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AdamoMucci

Boomers will never get it

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Having just posted in the Brighton thread here about 30 years of mad gainz it reminded me of a surprising conversation I had with my father this weekend.

For years I have been telling him how out of whack and unfair the gains are their generation experienced and I thought he knew what I was talking about given he is numerically literate and that his successful career was heavily weighted to the bean counting side of things.

Well this weekend he mentioned about how the boomers are viewed by the young. I thought little of it. Maybe an hour later we get talking about property prices due to flicking past one of those sh1t shows on TV. He said, I do not worry about gains, I just look at it that as long as the price has gone up by as much as I have spend on it I am happy.

I commented: That is why the young think the way they do about boomers. So as long as somebody else has to cover your depreciation costs you are happy.

Dad: I dont remember houses ever depreciating.

Me: Why did you spend £40k on this place when you moved in?

- Oh I thought you meant price depreciation. Yes I see what you mean.

 

At this point I forget all about it. 5 mins later he comes from the laptop..... "Oh you are right!"

Then says to my mum: Adamo is right you know! I have just checked cumulative inflation for X year period and it is 300%. We experienced an 800% gain in that time according to this HP index im looking at! I always just assumed the HPI reflected inflation!

 

 

So all these years that I have been talking about house prices, he has just been humouring me.

This is a financially literate person, numerically literate, career was heavily numbers orientated. Thought the HPI was about the same as general inflation. Some how did not do the 5 minutes of research before now.

Of course it is really just head in sand stuff. But if my father refuses to see it, none of the boomer generation will ever get it.

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10 minutes ago, AdamoMucci said:

Of course it is really just head in sand stuff. But if my father refuses to see it, none of the boomer generation will ever get it.

Interesting story. It doesn't jump out that he was purposely ignoring the data. He just made an early assumption and stuck to it, probably not in a malicious way.

I've had debates with relatives who think that low interest rates mean we have it better today. I have tried to illustrate why this is not the case, even showing the figures (in short, we'll never pay off our houses in the time frames they did) but in these cases they're wilfully obstinate. I think in reality there are people who don't want to see the problem because it is uncomfortable.

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Yep, my old man fully paid off the mortgage on an old 3 bed detached cottage in just 3 years, whilst working only 40 hours a week as a variety of butcher/milkman/petrol pump attendant... in the early 70s. Different world, can barely imagine it.

Edited by DarkHorseWaits-NoMore
typo's

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A house costs money to keep whilst living in it.......most older/boomer people will never spend their house their kids and/or grand kids will..........the only good thing about owning is there is no rent to pay, most pensions are not enough to cover rent anyway......other than that a £200k house or a £1m house still has a cost, four walls and a roof.......what it is worth is what others 'think' it is worth, might just as well be worth 1p......whilst living in it, it makes no difference what it is worth.....;) 

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9 minutes ago, AdamoMucci said:

 

Of course it is really just head in sand stuff. But if my father refuses to see it, none of the boomer generation will ever get it.

What tosh ?

You said it all your Dad’s a bean counter - the most unworldly wise of all the positions around the board room table in my experience. If not at that level just a biological adding machine soon to be defunct 

In fact I have seen a CEO go for the throat of an FD who said ‘I don’t care whether we make a profit or not , I am here to keep score like a Ref’

Your Dad refuses to get it because he is a tramlined thinking bean counter not because he is a boomer 

Thinking houses have only gone up with inflation is just plain ignorance - really nothing to do with him being a boomer ( although some do think like him because they too are ignorant )

 

 

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P*ssing in the wind. My father's favourite subject is the injustice of my elderly grandma having to pay care home fees (his inheritance) ...by way of context she is a millionaire on paper with a pension of £40k+ per year. Presumably the young should be taxed for it. Absolutely no comprehension of the insane inequality caused by HPI despite also being in finance. I cannot even argue about it these days, bored of it. I had a right simpleton do some plastering for me the other day telling me about his HPI success, went from Reading to the Midlands buying outright then traded up banking decent sums each time. Now doing odds and ends to pay for his 4 holidays a year...

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2 minutes ago, SillyBilly said:

P*ssing in the wind. My father's favourite subject is the injustice of my elderly grandma having to pay care home fees (his inheritance) ...by way of context she is a millionaire on paper with a pension of £40k+ per year. Presumably the young should be taxed for it. Absolutely no comprehension of the insane inequality caused by HPI despite also being in finance. I cannot even argue about it these days, bored of it. I had a right simpleton do some plastering for me the other day telling me about his HPI success, went from Reading to the Midlands buying outright then traded up banking decent sums each time. Now doing odds and ends to pay for his 4 holidays a year...

Also being in finance ...I rest my case m’lud

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On the whole people don't change their minds , they die off. Take communism in the old USSR, the old communists didn't change their minds...they grew old lost influence and died.

Old boomers sat on colossal gains are smug about it...people are greedy and selfish be in no doubt about that.

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42 minutes ago, Greg Bowman said:

What tosh ?

You said it all your Dad’s a bean counter - the most unworldly wise of all the positions around the board room table in my experience. If not at that level just a biological adding machine soon to be defunct 

In fact I have seen a CEO go for the throat of an FD who said ‘I don’t care whether we make a profit or not , I am here to keep score like a Ref’

Your Dad refuses to get it because he is a tramlined thinking bean counter not because he is a boomer 

Thinking houses have only gone up with inflation is just plain ignorance - really nothing to do with him being a boomer ( although some do think like him because they too are ignorant )

 

Heh. Well I may be somewhat biased of course and get defensive given who we are talking about, but he got it in an instant when he actually looked. I am just amazed that he had never taken the time to look, even when I had been going on about it. I prefer dugsbody's explanation above to yours. Although I still think there is a good element of not wanting to really know.

But it is difficult for me to imagine what the gains would "feel" like to people who have not looked at the numbers because I have followed the actual numbers for so long. Maybe it is one of those things where peoples intuition can be way off.

Either way, the boomers are never going to be on side. Not the ones with decent gains.

 

On a side note, now you mention it, he was indeed basically an FD and although his historical knowledge of the company was valuable and he for some reason became adept and involved with the legal sh1t involved with retail spaces, I agree it is difficult to see how someone in the future will ever be paid anything like what my father was paid for that sort of job. His role is surely fast becoming obsolete. EDIT: And on that technological advance, he tells me that when he first started out he had to do calculations on this mechanical thing with a handle. I think he means something like what is in the photo.

 

a99422c1831a5630e4e30336e1a72d1b.jpg

Edited by AdamoMucci

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While not wishing to tar every boomer with the same brush ...and I am sure there are a lot of really nice boomers who wish house prices would just come down...maybe...(renting boomers who can't afford to buy a house for example?)

but

Both times me and my family have been evicted it was a boomer that evicted us.

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So I work really really hard not to let it affect how I see things and not to be boomerist.

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Just to fly the flag of finance.... I have for years spent my time explaining to people how and why housing is overvalued. Some idiot boomer at work tried to twist things so it made me look like I'd changed my mind..... she seemed to think that everyone who owns a house thinks HPI is brilliant. Same person is also busy planning on selling up and p!ssing away as much as she can so she can avoid paying for a care home. This makes me want to vote for nothing in the way of adult social care. Anyway.... said boomer has at best a low level admin job and lives in a 4 bed detached. Fails to see how this wouldn't even be within her wildest dreams if she was setting out today. 

My view is houses are still way too expensive, but I also believe that TPTB would do everything they could to support prices, and that if they did start to fall the sheer level of priced out people we now have in the UK would likely underpin prices even if there were modest falls (talking about the South East and M4 corridor). 

The boomers are also the problem in more than one way.

They vote as a block (generally) and bribing them with HPI, free this and that, non means tested benefits (pensions, winter fuel) means the generation under them pay once for their overpriced hovel and again for their benefits. The cynic in me thinks that house prices are also high because it means people have to keep working and working to pay that mortgage, and in this way they cover the unfunded liabilities of the boomer via PAYE, and their care bills via high HPI. 

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Most Boomers (born 1945-1960ish) don't get it because (unless they are part of the small minority that piled into buy to let), the post-1996 house price inflation hasn't really affected them first hand either positively or negatively. They locked in lifetime housing costs before this, now it makes little difference whether house prices go up or down by 20% a year as they will still own one house. For them house price inflation is a non issue which is why even intelligent and numerate Boomers normally won't have spent 5 minutes googling house price indexes, never mind taking it a step further and calculating house price to wage ratios or understanding that wage inflation shrunk their mortgage principal in the 70s and 80s but this no longer happens for today's first time buyers.

The only way Boomers are likely to get it is if house prices start to have an effect on their lives, but given that most of them are home and dry with one paid off house how would that happen?

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25 minutes ago, Thorn said:

(renting boomers who can't afford to buy a house for example?

Guilty as charged. Being a priced out boomer is even worse than being a priced out millennial as you can't even capitulate and sign up for an insane 30 year mortgage. 

Think of it from the point of view of a "successful" boomer though. An imaginary guy who aged 25 gets a 45k mortgage on a 50k house. Slaves his guts out and forgoes lots of pleasures for 25 years.  He's paid roughly 90k for that house but now he owns it. 

Is it his fault that it's now got a valuation of 500k and he's made a paper profit? As we all know he is unlikely to cash out and realise those gainz. He just wanted to buy a house same as we all do. House prices have peaks and troughs and he bought in a trough. We're extremely unhappy because we're at a peak and we can't afford to do what he did. 

If there's a big trough coming up we will all pile in and 25 years from now people on the holonet will be hating on us for only having paid 200k for that lovely 25 million 3-bedder. 

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I think you are being a bit hard on your dad.

He held a view, you hold a different view. You put across your opposing view and your dad did what I think was exactly the right thing, rather than just dismissing your opinion, or even worse agreeing with you, he went off and researched the facts and then reached a conclusion. He changed his view based on new information that was now available to him.

We would live in a better world if more people could do that.

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For a lot of boomers their HPI is due to how clever they are, not due to luck.
Even if you show them cold hard facts they wont believe you, as your basically attacking their self worth.
If their greatest achievement is owning a house that others cant afford it must be down to how savvy they are.

Plus the other side is that they have basically been bribed with free houses, easy lives, full employment, big wage increases, fat pensions, in those situations why would you question any of it? the system is just dandy thank you very much. 

so basically:
1. HPI is self worth, their greatest achievement is owning a 350k house, calling it luck is to take away from them their self worth
2. Wilful ignorance, and 'im alright jack'

Thats more or less the crux of it. A generation who grew up in a simple world, where you go down the pub, and watch TV. No masses of free information like the millenials have. No reason to question, no reason to want anything more from life.

My parents just cant understand why i don't go on 4 holidays a year, why i have not just gone bought a house, dont understand why my older sister is also stuck living with her partners parents just like i am. Criticise me, meanwhile with their lovely £250,000 free money from a slight downsize from basically a national park mansion to a 4 bed detached, they are going on 4 holidays a year, their biggest moan is that neither me or my sister are 'getting on with life' as they would quite like to go to the next big event, or pop around for tea.

 

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49 minutes ago, AdamoMucci said:

 

Heh. Well I may be somewhat biased of course and get defensive given who we are talking about, but he got it in an instant when he actually looked. I am just amazed that he had never taken the time to look, even when I had been going on about it. I prefer dugsbody's explanation above to yours. Although I still think there is a good element of not wanting to really know.

But it is difficult for me to imagine what the gains would "feel" like to people who have not looked at the numbers because I have followed the actual numbers for so long. Maybe it is one of those things where peoples intuition can be way off.

Either way, the boomers are never going to be on side. Not the ones with decent gains.

 

On a side note, now you mention it, he was indeed basically an FD and although his historical knowledge of the company was valuable and he for some reason became adept and involved with the legal sh1t involved with retail spaces, I agree it is difficult to see how someone in the future will ever be paid anything like what my father was paid for that sort of job. His role is surely fast becoming obsolete. EDIT: And on that technological advance, he tells me that when he first started out he had to do calculations on this mechanical thing with a handle. I think he means something like what is in the photo.

 

a99422c1831a5630e4e30336e1a72d1b.jpg

I think I prefer Dugsbody’s reply as well - mine is well spiteful so apologies. Just we aren’t all nasty boomers like all millenials aren’t coffee drinking, iPad buying hipsters who just need to buckle down and buy that house !

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Also don't agree that FD level jobs are obsolete. Fully agree for excel jockies further down the food chain like GL and AR because I very regularly see them being offshored to "Krakow Center of Excellence" and such. 

A proper sensible FD though ought to be more than that they should be someone competent with actual finance and basically with their heads screwed on and x-ray vision to see through MSM and City ********. Kind of like the average HPC poster really... 

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17 minutes ago, Greg Bowman said:

I think I prefer Dugsbody’s reply as well - mine is well spiteful so apologies. Just we aren’t all nasty boomers like all millenials aren’t coffee drinking, iPad buying hipsters who just need to buckle down and buy that house !

No need to apologise; I was not offended. But thank you for the thought. And a generalisation about boomers of course. There is probably even the odd banker or estate agent out there that is a nice guy and who "gets it". Heh.

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2 hours ago, Dorkins said:

Most Boomers (born 1945-1960ish) don't get it because (unless they are part of the small minority that piled into buy to let), the post-1996 house price inflation hasn't really affected them first hand either positively or negatively. They locked in lifetime housing costs before this, now it makes little difference whether house prices go up or down by 20% a year as they will still own one house. For them house price inflation is a non issue which is why even intelligent and numerate Boomers normally won't have spent 5 minutes googling house price indexes, never mind taking it a step further and calculating house price to wage ratios or understanding that wage inflation shrunk their mortgage principal in the 70s and 80s but this no longer happens for today's first time buyers.

The only way Boomers are likely to get it is if house prices start to have an effect on their lives, but given that most of them are home and dry with one paid off house how would that happen?

Well analysed and to answer:

So, politically and economically for all of May's terrible faults as PM, in the GE 2017, her chosen solution to care costs for the elderly in the absence of proper funding was to essentially tax the HPI gains of baby-boomers as a fair means to pay for their care. Not all but many of them.

Anything of this nature or inheritance taxes will have the boomer's ears ***** up regarding house prices. Also many boomers are poor too so be careful in what we generalise too.

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12 minutes ago, Funn3r said:

Also don't agree that FD level jobs are obsolete. Fully agree for excel jockies further down the food chain like GL and AR because I very regularly see them being offshored to "Krakow Center of Excellence" and such. 

A proper sensible FD though ought to be more than that they should be someone competent with actual finance and basically with their heads screwed on and x-ray vision to see through MSM and City ********. Kind of like the average HPC poster really... 

I must admit I do not really have a great idea of what being an FD involves and I probably did him a disservice using the words bean counter. From chats over the years his role was certainly more involved than that. But still the basic theme I think is true. Look at that calculator above that my father used to use compared to where things are going to be in a few years with AI / machine learning etc. and further hardware advance. Mind blowing.

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30 minutes ago, jiltedjen said:

For a lot of boomers their HPI is due to how clever they are, not due to luck.
Even if you show them cold hard facts they wont believe you, as your basically attacking their self worth.
If their greatest achievement is owning a house that others cant afford it must be down to how savvy they are.

Plus the other side is that they have basically been bribed with free houses, easy lives, full employment, big wage increases, fat pensions, in those situations why would you question any of it? the system is just dandy thank you very much. 

so basically:
1. HPI is self worth, their greatest achievement is owning a 350k house, calling it luck is to take away from them their self worth
2. Wilful ignorance, and 'im alright jack'

Thats more or less the crux of it. A generation who grew up in a simple world, where you go down the pub, and watch TV. No masses of free information like the millenials have. No reason to question, no reason to want anything more from life.

My parents just cant understand why i don't go on 4 holidays a year, why i have not just gone bought a house, dont understand why my older sister is also stuck living with her partners parents just like i am. Criticise me, meanwhile with their lovely £250,000 free money from a slight downsize from basically a national park mansion to a 4 bed detached, they are going on 4 holidays a year, their biggest moan is that neither me or my sister are 'getting on with life' as they would quite like to go to the next big event, or pop around for tea.

 

No clever, no luck.

Benefit from how stupid that useless Scots tnuc Brown.

As far as 30 years. Nope. Compare prices against earning. It was not till 2003 they went above 5 lte - Browns no more boom or bust.

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1 hour ago, AdamoMucci said:

Then says to my mum: Adamo is right you know! I have just checked cumulative inflation for X year period and it is 300%. We experienced an 800% gain in that time according to this HP index im looking at! I always just assumed the HPI reflected inflation!

Did he buy using just one income? A large part of the rise is related to an increase in lending from 3x single income to 4.5x joint, in effect it's a tripling of prices. Late 90's average house was £59k and doable on one average income of £18k, plus a 10% deposit that people could form by saving when rates were decent. Now it's often 4.5x joint income.

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People see the world through their own experiences. They remember being force fed offal as kids at the tail end of rationing, being skint during the three day week in the 1970s, struggling with the mortgage when rates were 15 percent. They know their kids have never had any of this so assume their lives must be great. 

However, there are things they just took for granted. I remember a conversation i had at the railway station once with a tearful young women, who had just missed the last train home at half ten after spending the whole evening in the office. She had an entry level position, poorly paid, bullied, expected to work every hour God sent and be grateful for it. Told me when she told her dad he dismissively  asked why she didnt just go to the union or leave for another company. He couldnt comprehend that was the work culture, their was no union and she had to fight to get the job she had. 

In the same way my parents cant comprehend when i say  i regret paying into a pension, as one way or another the government probably wont ever give it to me. 

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9 minutes ago, Democorruptcy said:

Did he buy using just one income? A large part of the rise is related to an increase in lending from 3x single income to 4.5x joint, in effect it's a tripling of prices. Late 90's average house was £59k and doable on one average income of £18k, plus a 10% deposit that people could form by saving when rates were decent. Now it's often 4.5x joint income.

One (good) income, mid-80s. A fortunate location (Brighton area). From then to now 1400% HPI.

(Even I had not worked out that HPI percentage until this weekend. It is just mind boggling.)

Edited by AdamoMucci

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