In a series of articles back stateside, it appears that Gen-Yers and Gen-Xers are getting written up as the slacker generation, growing-up with more privileges, education and prosperity than the older generations, but having less of the discipline, drive, focus and wisdom of the past. For example, it has been people in their late 20’s to 30’s who have defaulted with greater frequency on their loans in the current sub-prime mess.
Daniel Costello of the Los Angeles Times explores the question here. Even Harvard Business School’s Tammy Erickson cites studies that claim 20 somethings tend to feel overwhelmed, depressed and cry more readily and easily (i.e. are more “wimpish“). Whereas MSN Money simply asks, “20- and 30-somethings are in a financial mess. Is it because [they're] dumb, arrogant or simply uneducated?
38 Comments
Why not all three?
Being an Xer myself, I have to admit that my generation (for the most part) is lazier and less realistic than even the Boomers (and not even in the league of “The Greatest Generation” or whatever they are called).
I haven’t spent much time in the States over the past ten years but, from what I see via TV and Internet, the Yers seem even worse than us.
Wow. People with lower earning ability and relatively high debt loads tend to default more often than others?
You don’t say.
# 3,
No it’s not that… it’s the younger generation’s frequency of taking on these “exotic” loans of negative amortization, adjustable rate mortgages, interest only, super balloon payment, etc. whereas the older gen tend to stick with the plain vanilla (and much safer) 30 year fixed rates.
Generation x’ers have it hard. I studied about them in my population economics course. Basically baby boomers took all your careers.
Yeah, this isn’t shocking news.
That… and they spent all our inheritance…
I would add a lengthy comment but I am too lazy.
Hummm… here’s hoping that a boomer, or better yet, someone who fought in WWII, enlighten all us lazy asses.
“it’s the younger generation’s frequency of taking on these “exotic” loans of negative amortization, adjustable rate mortgages, interest only, super balloon payment, etc. whereas the older gen tend to stick with the plain vanilla (and much safer) 30 year fixed rates.”
That’s the only way to get a loan for an average home that’s ten times your annual salary, whereas our parents were buying average homes for two or three times their annual salary.
But did they totally fail Grade 6 math? What the hell were they thinking?
From the LA Times link.
…besides, those old-timers are quickly bankrupting pension plans, collecting 4 or more times their investment while X and Y pay in, with no hope to collect anything… maybe not relevant to the US but certainly to other countries.
I think it’s even stranger when viewed from the expat perspective. I have other 20-something friends back in the US who are making less money than I am in Korea, but still buying their first homes. For young people in Korea financial solvency, without significant parental assistance, is becoming more and more of a dream.
#11 Of interest: Satirewire’s “RECORD 75 MILLION AMERICANS NOW PRETENDING THEY OWN THEIR OWN HOMES”
http://www.satirewire.com/news/0106/dream.shtml
One should be wary of painting whole age cohorts in broad strokes. I will say, though, that the current crop of twenty-somethings (those mono-symbolic generation names are stupid) has some of the most diverse, global, technologically and environmentally minded people in the history of America. One small indicator is the number of students who have studied or lived abroad. Is this trend some messed up reversal of the tendency to blame one’s faults on the parents?
Previous generations didn’t have credit cards marketed to 12 year olds.
It’s just so easy to get credit, and its just so hard to say no to constant advertising telling me I need something.
Aren’t those financially secure and frugal bastards (older generations) the ones who run the card companies and banks handing out credit to any bastard that wants it?
@ #2:
YouTube idiocy and the travails of attention junkies (PH, BS, LL) are, fortunately, not representative of everyone who is 30 years and younger.
#4,
Loans? Debt? 30 year-mortgages? What’s that?
The only loans I ever took were a very small student loan that has been long paid off, a business loan that I used to start my own company while I was still student, and a mortgage that we paid off in 5 years…and I’m a Gen-Xer.
# 18,
You’re also in the minority!
You mean all Gen X and Yers can’t live the easy life since “the greatest generation” and boomers haven’t even come close to solving all of America’s, or the world’s, problems.
It might be a different country if the members of Congress and the President weren’t all millionaires and young enough that they weren’t all suffering from Alzheimer’s. We want the young to fight our wars, but those with shaky faculties get to make all the major decisions benefiting their pocketbooks above all else. It seems that common sense has gone the way of the dinosaur, or at least Thomas Paine and the true “greatest generation” who established this country.
They’re too busy working unlike us slackers goofing around on the Internet.
They were ‘great’ for establishing the country that is now America, but they were not perfect.
# 21,
Darn… you got me there! Gotta switch to my spreadsheet before my boomer boss walks in behind me!
#19,
Nah, I’m just not American.
I’m confused. Where is the “Home Front”? The US?
Given that this blog was originated by an expat and expats probably make a majority of site visitors, “Home Front” would be the U.S.
Well sure… but who’s more likely to need to buy into such terms in order to finance a house? The twenty-something buying their first house, or the forty-something trading up from the house they’ve been paying on for the last 15+ years (and which has appreciated in value since they got it?)
Of course, I don’t think the articles are necessarily wrong, per se… after all, articles lamenting the fiscal attitudes of young people have been an occasional feature of newspapers almost since the advent of newspapers.
We may be lazy, but we’re no group of pussies. Were still the ones fighting and dying in the wars the Boomers and the Greatest Generationers started.
#10: That’s the only way to get a loan for an average home that’s ten times your annual salary, whereas our parents were buying average homes for two or three times their annual salary.
Ten times wouldn’t be so bad, try 25 times the average salary, and that’s for the college-educated group.
http://www.frbsf.org/publicati.....06-38.html
…and exactly how else can younger people with no established credit (which is apparently worse than bad credit) get a “good” mortgage. Even my student loans were prime + 1 which is exactly why I ran off to Korea to begin with…
If default = miss a payment, what is the word to mean “disappear without a trace”?
And things are only going to get worse I am affraid. One of the reasons I left teaching HS physics and chemistry in Canada is because the up and coming generation seemed to inherate the attitudes of the generation before them, but with a much inflated sense of themselves, their self-worth, and justice without responsability.
Lazy whining cowards without the self-respect to honor the contracts they signed. That makes ‘em faithless and craven in addition to having some sort of entitlement mentality… Where, exactly, is “home ownership” listed in the US Constitution or the Bill of Rights?
Zonath points out the problems with starting out on unknown or bad credit: perhaps buying a smaller house in a different location might solve some of his angst… Or developing good credit while living in apartments like the rest of us had to do…
JohnT tries to make a decent point; but unless he’s actually volunteered for and serving in the US Military, he’s just another whingey plodder trying to blame someone else for his own financial incontinence.
May you all find a better way and follow it!
Angst? I don’t know how you came up with that one. Anyhow, you’re pretty funny, so I’ll let it slide. The finger-waving grandpa act has always been a classic in my book.
I know this comment will disappear in the midst of all the VIOLENT CHINESE PROTEST discussion going on now, but some things in the paper make me wanna watch out for this before buying back into stocks:
That woman up in comment #11 still owes $325K on her mortgage. But her house is now only worth $200K. The intelligent thing to do is walk away. Drop the keys off at the bank and say “It’s all yours.” She’s only 27, her credit will recover. But if millions of Americans do this, good lord. The recovery of the retail banking sector would be slow and paaaainful.
Explains why the Federal Housing Authority is trying to find $400bil in taxpayer dollars to underwrite high risk mortgages. Anything to keep them on the books, rather than recognizing the massive write-offs.
Might happen anyway, though.
Damn, if only I had a spare $5000 floating around two years ago I’d have put it down on a $350,000 house. Or perhaps saved a bit longer and put $10,000 down on a $700,000 like Ive always wanted.
yeah and that 350,000 house would turn into a 75,000 piece of property. Not sure what you’re thinking here.
#23 I I served from 92-94!! How about you?!
Author of # 23 says, “huh?”