Are We Better Off Than Our Parents?

I really enjoyed this podcast. But I do have some reservations regarding some things mentioned.

This rhetoric regarding house being unaffordable does seem to be very South East based. Or perhaps it's England based, I don't know. But here in the North East of Scotland I have recently been doing some research myself.

Here, you can get a 1 bedroom flat for around £40k. Now that's going to be a ropey flat in an unattractive area. But none the less, it's only slightly more than the UK average salary. And isn't the length of 2 times a full time, minimum wage salary. A 2 or 3 bedroom flat / semi-detached property, in my closest city, can be had for £80-100k. So around 3 times average salary. When I bought my first property in around 2003, so 20 years ago, it was a 2 bedroom semi-detached, and was around £43k. Which was around 2 times the average salary at that time IIRC. But that was in a really undesirable area to be fair.

My point is that actually, if you move out of the bigger cities, it isn't as expensive to buy property. Sure, it'd be tough to buy a house in London now on less than £100k or whatever. But equally, 20 years ago it would have been tough on half that too. Basically, it's always been tough in the likes of London, Edinburgh, Aberdeen etc...

Now, while all the chat about "stop buying Starbucks everyday and buy a house" isn't exactly helpful. It's also not exactly incorrect. You know yourself the power of investing. And that £5 Starbucks everyday, if invested in a global tracker, making average returns, turns into ~£30k in 10 years. So from the ages of 18-28, stop daily Starbucks, have house deposit. If £30k isn't enough deposit, stop Tesco meal deal, make your own sandwiches, and double that return to £60k.

My point really is that there are more pressures on our paycheck than there used to be. 20 years ago we didn't have Netflix, Disney+, Amazon Prime subscriptions, or £100+ Sky subscriptions. We (well I) didn't have daily take away coffees, or buying lunch every day. I wasn't wearing £150 trainers and £300 jackets, but I did save for a deposit for my first place.

The point is, it may have seemed cheaper / more affordable 20-30 years ago. And maybe it was. But outside of these big cities, it was maybe only marginally different. Sacrifices were made then to afford to buy our houses. As they may be necessary now. It's always a tough time when you first enter the housing market, but as time marches on, and inflation happens, the cost of the mortgage usually gets cheaper in real terms. Not to mention, hopefully, career advances increasing incomes.

So let me get this straight. These people are university graduates and it took a global pandemic, two decades into the 21st C. to teach them that you can work from anywhere and have a decent work-life balance? Let's remind ourselves that the ARPA report about the future of the computer as a means of communication was in 1964, my first experience of online chat was in 1966, I first used a 'portable' computer to work from home in 1992, and I was picking up email at a phonebox in 1998. Try to keep up kids!

It absolutely amazes me how some of the younger generation feels so hard done by…

There are more opportunities for this generation than when I left school in the early 1983…

The route to success is just different…

Really I wish I had the situation the young people face now …

I think the young people that have not made a success of themselves and blame the older generation should stop and take a good hard look at themselves… and take responsibility for their own actions and make decisions that take advantage of the reality of today rather than comparing to the past … often a past that did not exist for most people

Also after working for 40 years I think people should be richer than some self pitying person that as had free education for most of their life.. then took a degree course in a nonsense course and worked for ten percentage of the time I have..

Maybe some of the younger people should be called generation self pity and self absorbed?

Why do I think this? Well I have four grown up children and they have all took different routes in life.. no degrees.. all are a success ..

In my experience older people are more prone to falling in scams / make silly investments

American opening an ISA for their child is the worst decision they will ever make. Please get dual country tax advice if you are a dual national and do t listen to finance advisors who only know one system.

Unrelated but she has the most stunning hair.

Iona for chancellor

People are more switched on to finances because we have access to info. And that markets and banks have had to attract more people to profit.
Born in the 70s and a teen in the 90s, i literally knew nothing about finance until 2010s....!

Great conversation. She is really sharp. Listening to you guys, I'm becoming sharper myself!

One downside to these podcasts is the Overmentioning of their book!

I am being educated by you guys and I feel really inspired by your ideas and actions

inheritence is a myth the care home and gov claw it all back

The money exists ! but where is it all going ? thats the question.

Wages have actually outpaced UK ave property price in last 20 years. Biggest difference - leaving school at 16 Vs 21. 5 years of lost earnings plus ballooning student debt. Grad jobs often not paying much more. Makes a huge difference right at the start

of course we are millenials/gen z are finding it more and more difficult to move out of there parents homes, i am nearly 35 and now considering being a property guardian because i canot afford huge amount in rent or 40k to put down on a mortgage

The laffer curve relates to the most efficient way to tax a population, not 'getting spanked by the market'. Perhaps you're thinking of the dunning kruger effect?

I also use hostinger, started a website with them last year and am now full time on it. I also recommend them to my friends, great price for hosting in the UK, for me they have been faultless. Thanks for the great video as usual

In reality real income has decreased for at least the last 20 years. One of the problems is the false inflation numbers the government post. They will claim inflation is at 2% when in reality it's 10%.

The difference in what can be afforded is insane compared to what my parents could afford. They could afford a mortgage, 3 kids, and a yearly holiday on one wage that's less than half what I earn.

Todays generation feels too sorry for itself.. Work hard, work smart, sacrifice and you’ll be alright

The older generations lived in a far less regulated world that came with it's own risks in all facets of life from their banks, insurers, employment... but generally had the means to create experiences for the family. For example my parents, both workers when I was child, were able to do so many things for us that live with me forever.

We now live in a hugely regulated world which makes it harder to access certain things and then on top that (whilst I don't think they are linked together) everything else has stagnated regarding wages, whilst the cost of everything around us has sky rocketed... so what Parents could do, I can't.

I don’t want my parents to leave me ANYTHING.. I want them to enjoy what they have worked for.

I want my life to depend on my decisions, not live off my parents hard work

"My plan is I want to be on this boat" - You guys are speaking my language a lot today! 🤣

I like her practical, pragmatic approach and the hope that gives. It contrasts greatly to those that see hope as being a result of (unlikely) major political system change. As Gen Z, getting going in life was far tougher than it was for my parents; harder still for millenials. But, we do have the advantage of having far more information than generations past. There is a Darwinian element of picking the right information to work off. Never the less, the information age has helped me to get a great job and have income to invest in sensible investments that mean I am far wealthier than my parents were in their 40's. Even though they worked hard and inherited property. It took time, but I don't think I would have been able to do it had I been born twenty years earlier.

One thing that`s rarely mentioned is that the top 1% pay over 30% of ALL taxes paid. So when the ` poor ` say the rich should pay more tax , they need educating as to who`s paying their income benefits and family allowance.

I'm 59 and my mum certainly didn't have it easier than the youth of today, when I left school nothing was a free ride and the salary was a pittance, nowadays we employ 18 year old on the same salary as 50 year old, you say younger people are more aware of money but i dont see that, the younger ones I work with want to buy the most expensive house they can afford , and they have nothing in the bank. In my opinion people today are better off in general than before, with more options and more opportunities.

That’s why we need to do everything to “avoid” paying taxes.
- I took a £4k pay cut and contributed to my work pension
- I invest a minimum of £500 into a SIPP
- I agree for £200 monthly to be paid as shares (minimum of 5 years so HMRC muppets can’t touch it when you sell).
That’s £12,400 tax free a year that the government can’t touch.

What's with the dislikes? Iona had a lot of good points during the podcast.

There’s a problem in this country (and the west) where people are living longer which is fantastic for human kind but creates a huge economic problem, where the amount of retired pensioners are growing. This creates a cost of living crisis for the younger generation who are working to fund the growing pension costs, meaning higher taxes etc. Also less housing stock to choose from as a lot of the bigger houses are occupied by the elderly and we haven’t built on a large scale since the 80’s, lack of housing/affordability creates a decline in birth rate which cascades through generations, meaning less economically active citizens. Like most countries we rely on immigration to keep local economies running.

I enjoyed this episode, it’s good to hear your views. I’m aware of the glaring lack of mention of privilege and wealth inequality. You guys spoke to Gary Stevenson the other day: Seems like there could have been a connection made between the two conversations? May have been illuminating. Thanks for your work. Will keep listening ❤

Parents house in 1987 was 3x average salary, same house is now x12. Property prices are root of these issues. I hope labour make this their marquee issue for them then 2) transport.

New drinking game. Whenever she says the words my book you take a shot.

Always always always use a credit card, it provides protection. Both my daughters have them but they are intelligent enough and had sufficient parental guidance about money that they've never had any credit card debts

Defeatism: this is the British problem. The "system" is set up against me, woe is me, it's all the Tories, what we need is Corbyn and open borders and wind farms etc ad nauseum. It's self sabotage as the speaker says in this interview. You can blame whomever you want, it won't enrich you. Let that sink in... Failed 20th century socialist ideals will not enrich you.

Immigration is at 750,000 net, that's about 20 times more than in our parents' generation. Of course we're worse off.

I don't people will inherit what they think they are going too. Demographic's means that people in their 40s will not be able to afford these large houses that people in their 70s are living in.

Yep we had our struggles (im 61) , however nothing like the problems young people face today, my sons rent has gone up by 36% in the last 3 years & my daughter had to have a 10k deposit & moved 23 miles to be able to get on the property ladder

Stop all this victimhood ! We esrned £1.50 an hour in 80s so it’s all relevant. We made scarafices to get our homes we lived with out parents when we had small children. We couldn’t afford child care so grandparents took that role. We waited at bus stops to get to work by 9am and got told off if we min late! There was no home work. We did shopping in our time as everything was monitored. We all come into the world with our bodies and it’s up to pp what they make of it! So sick of it

It’s not just in uk houses prices it’s all over world uk is small island so if you can’t afford so live further out ! Make sacrifices ! We did

So negative this woman bashed landlords so much go donate thing no one stopping you

Brilliant episode. The realistic but positive antidote to the doom monger/ blame everyone else but myself nonsense spouted by Gary Stevenson.

Context is key in these subjects. I am surprised that in the discussions about house prices and incomes, rarely are interest and inflation rates mentioned. Whilst interest rates in the noughties, until the financial crash, were similar to today (4-6%), for the previous 30 years they were around 8-12% (17% in 1979-80). What really matters is the effect of those interest rates on mortgage payments, rather than the value of the property, alongside income and inflation. Here are some answers to my own questions: As an example we'll take 2023 (as a recent year, so it's still current data, although it also represents a house price peak) and 1998, just because 25 years is roughly one generation, so a 55-60 year old parent today is likely to have 25-35 year old children.
Interest rates: 5.25% (Aug 2023), 7.5% (June 1998) (BoE base rates, so mortgage rates are typically higher) interest only on £100k: £5,250 (2023), £7,500 (1998)
UK average property prices: £283k (01/2023), £66k (02/1998) ~429% increase
Inflation 03/1998 - 03/2023: 185.8% (average 2.5%pa)
Average (median) income: £681.70 per week ~£35,450 pa (gross, 2023), £334.90 pw ~£17,415 pa (gross, 1998) ~203% increase
In summary then, yes, house prices have quadrupled but average incomes also doubled and increased by 7% more than inflation, so people today are, on average, slightly better off than 25 years ago. Mortgage interest on £283k property in 2023 would be £14,860pa (or 41.9% of gross income and on a £66k property in 1998 would have been £4,950pa (or 28.4% of gross income), calculated using BoE base rates, so the real difference (13.5% of gross income), whilst substantial, is not as great as some would have us believe. In reality, of course, there are many other variables but they are too complex to consider here.

"Are we worse off than our parents?" Yes, in some ways, we are but overall we are much better off. Each generation faces new challenges but benefits considerably from the work put in by previous generations.
I love reading the comments for these videos - this one has triggered particularly polarised opinions. Remember that you will reap what you sow - what you contribute to society will be repaid to you but probably not in cash!

Good mix of banter and crucial information. Thanks!

Don’t help the whole divide & conquer thing. I’m Gen X but my life has been exactly like a Millennial. Didn’t buy until I was 40 and it was still a flat and swallows all my money. Lentils and rice.
Talk to each other, help each other, learn from each other.

Assuming parents have money to pass on as a general norm is dangerous. Lots of people have been part of families that have no hand me downs. The way forward is to show a person how to build wealth from nothing. The older generation have gone without in the delayed gratification of living once retired. Now a lot of people facing retirement don’t have the funds to retire and need equity release to live not cruise. You make out all old people to be selfish. This is not the case. I appreciate the struggle facing the young but us aging people are not coasting either. Now the government are taking chunks of our pensions through clandestine policies. Age bias is getting worse.

Brilliant guest, and great intervoew as always.

I bought my flat in London in 2002. It felt like the very last chance to get me own place as prices surged every month. Will never move

I bought my flat in London in 2002. It felt like the very last chance to get me own place as prices surged every month. Will never move