity and clawed their way out of it. My grandfather was establishing himself as a bona fide planter when the Depression hit. He had to turn everything over to a childless brother and was lucky to get the position of running the county home, or Poor House, as it was called. He slowly reestablished himself, but he clawed hard. My great-grandfather had to deal with war and Reconstruction. My great-great-grandfather died young, leaving a widow with nine children; she dealt with it by selling everything and moving from North Carolina to Mississippi, where she was able to buy each child a section of land.
I think a real chance in socio-economic status comes from suffering the types of adversity I’ve described above and not being able or willing to claw your way through it. I think sometimes when you look at the efforts expended by earlier generations it can encourage one to perhaps put forth a little more effort in one’s own life.
Who knows? Society, the economy, the marketplace and demands on workers are changing so rapidly, it’s impossible to say how various professionals will fare in the next 20 years.
My daughter is outearning me by a lot right now, but she’s seriously contemplating a PhD program. Given the uncertainty of research positions in the private sector, and the fact that only 1 out of 5 STEM PhDs get tenure track jobs, she may very well be in a lower socioeconomic bracket than her father, who has a humanities PhD. She will be educated. Will she have the earnings to match? Highly uncertain.
I wouldn’t rely on the store’s calculation of price per unit without verifying it myself as they also sometimes get it wrong and sometimes use it as a way to cheat customers as local authorities in NYC found with Whole Foods:
I was shopping in Bloomingdales for one of their major sales. It was 50% off with additional 25% off. I overheard few high school girls around me trying to figure out the price. I was thinking how they were going to do on their SAT.