Inter generational fairness

[Deleted User]

GreatApe wrote: »

If you are from the poorer portion of society you simply have to work harder longer better to move up. There are some shortcuts for those who really want it like finding and marrying a richer spouse/family but for the majority it really is working longer better and smarter

Your posts make me think of the Radiohead 'song' Fitter Happier - https://www.youtube.com/watch?v=HimvFbossU8

Remember kids! If you want social mobility, depend on your parents for free housing/food/bills from the age of 16 to 26. Don't have any aspirations on further/higher education. Don't travel. Be an economically perfect individual with low aspirations. Work your dead-end job for the rest of your life so you can bring up children with exactly the same prospects. Make sure you stay in the same geographic location as your parents, since you will depend on cheap housing for the rest of your life.

Work will set you free. Freedom is slavery. Ignorance is strength.

Thrugelmir

missbiggles1 wrote: »

Kids of that age shouldn't be in work, they should be in education or training.

Work can be an education and provide training. Theory does little to prepare people for the real world.

GreatApe

steampowered wrote: »

Exactly. I agree 110%.

This, in a nutshell, is what I think is going wrong with our economy. We are fast moving towards a situation where people's position in life is determined by their inheritance and their unearned property wealth; rather than by what they earn through wealth.

We seem to be moving away from a meritocracy.

of course on first thought it seems unfair but think it through a bit more and you should come to the conclusion that inheritances are a fantastic thing.

That a person gets an inheritance does not detract from someone who does not

An inheritance is just saved capital, does it make sense to really say or think that previous generations should not have saved capital to make the lives of their kids any easier?


Also this saved capital means the price of capital gets cheaper and cheaper for people who do not have capital. That is to say if you receive an inheritance of £200k to buy a house great, if you dont, you can borrow capital at 1% thanks largely to the existence of stored and passed down wealth. So even those who do not receive capital from their parents benefit to some large degree from being able to rent at very cheap prices this capital. eg real mortgage interests are close to zero or even negative

Also inherited wealth is spread thinner and thinner each generation assuming most people aren't inbreeding

GreatApe

ringo_24601 wrote: »

Your posts make me think of the Radiohead 'song' Fitter Happier - https://www.youtube.com/watch?v=HimvFbossU8

Remember kids! If you want social mobility, depend on your parents for free housing/food/bills from the age of 16 to 26. Don't have any aspirations on further/higher education. Don't travel. Be an economically perfect individual with low aspirations. Work your dead-end job for the rest of your life so you can bring up children with exactly the same prospects. Make sure you stay in the same geographic location as your parents, since you will depend on cheap housing for the rest of your life.

Work will set you free. Freedom is slavery. Ignorance is strength.

its a dam sight better idea than complaining or crying that things are impossible

the 16-26 working a min wage job was just to show that even the lowest paid couple can own outright 2 homes by age 26 it was not a cap on aspiration or ambition but a lower limit on what can be done with what should be seen as a modest sacrifice

Of course people can and do achieve much much greater things, yes even people who are from poorer families

Herzlos

ringo_24601 wrote: »

I took out a 33 year mortgage on my current home. I maxed it out so it would be paid off when I'm 65, with the view that any inheritance would then be used to shorten it (And my own overpayments when I'm able to).

I did similar, but with a 40 year mortgage to be mortgage free for retiring at 65 (ha!), which means I'm essentially taking my entire working life to pay off the house. If property prices get much worse, we're going to be looking at longer mortgages and realistically much longer than 49 years (18-67) is going to have to span generations.

GreatApe

Herzlos wrote: »

I did similar, but with a 40 year mortgage to be mortgage free for retiring at 65 (ha!), which means I'm essentially taking my entire working life to pay off the house. If property prices get much worse, we're going to be looking at longer mortgages and realistically much longer than 49 years (18-67) is going to have to span generations.

Most people do not need to do anything like take on 40 year mortgages,

Also there are some £200 billion gifts and inheritances per year. A huge huge sum that turns the left leaning everything is impossible generation into the tory voting middle aged comfortable generation.

Plus with most women now having 2 children or fewer it means generational wealth is concentrated. That means if your good self pays off a house and leaves 1 house worth of inheritance then your kids or grand kids dont need to pay for housing they effectively get it free and just need to pay for upkeep and they too can pass it onto the kid/grandkid so once women start having 2 children or fewer then after a couple of generations housing is free for all generations thereafter.

With the savings rate still positive and women having 2 children or fewer on average its lead to a huge savings glut and this is one of the reasons the price of renting capital in the west is down to zero or even negative

[Deleted User]

Herzlos wrote: »

I did similar, but with a 40 year mortgage to be mortgage free for retiring at 65 (ha!), which means I'm essentially taking my entire working life to pay off the house. If property prices get much worse, we're going to be looking at longer mortgages and realistically much longer than 49 years (18-67) is going to have to span generations.

It also won't just impact first-time buyers. Family size homes are atrociously expensive in the SE and HPI is rampant.

But we're not allowed to grumble or worry about the future apparently. We can encourage our children to live at home, not get a higher education, and move to an economically challenged area when they're in their 20s ;-)

I don't know anyone that waiting until they received an inheritance until they bought a home.

Herzlos - when I bought our first house I was 26, and we did worse than a 40 year mortgage.. we went for a 25 year interest only mortgage.. I had no intention of paying off any capital until I could really afford it.

(I also live/work 200 miles from my parents, and have always done since I was 22.. I don't know how GreatApes plan works for me. The cheapest homes near me cost > £200k, so I don't know how GreatApes plan works for my kids either)

GreatApe

ringo_24601 wrote: »

It also won't just impact first-time buyers. Family size homes are atrociously expensive in the SE and HPI is rampant.

But we're not allowed to grumble or worry about the future apparently. We can encourage our children to live at home, not get a higher education, and move to an economically challenged area when they're in their 20s ;-)

I don't know anyone that waiting until they received an inheritance until they bought a home.

Why would you expect to be able to out compete and outbid people who have larger inherited pots or have much better paid jobs?

I do not cry that I cant afford a 200 sqm house in Kensington.
Simply put the people who are able to afford that have higher paid jobs, are/were able to make more money, are/were receiving inter generational wealth. or all of the above in a scale much bigger than I have attained. Would you have any sympathy for me if i cried that I cant buy a 200 sqm house in kensington? probably not you would laugh at such a person

[Deleted User]

GreatApe wrote: »

Why would you expect to be able to out compete and outbid people who have larger inherited pots or have much better paid jobs?

I do not cry that I cant afford a 200 sqm house in Kensington.
Simply put the people who are able to afford that have higher paid jobs, are/were able to make more money, are/were receiving inter generational wealth. or all of the above in a scale much bigger than I have attained. Would you have any sympathy for me if i cried that I cant buy a 200 sqm house in kensington? probably not you would laugh at such a person

So you have no concerns that the area of the country that is becoming unaffordable for the young is growing and growing? What happens when these better paying jobs end up moving to Manchester and Newcastle, and houses become unaffordable in your precious North?

Should all people who have the misfortune of parents who live a long and healthy life move to rotten ex-council houses in decrepit Northern towns and be damned?

I went for the 'pre-inheritance' approach. I'm removed from my gran's will, in lieu of help towards my first home's deposit.

GreatApe

ringo_24601 wrote: »

(I also live/work 200 miles from my parents, and have always done since I was 22.. I don't know how GreatApes plan works for me. The cheapest homes near me cost > £200k, so I don't know how GreatApes plan works for my kids either)

at some stage your descendants will come into a portion of the annual £200 billion gifted and inherited. This might be you gifting your grand-kids that house your paid off or it might be them marrying into a family who is able to do that or more.

The savings rate is still positive and the stock of wealth is over £10 trillion and growing.
If the old hold onto it now, they are not destroying it as its growing and it will be passed down

Once women have 2 children or fewer the cost of a home is just 2 generations buying and paying off the mortgage all the rest get it for free.