Boomer life according to the economist
Discussion
havoc said:
.... various points .
Scootersp] some other good points.... /quote said:
....and yet the consensus seems to be the super rich will find ways to avoid whatever you put in place, either by advisors or going overseas. So if this is your target why bother.
.... and still whilst you may trim the wealth of the tallest, what you raise will barely change the lot of the shortest. It may make you feel better, but it will change little in terms of wealth inequality......
UNLESS...... unless its not truly the super rich & wealthy you go after but those that just happen to have done well for themselves. Those that may have amassed wealth of a million.... (after all aren't they very rich?). Targetting specific sorts of wealth is always riddled with inequities. Targetting certain levels of wealth that may make a difference will always result in those bills coming ultimately down the wealth levels. Look at how tax rises have been hidden by threasholds being frozen.
It's a slippery slope.
.... and still whilst you may trim the wealth of the tallest, what you raise will barely change the lot of the shortest. It may make you feel better, but it will change little in terms of wealth inequality......
UNLESS...... unless its not truly the super rich & wealthy you go after but those that just happen to have done well for themselves. Those that may have amassed wealth of a million.... (after all aren't they very rich?). Targetting specific sorts of wealth is always riddled with inequities. Targetting certain levels of wealth that may make a difference will always result in those bills coming ultimately down the wealth levels. Look at how tax rises have been hidden by threasholds being frozen.
It's a slippery slope.
NRS said:
The reason IMO they should tax wealth is that is grows far faster than income these days. You create a 2 tier society where it’s not about how hard you work a lot of the time, it’s about what wealth you start out with. Wages struggle to keep up with inflation for almost 2 decades so there is no growth there, it’s in wealth it happens.
So for the majority of people their life is set up by if their parents have money. In some cases that is larger long term family wealth, but for the majority it’s likely to be did their parents/grandparents buy property. If they did and they give them a hand it gets you out of the rental market immediately, saving 5-15 years of renting to build a deposit, and also means you can put more money into shares to earn more wealth (either pension or savings) during this time. Compound interest causes that to increase far more. That’s important as we almost all only have direct contribution pensions now.
So most of your financial success is based on your parents, not your own hard work. It’s the irony that many who say it’s their own hard work that is important ignore that in a generational timescale things reverse and it becomes about what your parents did. Previously real wage growth could help fix this, but we don’t have it now hence thinking it is a good idea.
And just to say this isn’t envy, I am lucky enough to earn well, I’m also in a country that has a wealth tax and so both combined mean I’ll likely pay a wealth tax in future. I have been lucky enough that I am in a situation where a well paying job changed things, but most others my age don’t have that - it’s clear to see what most financial success for others in my age group is about what their parents did, not our jobs.
My bolding. Are you sure this is true?So for the majority of people their life is set up by if their parents have money. In some cases that is larger long term family wealth, but for the majority it’s likely to be did their parents/grandparents buy property. If they did and they give them a hand it gets you out of the rental market immediately, saving 5-15 years of renting to build a deposit, and also means you can put more money into shares to earn more wealth (either pension or savings) during this time. Compound interest causes that to increase far more. That’s important as we almost all only have direct contribution pensions now.
So most of your financial success is based on your parents, not your own hard work. It’s the irony that many who say it’s their own hard work that is important ignore that in a generational timescale things reverse and it becomes about what your parents did. Previously real wage growth could help fix this, but we don’t have it now hence thinking it is a good idea.
And just to say this isn’t envy, I am lucky enough to earn well, I’m also in a country that has a wealth tax and so both combined mean I’ll likely pay a wealth tax in future. I have been lucky enough that I am in a situation where a well paying job changed things, but most others my age don’t have that - it’s clear to see what most financial success for others in my age group is about what their parents did, not our jobs.
I suspect the reality is that very few are set up by family wealth.
supersport said:
My bolding. Are you sure this is true?
I suspect the reality is that very few are set up by family wealth.
Really? Have you seen the amounts of money the average FTB is getting from bank of parents these days? And then looked at the percentage of transactions where this is present? It’s vast. I suspect the reality is that very few are set up by family wealth.
Add to that schooling, state in that wealth buys houses near good schools. Private is self explanatory.
Then there’s the forming environment kids with more wealthy parents grow up in, night and day to the opposite. The network of parents mates/exposure to things poorer people wouldn’t.
It goes way beyond just being born into a family with huge money that you’ll inherit one day.
They are going to do wealth taxes. Period. Some won't manifest as the worst case scenario many in here fear, but they are coming. Super council tax bands are a form of wealth tax, I'd expect them sometime early in Labours first term to be announced. Edge cases will be whined about all day along about single grannies etc, but by and large wealth taxes make a lot of sense.
They need to find a lot more money than anyone is here is contemplating. Half a trillion for regional invest - is a starter, that's upping the national debt a chunk (but not beyond G7 averages), so maybe doable with careful structuring (SWFs, UK pension fund incentives etc etc - already tickled with). And it needs to be kept away from social spendies to do real GDP growth - IF Labour go there they need to use some discipline hitherto rarely seen, but if you listen to the Centrists there is a realisation that everyone needs to grow up (Tories are a lost cause). I'd also make a 40 year forward commitment to significantly reduce the pension - so people starting in the work place have ample time to prepare for its withdrawal (but oh look a SWF specifically investing in UK Plc - might be worth sticking into).
Going green won't be cheap, but can see some can kicking on that one.
The other elephant in the room no one touched on, defence spending is comically low Viz boomer years. Its going to need to go up to levels seen pre 1980's (5%+ GDP) possible peak Boomer years.
The UK is far better positioned than most. People saying services or finance don't add nothing really haven't understood what the services are OR how valuable they are to the UK as a diversified economy - we are lucky we have the options to do wealth taxes AND have borrowing headroom. It might seem a bit s
t here, its far, far worse elsewhere.
They need to find a lot more money than anyone is here is contemplating. Half a trillion for regional invest - is a starter, that's upping the national debt a chunk (but not beyond G7 averages), so maybe doable with careful structuring (SWFs, UK pension fund incentives etc etc - already tickled with). And it needs to be kept away from social spendies to do real GDP growth - IF Labour go there they need to use some discipline hitherto rarely seen, but if you listen to the Centrists there is a realisation that everyone needs to grow up (Tories are a lost cause). I'd also make a 40 year forward commitment to significantly reduce the pension - so people starting in the work place have ample time to prepare for its withdrawal (but oh look a SWF specifically investing in UK Plc - might be worth sticking into).
Going green won't be cheap, but can see some can kicking on that one.
The other elephant in the room no one touched on, defence spending is comically low Viz boomer years. Its going to need to go up to levels seen pre 1980's (5%+ GDP) possible peak Boomer years.
The UK is far better positioned than most. People saying services or finance don't add nothing really haven't understood what the services are OR how valuable they are to the UK as a diversified economy - we are lucky we have the options to do wealth taxes AND have borrowing headroom. It might seem a bit s
t here, its far, far worse elsewhere.OoopsVoss said:
They are going to do wealth taxes. Period. Some won't manifest as the worst case scenario many in here fear, but they are coming. Super council tax bands are a form of wealth tax, I'd expect them sometime early in Labours first term to be announced. Edge cases will be whined about all day along about single grannies etc, but by and large wealth taxes make a lot of sense.
Only if uprooting of people against their will is a good idea (clue, it isn't) otherwise how does a granny who is asset rich and cash poor pay the wealth tax levied on her home? Selling up on a main residence to downsize and avoid wealth taxation will soon attract CGT as the envyists grab what they can.Will HMRC accept a brick per month?
It's totalitarian asset wealthnic cleansing.
turbobloke said:
Only if uprooting of people against their will is a good idea (clue, it isn't) otherwise how does a granny who is asset rich and cash poor pay the wealth tax levied on her home? Selling up on a main residence to downsize and avoid wealth taxation will soon attract CGT as the envyists grab what they can.
Will HMRC accept a brick per month?
It's totalitarian asset wealthnic cleansing.
Edge case. Its going to happen, there are solutions where homeowners not liquid enough end up with a lien over their property.Will HMRC accept a brick per month?
It's totalitarian asset wealthnic cleansing.
There isn't enough money, there will be very significant changes. There will be more debt, there will be more tax, hopefully over a long term you get more growth.
OoopsVoss said:
Lot of sensible stuff.
Not sure what the angle is that TB and GT3ROB have on here, but with an ageing population and with wages stagnating, any increases to Income Tax are going to be pretty futile (and badly received), and VAT is already more than high enough. So that doesn't leave many levers to pull unless someone wants to go after companies....which of course IS a valid lever...if it was me though, I'd be upping the headline CT rate and then offering full relief for specific types or levels of investment (e.g. things which don't destroy jobs but still improve productivity, innovation-led items, etc). Net NIL tax-take probably, but we kick-start business growth / labour productivity again.
GT03ROB said:
Targetting specific sorts of wealth is always riddled with inequities. Targetting certain levels of wealth that may make a difference will always result in those bills coming ultimately down the wealth levels. Look at how tax rises have been hidden by threasholds being frozen.
It's a slippery slope.
Hasn't there been an inequity in place to get to this point though? It's a slippery slope.
You could equally state writing certain legislation has caused inequities?
So if higher taxes aren't the answer, lower ones are?
Very low taxes might work if we all considered ourselves on the same team and accepted a symbiotic relationship but we've become all a bit insular/isolated/protectionist? In bad times you baton down the hatches and look after number 1 + family, that's natural, ideally things are managed such that truly bad times don't occur.
Any answers are hard, as at every level you can make a case for protecting what you have because you earnt it and deserve to keep it. The old adage of what someone deems as fair/fine are "tax increases on those earning that bit more than me".
A possible glimpse into this overall issue can be seen in miniature on the odd episode of undercover Boss/CEO, some of the CEO's get a genuine shock and seem to genuinely realise a person needs and deserves more help/pay. You can sometimes see a penny drop and a kind of enhanced appreciation of the employee but also of how hard sometimes their lives can be compared to their own. Ok it's TV blah blah but there is a visible disconnect and businesses going on the show are already probably the more connected/sympathetic large ones and so their surprise is perhaps telling.
My long term consequences summary would be currently you have children, then in the middle, Welfare, Workers/including active business owners and Passive income/never had to work/early retirees, then the aged retired. Economic output comes from just that middle group (not going to estimate proportions)
Welfare (including child care type incentives to the working) is going to go up, there is such a huge and growing gulf/gap to escape this if you are in it, huge work/life balance change (ie from no work!) and little if any financial gain, with loss of total housing security, another example of decades of policy failing, creating this 'trap'.
The Workers section will see more falling back to the welfare section (especially with age/as time goes by - more workers renting all their life) more will have less to spend, fewer will make it to the passive income/early retirement, harder to have children, less to pass on to them, even harder for the children than them (negative generational wealth spiral). These are the economies workers/engine room, that are struggling to emulate even the welfares crowd living standards? Kids have to wait mortgages/rents much much higher, lower security, while also looking up at the top realising their work is partly allowing the ongoing leisure and spending of the very wealthy? see China and 'tang ping' "is a silent revolution representing the powerlessness of young people who know they will never achieve the same living standards as their parents or grandparents"
The passive income people will just get more wealthy as they don't/can't spend their annual income on living and so buy more assets, and then get more income the next year and so on and so on. Hence the rich get richer after some wealth tipping point? (positive generational wealth spiral).
What does that lead to? an inevitable general societal decline which eventually hurts us all eventually including those at the top?
havoc said:
Socially the biggest issue is that "children" literally cannot afford to move out of their parents home without moving 100s of miles away.
I think most of those children could well make it to own a house or more if they'd apply some tightened waistband tactic. Not going out for a few years, not eating out for a few years, invest and reinvest. Kids nowadays lack discipline, or they do not know what that is.
Ok not all and some still do make it like Hoodrich. > https://www.bbc.co.uk/news/av/business-67197321
Who started his streetwear brand Hoodrich in Birmingham in 2014 with just £200.
Text interpretation of that marketing success you find here: https://se544.com/en/marketing-success.html
Edited by NickZ24 on Tuesday 16th April 14:28
NickZ24 said:
I think most of those children could well make it to own a house or more if they'd apply some tightened waistband tactic. Not going out for a few years, not eating out for a few years, invest and reinvest.
Kids nowadays lack discipline, or they do not know what that is.
Oh, that old chestnut. Gotta love that bit of bullsKids nowadays lack discipline, or they do not know what that is.
t from boomers who can't do maths. 
Per person, assuming pretty profligate spending:-
Save 5 coffees per week = £15-20
Save 1 takeawy per week = £20-25
Save 1 meal out per week = £40
Save 1 night clubbing per week = £25-40.
Total per week = £100 - 125. Per month = £400-500*. Per year = £5k-6k. Over 5 years = £30k.
Over 5 years, the house price inflation on an average-priced home = 20-30% x £280k = £50-80k. Twice what they've saved up. This is why your bulls
t doesn't add up - because the whole st-show is stacked against first time buyers right now without HTB or similar schemes (which are propping the market up, BTW).Second point. Mortgage eligibility. Typical wage for a 20-something = <£30k. £40-50k for a professional. 5x salary mortgage therefore = £150-200k. So they'd be able to buy a house costing MAYBE £200k 5 years after they started saving, by which point said house would be >£250k. So they'd have to go into "shared ownership", which is another con waiting to happen as they've still got to pay rent on the remaining 50%, so their mortgage eligibility halves straight away.
* Third point. Someone young is only going to have £400-500 a month disposable income for eating out and going out if they're still living with parents. Otherwise rent is going to soak up ALL of their spare cash.
havoc said:
Oh, that old chestnut. Gotta love that bit of bullst from boomers who can't do maths.
Per person, assuming pretty profligate spending:-
Save 5 coffees per week = £15-20
Save 1 takeawy per week = £20-25
Save 1 meal out per week = £40
Save 1 night clubbing per week = £25-40.
Total per week = £100 - 125. Per month = £400-500*. Per year = £5k-6k. Over 5 years = £30k.
Over 5 years, the house price inflation on an average-priced home = 20-30% x £280k = £50-80k. Twice what they've saved up.
Per person, assuming pretty profligate spending:-t from boomers who can't do maths. Per person, assuming pretty profligate spending:-
Save 5 coffees per week = £15-20
Save 1 takeawy per week = £20-25
Save 1 meal out per week = £40
Save 1 night clubbing per week = £25-40.
Total per week = £100 - 125. Per month = £400-500*. Per year = £5k-6k. Over 5 years = £30k.
Over 5 years, the house price inflation on an average-priced home = 20-30% x £280k = £50-80k. Twice what they've saved up.
Save 15 coffees per week = £45-60
Save 7 takeaway per week = £140-165
Save 7 meal out per week = £280
Save 3 night clubbing per week = £75-120
A holiday 2 times a year, a posh car all ads up, credits, shopping
Total per week = 540 to 625 without holidays, with holidays and credits for a car about 1.5 to 2K per month. Per year = £18k-22k. Over 5 Years.....
Don't just calculate in extremes, extremes go both ways, do you really believe the millions who fly off to costa brava, costa del sol, Mallorca do that by winning the lottery?
Edited by NickZ24 on Saturday 13th April 00:44
NickZ24 said:
Per person, assuming pretty profligate spending:-
Save 15 coffees per week = £45-60
Save 7 takeaway per week = £140-165
Save 7 meal out per week = £280
Save 3 night clubbing per week = £75-120
A holiday 2 times a year, a posh car all ads up, credits, shopping
Total per week = 540 to 625 without holidays, with holidays and credits for a car about 1.5 to 2K per month. Per year = £18k-22k. Over 5 Years.....
Don't just calculate in extremes, extremes go both ways, do you really believe the millions who fly off to costa brava, costa del sol, Mallorca do that by winning the lottery?
I cant see many 20-30yr olds really live like that, basically just having cereal/toast in the morning at home and then never having any other meal at home doesnt sound likely.Save 15 coffees per week = £45-60
Save 7 takeaway per week = £140-165
Save 7 meal out per week = £280
Save 3 night clubbing per week = £75-120
A holiday 2 times a year, a posh car all ads up, credits, shopping
Total per week = 540 to 625 without holidays, with holidays and credits for a car about 1.5 to 2K per month. Per year = £18k-22k. Over 5 Years.....
Don't just calculate in extremes, extremes go both ways, do you really believe the millions who fly off to costa brava, costa del sol, Mallorca do that by winning the lottery?
Edited by NickZ24 on Saturday 13th April 00:44
I know I didnt in my 20s
I think the other version above seems a more likely scenario and could easily remove those things from your life without any detriment, plus then save money ontop of that will help
I know as a family of 4 on a combined £60k(45/15) income we had to save £40k to get a house deposit in 2years and that was hard going but we did it, but then we never had any of the things you mentioned above anyway so I guess we came at it from a different perspective.
turbotoaster said:
NickZ24 said:
Per person, assuming pretty profligate spending:-
Save 15 coffees per week = £45-60
Save 7 takeaway per week = £140-165
Save 7 meal out per week = £280
Save 3 night clubbing per week = £75-120
A holiday 2 times a year, a posh car all ads up, credits, shopping
Total per week = 540 to 625 without holidays, with holidays and credits for a car about 1.5 to 2K per month. Per year = £18k-22k. Over 5 Years.....
Don't just calculate in extremes, extremes go both ways, do you really believe the millions who fly off to costa brava, costa del sol, Mallorca do that by winning the lottery?
I cant see many 20-30yr olds really live like that, basically just having cereal/toast in the morning at home and then never having any other meal at home doesnt sound likely.Save 15 coffees per week = £45-60
Save 7 takeaway per week = £140-165
Save 7 meal out per week = £280
Save 3 night clubbing per week = £75-120
A holiday 2 times a year, a posh car all ads up, credits, shopping
Total per week = 540 to 625 without holidays, with holidays and credits for a car about 1.5 to 2K per month. Per year = £18k-22k. Over 5 Years.....
Don't just calculate in extremes, extremes go both ways, do you really believe the millions who fly off to costa brava, costa del sol, Mallorca do that by winning the lottery?
Edited by NickZ24 on Saturday 13th April 00:44
I know I didnt in my 20s
I think the other version above seems a more likely scenario and could easily remove those things from your life without any detriment, plus then save money ontop of that will help
I know as a family of 4 on a combined £60k(45/15) income we had to save £40k to get a house deposit in 2years and that was hard going but we did it, but then we never had any of the things you mentioned above anyway so I guess we came at it from a different perspective.
I was also lucky enough to be just before the huge tuition fee start, which means as well as rent you also have a lot of debt payment for those who are younger.
turbotoaster said:
NickZ24 said:
A load of hyperbolix
I cant see many 20-30yr olds really live like that, basically just having cereal/toast in the morning at home and then never having any other meal at home doesnt sound likely.I know I didnt in my 20s
I think the other version above seems a more likely scenario and could easily remove those things from your life without any detriment, plus then save money ontop of that will help
I know as a family of 4 on a combined £60k(45/15) income we had to save £40k to get a house deposit in 2years and that was hard going but we did it, but then we never had any of the things you mentioned above anyway so I guess we came at it from a different perspective.
The young aren't, in the main, profligate. They can't afford to be.
okgo said:
There’s plenty in London doing that - I certainly did a fair bit of it and still mostly do in my 30’s.
Saving £30k over 5 years as useful as a chocolate teacup when avg price is over £500k tbh
Saving £30k over 5 years gives you a shot to open a business. In those 5 years you work on a credit history. Saving £30k over 5 years as useful as a chocolate teacup when avg price is over £500k tbh
Its is exactly the mindset that 30k are peanuts which leads to a standstill.
There are no raisins raining down if you wish to own a house.
NickZ24 said:
okgo said:
There’s plenty in London doing that - I certainly did a fair bit of it and still mostly do in my 30’s.
Saving £30k over 5 years as useful as a chocolate teacup when avg price is over £500k tbh
Saving £30k over 5 years gives you a shot to open a business. In those 5 years you work on a credit history. Saving £30k over 5 years as useful as a chocolate teacup when avg price is over £500k tbh
Its is exactly the mindset that 30k are peanuts which leads to a standstill.
There are no raisins raining down if you wish to own a house.
NRS said:
And most businesses go bust in the first year, so not great financial advice for most people to buy a house,
Do you leave your home? I mean you could fall, why dare? We all learn, we stand up, we fall we get up again.
The Boomerlife according to the economist tells a story as if our forefather had it easy.
The same stories of people making it exist today. I.e. Hoodrich https://www.bbc.com/news/av/business-67197321
Coffee and eating out, clothing, a car, some holiday, better is learning how to save, as all that ads up.
Sure if you prefer to complain that is your cup of tea.
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