I was reading Bloomberg's report Recession Generation Opts to Rent Not Buy Houses to Cars. It's hard to know how to react when I read stuff like this—
For those who choose to rent not buy, there’s a price to pay, said Jeffrey Lubell, executive director for the Center for Housing Policy. By foregoing purchases of assets like homes, young people are giving up on a chance to build wealth, he said.
“What you are seeing is a delay in all the kinds of decisions that require a long-term financially stable future,” Lubell said. “That’s home purchases, that’s marriage and that’s having kids.”
[My note: it is estimated that ordinary Americans lost $7 trillion in "wealth" when house prices crashed after the bubble burst. For almost all Americans, if they have any wealth at all, home equity is the only wealth they have.]
Buy a house or give up a chance to build wealth? The key word is chance. What are the odds? Is Jeffrey Lubell just plain dumb? Or is he flat-out dishonest? Or is he simply delusional? No doubt it is some combination of all three. We might call these the Three 'D's of American life in 2012.
Michael Anselmo, 28, is one of many millennials who is forfeiting a chance to "build wealth."
The day Michael Anselmo signed a lease on his first apartment in New York City, he lost his job at Buck Consultants LLC. He spent about 10 months struggling to pay rent with unemployment benefits. Two years later he’s still hesitant to buy a home or even a road bike.
“Every decision that I have made since I lost my job has been colored by that insecurity I feel about the future,” said Anselmo, 28, who now rents an apartment in Austin, Texas, and works as a consultant for UnitedHealth Group Inc. “Buying a house is just further out on the timeline for me than it used to be.”Anselmo and many of his peers are wary about making large purchases after entering adulthood in the deepest recession and weakest recovery since World War II...
Anselmo, the health consultant who rents an apartment in Austin, Texas, says he understands such arguments [like the one Lubell made]. Even so, he can’t bring himself to buy a house.
“The logical person in me gets pissed off when I write a check every month and it just goes down the drain,” he said. “But we are very hesitant.”
If there was a logical person inside Anselmo, that person would be screaming move to _____! Fill in the blank with your favorite place to run away to. If you're not rich, don't pick France, Spain, Italy or Greece
But seriously, millennials, who are now between 16 and 32 years old, are up the proverbial creek without a paddle. In most cases, these (relatively) young people can have no security about the future. Thus, if they are sensible like Michael Anselmo, they refuse to take on new debt (for a house or car) which will only make some future personal crisis worse, and reduce their flexibility should the shit hit the fan (again).
There was more happy talk from Forbes Magazine in the July 19 story How Millennials Are Redefining Their Careers As Hustlers by Larissa Faw. You will want to remember the Three 'D's as you read this one, too.
“What do you do?” used to be a simple question. Individuals defined themselves by profession: teacher, engineer, pilot. Or by company: Con Edison, NASA, Kodak. But it was always one job, one identity.
Yes. Now the answer is: I am trying to survive!
Today’s young professionals, however, aren’t as easily categorized. I still can’t figure out what to prioritize on my LinkedIn profile. I am a journalist, marketing consultant, and co-partner for an Internet company. All are equally important to my identity.
In other words, Larissa, you have no identity, which is understandable.
And my Millennial-aged peers find themselves in similar situations. I don’t know any Millennial who self-identifies using only one “job.” “Millennials aren’t just position players,” says Ross Martin of Viacom's trend-spotting and innovation division, Scratch. “They don’t just play first base or left field. They are ‘athletes,’ and their external hard drives are wired to do many things at once.”
That's certainly one way to spin it.
This Millennial multi-careerism — which MTV/Viacom calls “sidepreneurism” — is taking over the workforce. By 2014, 36% of the U.S. workforce will be comprised of Millennials, and by 2020, 46% of U.S. workers will be Millennial-aged, per the Young Entrepreneur Council. This generation of Millennials does not identify with one company or career. They don’t work for IBM, but instead build smart computers. It might be a slight difference in semantics, but it underlines that their priorities are on their own skill set, and not on their employer.
Right, because you can't count on your employer. He may hire you today and fire you tomorrow. If you've got skills, you may be able to make it by moving from temp job to temp job.
You could put lipstick on this pig by calling yourself a consultant.
There are two parallel trends at play. Millennials are both working several jobs simultaneously and sequentially. Nearly one in four (22%) expect to work at six or more different companies during their professional lives, according to DeVry University and Harris Interactive. Only 28% expect to work for fewer than three employers during their careers...
Or, as the case may be, millennials are not working several jobs simultaneously and sequentially because there aren't any jobs to work. Either way, many, many millennials are scrambling (hustling) to survive.
Bank robbing is an honorable profession with a long tradition if you're trying to figure out some way to live. As Willie Sutton famously did not say when asked why he robbed banks, because that's where the money is! Countless bankers have robbed banks, either their own or others, especially in recent times; why not you? Selling drugs would work, too. However, there is a downside to these professions. You may get caught and tossed in the hoosegow for many years. Jail life is not the best, but if you look on the bright side, you (probably) won't have to worry about food & shelter while you serve your sentence.
For millennials, regardless of how you spin it, it is called Survival 101. If you flunk this course, your life is pretty much over, which is why so many young people take their studies very, very seriously.