You can do a quick google to find out more about the millionaire avocado toast brouhaha that’s happening on the internet right now.
Here’s an article to get you started.
I’m of two minds about this guy.
This part? Haven’t got much of a beef with it.
“We’re at a point now where the expectations of younger people are very, very high,” Gruner said. “They want to eat out every day, they want to travel to Europe every year. The people that own homes today worked very, very hard for it, saved every dollar, did everything they could to get up the property investment ladder.”
Unless you have unlimited funds, you have to make some choices with your money.
And if eating out and traveling is more important than home-ownership to a person, that’s fine. But then when you can’t afford a home, you have to remember that you made some different choices.
But then too, if a housing market explodes (as I gather it has done in Australia?), that does indeed make it harder for young people to get into the market.
Mr. FG and I saved up for a down payment on our first house when we were pretty low-income. It took a lot of hard work and discipline on our parts, but we managed to get a $104,000 townhouse.
We bought right before a housing market explosion, and five years later, we sold the townhouse for $252,000.
Things have leveled off slightly, but the fact is that right now, it’s harder for a young person to buy an affordable house than it was for Mr. FG and me back in 2000.
So, it would be a little silly for me to get all high and mighty and to tell young people that if they just stopped eating out, then they could do what I did.
The big money-maker for us wasn’t so much that we scrimped and pinched in order to buy; it’s that we happened to buy right before the market went way up.
But then on the other hand (how many hands am I up to now??), the housing market is what it is. And if you want to have a prayer of buying a home, then you DO need to look hard at your finances and prioritize home-ownership.
That might mean making avocado toast at home (or eating other kinds of toast if avocados are too expensive!), taking local vacations, reducing your cell phone bill, buying second-hand items, and so on.
And you probably also need to take a look at the income side of things. Frugality is great, but it works even better when you manage to up your earnings.
That’s the killer combo. You can scrimp and pinch and make it by on a low income and you can spend willy-nilly and blow a high income. Neither of those scenarios are going to get you ahead.
But if you can earn a good income AND keep your spending in check, then you’ve got something super effective going on.
________________
What do you think? I’d love to hear your opinions!
P.S. For the record, I get my avocados very inexpensively either at Aldi or in my Hungry Harvest box. So, I’m pretty sure my avocado toast isn’t what’s keeping me from becoming a millionaire. 😉
Kassie
Wednesday 31st of May 2017
A few months ago I read an opinion article on the difference between older millennials (those born before 1990) and younger millennials (those born from 1990 on). I wish I could now find the link to that article to share here, but I really enjoyed some thoughts in it. Namely, the technology surge that happened in the late 1990's to 2000's made drastic differences in the way older and younger millennial think and act.
I clarify this, because I am from the "older millennial" timeframe, and I do begrudge many millennial articles, and even just being labeled as such, because I don't feel it fits me. I try not to take offense at such labels, partially because it is just a label and partially because there is a lot of generalization to millennials that seems to ring true. But, I have to say, I never owned a cell phone until the age of 18 when I moved away to college and bought one myself. I never owned a smart phone until well into my working career post college. I have never received a penny of assistance from anyone in my family from the time I left home. If I travelled home for the holidays, I purchased my airfare. When I needed my first car to complete an internship 30 miles away in rural Idaho (not public transportation) as part of my undergraduate degree, I purchased it. If I went to the doctor, I paid for it.
Currently, I am 29 years old, married with two children, and my family and I live very frugally to put my husband through medical school (career change late in life... I like what Kristen said about increasing income and living frugally). We came to school debt free, though we are accumulating student loans now. After my husband graduates, we plan to immediately buy a modest middle class home in a middle class neighborhood and live on $50k-70k a year (depending on mortgage cost) while snowballing the rest towards student loan payoff and then mortgage payoff.
I guess my points are these: A. I like Kristen's viewpoint on a good balance of everything: frugality, income, luck with the market, etc. B. Not all millennials are the same. I feel particularly older millennials. (I've grown up in a blended family of 9 kids, all adults now, born between 1982 and 1999, and 1990 truly seems to be the division point between lifestyles of siblings who were otherwise raised together from 2000 on.)
Kaitlin Buchheit
Friday 19th of May 2017
I've been musing over this article for a few days. I am a home owner and 30. We bought because it's cheaper than rent here, but I really have little desire to own again before retirement. We move a lot due to work and I don't feel like I can make improvements and care for maintainence issues in the home and enjoy it and live life with 3 toddlers and a husband who travels frequently. If my life were less transient, I'd love home ownership. However, transience seems to be a growing normal in the workforce now (between me and my 5 siblings, 4 of us move at least every three years (4 different career fields) and 1 is in college)), which makes the investment of homeownership less worthwhile. I'd much rather rent a smaller place than what I'd buy (buying is long term:how big will the family get? Renting allows us to get just what we need for the very immediate future), save a few pennies doing so, not deal with the headache of inevitable maintainence problems, and explore the area that I'll only get to see for a limited amount of time. So, yes, I guess experience is important. We get paid to live in different places all across the country. Why not take advantage of that and explore?
Kaitlin Buchheit
Friday 19th of May 2017
Also, Wes have to pay for visiting family, the closest of which lives 1000 miles away. At times we've had to travel 4000 miles just visit one set of parents. That's so much Moreno important to me than owning a house. It's not so much a money issue but a time issue: where does one fit it all in? I can't, so I choose to de-prioritize my house.
Rebecca
Thursday 18th of May 2017
We've been talking about this subject recently in my family ... my husband and I have worked our way up (lived below the poverty line, joined the National Guard for health insurance, worked multiple jobs, went to college ... all with two kids haha) and I guess you could say we've arrived ... we've got a lower-priced house in our area (285k), a VA loan so the terms are fantastic ... but we also have a significant amount of student loan debt left (our car is 17 years old, we only have one, so the student loans are the only debt besides the house). I'm not sure we could've gotten my husband his degree without taking out those loans (he works as an engineer for one of the national labs) and even though he went to a state school, nothing fancy ... it was way more expensive than what my parents paid when they went through college. So the financial dynamics are different for millennials, as many have mentioned. But I've got friends who're living that jet-set lifestyle and there's something about dropping $10 on a cocktail every weekend (and more than one usually) that just rubs me the wrong way ... but gen again if that's the lifestyle they want who am I to judge? I'm not paying their bills Home ownership is definitely no longer the dream for many millennials I know, including myself ... our mortgage is cheaper than rent or we might still be renting ... I don't like being tied down. So I see merit in the advice but also I think priorities are just not the same across the board. Anyway, interesting article, and I liked reading through the comments!
SarahN
Thursday 18th of May 2017
So many comments! I am a regular reader (via email as I can then read them in breaks at work) and rare commenter. But I am Aussie, writing from Heidelberg, Germany. Making me a jetsetter. Who also did 7 course degustation in Iceland (not known for being cheap) this week. And I own a 700sq feet apartment (AD$465k when I bought it 5 years ago, estimates at $600k now for it's one bedroom). I want to say I feel INCREDIBLY privileged every time I travel - and it's one or two times a year to international destinations. I also eat out - not regularly, but enough.
But to get to this point at 32? I lived with my parents for three years (paying rent) to save a down payment (we call them deposits). I bought a small place well located (ie a walk to the city), which is perverse as I work outside the city... I studied a 5 year degree in Engineering, and work in a very well paid job (the sort that my equivalents are 60, and worked their life to get to, but due to changing circumstances, the company has employed some young 'book smart' types not just 'life/experience smart' types). I don't take ANY of this for granted. To save, I didn't buy new clothes for a year (not even knickers - my uber frugal dad had to tell me to buy some eventually as they started to lose elastic, and he'd sometimes be hanging out the washing). I travelled locally. I know with a different job, I'd earn a lot less, and have to change a lot. But... I pay my mortgage (and then some), I pay my bills, and there's money left, and I use it mindfully - on travel, on meals out.
Jeanne
Thursday 18th of May 2017
My 22 yo Son pays rent to live in my house. Not because I need the money but because he needs to live in the real world. He does complain that he doesn't have spending money. But his rent includes his food and is much lower than what he would have to pay for an apartment in our area. We did tell him that the rent could be returned for college tuition or a down payment on a house