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ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION

September 2, 2015 | Failure to launch

A best-selling Canadian author of 14 books on economic trends, real estate, the financial crisis, personal finance strategies, taxation and politics. Nationally-known speaker and lecturer on macroeconomics, the housing market and investment techniques. He is a licensed Investment Advisor with a fee-based, no-commission Toronto-based practice serving clients across Canada.

 

When I married Dorothy, shortly after electricity was invented, eight of ten twentysomethings were like me. They went to university and left home. Forever. By 1981 almost a third of people that age were still living with their parents. A decade later it was 32%. These days the number is almost half – over 45% of adult children are in the basement with Mom washing their skivvies. It’s a social phenom.

Why? Beats me, actually. Couldn’t wait to get out and bite the world.

But I’m told there are two main reasons. Economically, fewer kidults are capable of being self-sustaining as they spend longer at school, chalk up fat educational debts, then graduate with high expectations into an environment of crappy entry-level jobs and insane living expenses. Second, they have copter parents who’d rather cling than launch. Protective and cloistering, they think junior can’t possibly leave until he has a condo and enough resources to protect him from all the potential hurt out there.

But there are costs. For the Millennials, this breeds dependence while shielding them for all the valuable things you learn from suffering, penury, loss and failure. For the parents, it’s a true economic cost – up to a decade more of picking up the overhead for an adult child. CIBC just did a survey on this, announcing the results Wednesday. The kids ain’t cheap, it seems.

So, 66% of parents say they’re feeling the financial impact of supporting their adult children. Of those shouldering the burden, 47% report this is hampering their ability to save money for themselves while a fifth say it’s delaying their retirement. About a quarter state they spend at least $500 a month supporting their spawn by paying for rent, groceries or cell bills.

Meanwhile, if this blog’s any indication, a mess of these Millennials have morphed into left-leaning, bitter, Boomer-hating, entitled baby socialists who come here to praise Mulcair, Norway and higher taxes. So, perchance their parents erred by not booting them out on their pliant, soft derrieres?

Or is such a generalization beneath me?

Jennifer believes so. In fact she probably thinks I suck. She emailed me two days ago. I responded, and have agreed to publish the following letter. If I do not, she threatens to drag me behind a speeding Vespa through a Pride parade wearing a Metallica shirt. So here it is:

“Hey Garth: I think it’s about time you got an actual Millennial perspective.  It’s very fun and trendy to bash us, our spending habits, our work ethic, how weirdly intense we are about our dogs, but I don’t think the generation wars are getting us anywhere.

“Literally just days ago, you advised an Vancouver Millennial about whether she should buy or rent.  She cited that she would have to spend $2.5k a month just to get a decent place close to work.  I guess I don’t really know how you can look at that figure, compounded with falling wages and higher debt and believe it’s the renter’s fault that prices are so out of whack.

“I own my own consulting business now, but before that I worked in corporate learning and development for 8 years.  All but one of my jobs (which was later outsourced) was a permanent job.  I have been on contract, no benefits, no job security for almost all of that time.  My husband has degrees in mechanical engineering and neuroscience.  He started his first professional job on Friday after a year of part-time employment as a waiter.  He sent out around 10-20 resumes ever day during that time for professional jobs. This new contracting job will pay around $30k a year.  My father, by contrast, a Boomer poster child, worked for the same crown corp for 27 years, collected a $1M+ public sector pension, has a basement full of toys and 3 SUVs in the suburban driveway, and has the nerve to say “Every time I hear a Liberal talk I hear a hand going in my pocket.”  Yeah, Dad, you do, TO PAY YOU AND YOUR PENSION.

“Every generation has challenges, I acknowledge that. But you can’t say that Millennials have a chance to make the investment guidelines you recommend for FI when more than half of our paycheque has to go just to keep a roof over our heads.  And you must know that rent is not the only cost that has increased exponentially. It’s increasingly difficult to find permanent work that is worth doing.  Not sure when your last foray into the private sector was at the peon level, but it’s just a fact that not all jobs are worthwhile, even to the company that hires for them. Companies have gutted their development and mentorship programs and management has been left wanting for many decades.  This leads to inefficiency and layoffs.  This doesn’t even include older working generations who cannot keep up with essential technological advances in the workplace.  Again, training programs have been gutted and outsourced. Maybe they are interpreting our “frustration that our managers fundamentally don’t understand the systems our business runs on” for “entitlement and laziness”? Just a thought.

“So I would ask, please, for a little consideration with regards to how “selfish and entitled” Millennials are.  Keep in mind you literally outline financial independence guidelines which, if trends continue in the direction outlined above, will always be out of our reach.  Are we wrong for just wanting enough to meet those guidelines?  If so, why recommend them?   Are we wrong for wanting use the technology that has been promised to improve our lives?  If so, why was it developed? Are we wrong for wanting to work towards a better future? If so, why did older generations want the same thing for us?

“Pensions, employee development, even permanent and paying (remember the rise of the unpaid internship in my lifetime) jobs are vanishing and not coming back.  I’m not going to say absolutely everyone my age is a winner, but that’s also true of any generation isn’t it?  I would ask to keep things in perspective. And as for the reason why we don’t vote, consider this: there is no major political party on the landscape now that will take on climate change in a meaningful way, take necessary steps to address income and wealth inequality in this country, ensure transparency in the media and bust the corporate monopolies which pervade most of the Canadian market.  Who speaks for us?  Not really anyone, so it’s difficult to see participation in elected democracy for anything other than what it is: gently nudging someone you don’t want out of office, rather than getting behind someone who really speaks for you.

“We have our problems, but it’s disingenuous to say that we’ve created all of them. It’s disingenuous to say we’re selfish for just wanting to do what you yourself recommend.  Many problems were inherited, but are now ours nonetheless.

“All the best, Jen.”

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September 2nd, 2015

Posted In: The Greater Fool

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