Internet slams millionaire for giving good advice

[big_slacker]

I did a forum search and didn't see this discussed. Seems like an Aussie RE guy said that if millennials wanted to buy their first house, they maybe should stop spending on trendy eating out, specifically avocado toast which I guess is a thing, and save their money. The internet at large responded in a mostly negative fashion, branding the guy as an out of touch millionaire who is ignoring the rise in RE prices compared to wages, etc....

http://time.com/money/4788845/millennials-home-ownership-tim-gurner-avocado-toast/

Last week, Gurner's comments during a now-viral interview with Australian news show 60 Minutes — about how freely spending money on “smashed avocado for $19” and “four coffees at $4 each” makes it harder for young people to buy houses — were met with outrage in Australia and in the United States. Some criticized his comments as glossing over factors like higher real estate costs and slow wage that growth that contribute to a more difficult marketplace for new home buyers.

Looks like he further clarified his statements and it doesn't sound like he's out of touch at all:

“I had to sacrifice a lot of social and sporting events I would have loved to take part in but I was always working at least two jobs and when I had my business I was studying at night to complete my degree,” said Gurner, who made his millions in real estate development.

And while Gurner said he thinks millennials would likely have to make similar sacrifices to get into the housing market at a young age, he added that there are many more temptations to frivolously spend money, especially with the rising popularity of social media, which he said has created a "false sense of reality."

“If you add up what people are spending today on things generations before them were not — things like online shopping, $25 movie tickets, overseas holidays, the latest iPhone or iPad the day it comes out — then it does add up and this extra money would certainly assist people getting into the market sooner,” Gurner said.

[woopwoop]

The reason people are piling on him is because he, like Trump, was gifted money for his first real estate purchase, and now he's ragging on people who can't afford to buy real estate. As stupid as avocado toast is, this guy is more entitled than any millenial.

You can be on the side of frugality and also understand that there are more structural problems in our economy that work against poor/young people. Sweeping those problems under the rug and blaming everything on overpriced lattes is just as bad, if not more so, than doing the reverse.

[BTDretire]

The reason people are piling on him is because he, like Trump, was gifted money for his first real estate purchase, and now he's ragging on people who can't afford to buy real estate. As stupid as avocado toast is, this guy is more entitled than any millenial.

You can be on the side of frugality and also understand that there are more structural problems in our economy that work against poor/young people. Sweeping those problems under the rug and blaming everything on overpriced lattes is just as bad, if not more so, than doing the reverse.

 There's always something you can find to blame, but it you're spending your money on avocado toast, overpriced lattes, online shopping, new cars, lots of gas guzzling trips, eating out, flashy clothes, expensive purses, 4 wheelers, Disneyland vacations, high heating/cooling bills, and expensive bicycles then a"structural problem" is as good as anything to shift the blame to.

[kite]

He should have taken good advice rather than try to dispense some.

Matthew 7:6. Do not cast your pearls before swine.  The will trample them under their feet and turn and tear you to pieces. 

[Cranky]

It inspired me to make avocado toast, which is quite delicious!

[big_slacker]

The reason people are piling on him is because he, like Trump, was gifted money for his first real estate purchase, and now he's ragging on people who can't afford to buy real estate. As stupid as avocado toast is, this guy is more entitled than any millenial.

You can be on the side of frugality and also understand that there are more structural problems in our economy that work against poor/young people. Sweeping those problems under the rug and blaming everything on overpriced lattes is just as bad, if not more so, than doing the reverse.

Is he? Googling says he went in a friend to do his first flip (friend brought the $$, he did the work) took the profits from that plus a LOAN (that he paid back with interest) from gramps to finance a larger loan on another property. That sounds a whole lot like leveraging relationships and taking risks in a business, not entitlement?

FWIW I don't think he was trying to say spending was the ONLY issue. I've read a few more articles about the guy after reading the initial one, and he mentions that GIVEN the current market why would you hamstring yourself by cutting off your income for things that don't really matter? He also advises being realistic and moving to a cheaper area (even city) for a first house, or starting with an investment property and trading up, etc.

Also: I just took an avocado, smashed it up with some lime and spread it on a baguette with fresh ground salt and pepper. Freakin delicious! Cost me $2 in ingredients I'd guess. Waterfront property here I come!!

[Blissful Biker]

 There's always something you can find to blame, but it you're spending your money on avocado toast, overpriced lattes, online shopping, new cars, lots of gas guzzling trips, eating out, flashy clothes, expensive purses, 4 wheelers, Disneyland vacations, high heating/cooling bills, and expensive bicycles then a"structural problem" is as good as anything to shift the blame to.

Well said.

[redbird]

His real problem is giving advice like that to a general audience. I've found that most people tend to get defensive about how they spend their money if you point out things like that. The people that don't are the ones who are ready for a face punch and WANT advice on how to improve their finances.

[shuffler]

I did a forum search and didn't see this discussed.

Previous discussion:
https://forum.mrmoneymustache.com/antimustachian-wall-of-shame-and-comedy/millennials-cant-buy-homes-because-theyre-wasting-money-on-avocado-toast/

[lemonde]

The reason people are piling on him is because he, like Trump, was gifted money for his first real estate purchase, and now he's ragging on people who can't afford to buy real estate. As stupid as avocado toast is, this guy is more entitled than any millenial.

You can be on the side of frugality and also understand that there are more structural problems in our economy that work against poor/young people. Sweeping those problems under the rug and blaming everything on overpriced lattes is just as bad, if not more so, than doing the reverse.

This is one of the primary failures of Mustachianism. It's founded on the cult of bootstrappingism, which is good for motivating motivated individuals, but also cultivates a lack of empathy and alienation toward society, as well as an unhealthy dose of social Darwinism (much like lead; any amount is too much). I can pay off my house in my 20s and hold multiple advanced degrees while recognizing grave injustices exist in our country's income distribution, housing market, and educomplex.

[SwordGuy]

The reason people are piling on him is because he, like Trump, was gifted money for his first real estate purchase, and now he's ragging on people who can't afford to buy real estate. As stupid as avocado toast is, this guy is more entitled than any millenial.

You can be on the side of frugality and also understand that there are more structural problems in our economy that work against poor/young people. Sweeping those problems under the rug and blaming everything on overpriced lattes is just as bad, if not more so, than doing the reverse.

This is one of the primary failures of Mustachianism. It's founded on the cult of bootstrappingism, which is good for motivating motivated individuals, but also cultivates a lack of empathy and alienation toward society, as well as an unhealthy dose of social Darwinism (much like lead; any amount is too much). I can pay off my house in my 20s and hold multiple advanced degrees while recognizing grave injustices exist in our country's income distribution, housing market, and educomplex.

Quite true.  It's also possible to simultaneously realize that some people are just lazy whiners or self-destructive losers who will never be as useful as a fresh pile of manure (which at least can be used to fertilize something so it will grow better).
Or, in one of the more glaring failures of modern Liberalism, it's not possible to realize that and therefore the search for someone to tsk-tsk must proceed with a vengeance.

[aceyou]

The reason people are piling on him is because he, like Trump, was gifted money for his first real estate purchase, and now he's ragging on people who can't afford to buy real estate. As stupid as avocado toast is, this guy is more entitled than any millenial.

You can be on the side of frugality and also understand that there are more structural problems in our economy that work against poor/young people. Sweeping those problems under the rug and blaming everything on overpriced lattes is just as bad, if not more so, than doing the reverse.

This is one of the primary failures of Mustachianism. It's founded on the cult of bootstrappingism, which is good for motivating motivated individuals, but also cultivates a lack of empathy and alienation toward society, as well as an unhealthy dose of social Darwinism (much like lead; any amount is too much). I can pay off my house in my 20s and hold multiple advanced degrees while recognizing grave injustices exist in our country's income distribution, housing market, and educomplex.

I don't know, I get the impression that MMM is quite liberal on social issues.  He doesn't complain about taxes, and my impression is that he'd gladly advocate for higher taxes if it increased the safety net for the those in systemic poverty, increased people's access to health care, etc. 

It's quite explicitly stated on the blog that this site exists is to give strategies for people who ARE or can become high earners/savers, not to suggest that everyone in our society has a remotely equal shot at doing it.   It's one of the things I respect about this community.  People hold high expectations of themselves, but recognize that life has dealt most of us an unfairly good hand, so we dang well play it very well and be good citizens along the way. 

[LonerMatt]

Property in Australia is verging on unattainable for many people, regardless of their breakfast habits.

If eating a $15 breakfast once a week is the difference between owning a home in a city where average price is $1 million (Sydney) or $800k (Melbourne) than that's just confusing maths.

The readers of MMM continue to show a shocking lack of humanity. Bad spending makes you a 'piece of shit', living in a housing bubble as a young person sets you up for derision, but standing as a conventional success and lording it over younger people (and this IS lording it over people, the avocado toast comment was made originally by someone else, he's using it to tease and attack, not as an of-hand remark) is socially acceptable.

In a highly developed and first world country like Australia, with generally high wages and low unemployment it should not be necessary for anyone to hold down two jobs and give up on socialising to own an average home. It's just bad fiscal management on the part of our government and obnoxious bullshit on behalf of boomers who are actually the worst generation of all time.

[marty998]

Property in Australia is verging on unattainable for many people, regardless of their breakfast habits.

If eating a $15 breakfast once a week is the difference between owning a home in a city where average price is $1 million (Sydney) or $800k (Melbourne) than that's just confusing maths.

The readers of MMM continue to show a shocking lack of humanity. Bad spending makes you a 'piece of shit', living in a housing bubble as a young person sets you up for derision, but standing as a conventional success and lording it over younger people (and this IS lording it over people, the avocado toast comment was made originally by someone else, he's using it to tease and attack, not as an of-hand remark) is socially acceptable.

In a highly developed and first world country like Australia, with generally high wages and low unemployment it should not be necessary for anyone to hold down two jobs and give up on socialising to own an average home. It's just bad fiscal management on the part of our government and obnoxious bullshit on behalf of boomers who are actually the worst generation of all time.

*Standing ovation*

The millennials are right - you can't just move to a cheaper area - there's nothing on the Eastern Seaboard under half a million.

And even if you do move to a cheap ass area like Broken Hill or Elizabeth Downs what then? How the hell are you ever going to trade your way up to a shoebox apartment in Sydney which by then will be worth $1.5 million?

(This post written by someone who gave up pretty much everything (social life/holidays/all manner of fun) to pay off a Sydney mortgage)

[Maenad]

The reason people are piling on him is because he, like Trump, was gifted money for his first real estate purchase, and now he's ragging on people who can't afford to buy real estate. As stupid as avocado toast is, this guy is more entitled than any millenial.

Is he? Googling says he went in a friend to do his first flip (friend brought the $$, he did the work) took the profits from that plus a LOAN (that he paid back with interest) from gramps to finance a larger loan on another property.

Yes, he is entitled. He was able to get a loan from his grandfather. It's not as good as being gifted the money, but he still had a family member with money to loan him, which most others don't have. And I say this as someone with a similar privilege (though never to that extent).

[WhiteTrashCash]

What this Australian millionaire failed to realize is that most people appreciate advice as long as it doesn't require them to modify any of their behavior. Is he correct that people need to cut their spending if they want to accumulate wealth? Yes. Is it the only factor to accumulating wealth? Of course not. But people will exaggerate what he was saying and turn him into a straw man, because they don't want to make any changes in their lives. They just want to bitch about how bad they have it.

[YttriumNitrate]

It's founded on the cult of bootstrappingism, which is good for motivating motivated individuals, but also cultivates a lack of empathy and alienation toward society, as well as an unhealthy dose of social Darwinism (much like lead; any amount is too much).

Actually...studies suggest that much like needing a little bit of arsenic, a little bit of lead is a good thing.
https://www.ncbi.nlm.nih.gov/pubmed/3776240

[lemonde]

It's founded on the cult of bootstrappingism, which is good for motivating motivated individuals, but also cultivates a lack of empathy and alienation toward society, as well as an unhealthy dose of social Darwinism (much like lead; any amount is too much).

Actually...studies suggest that much like needing a little bit of arsenic, a little bit of lead is a good thing.
https://www.ncbi.nlm.nih.gov/pubmed/3776240

A 1986 study on rats doesn't apply to humans; lead has been a recognized human toxin for at least 4,000 years (since 2,000 BC!) and there have been plenty of studies in the 20th and now 21st century indicating that there are no acknowledged safe levels of lead in the human body. This is a 151-page report from 2013 detailing as much: http://onlinelibrary.wiley.com/doi/10.2903/j.efsa.2010.1570/epdf

The  CONTAM  Panel  concluded  that  the  current  PTWI  of 25 μg/kg b.w. is no longer appropriate as there is no evidence for a threshold for critical lead-induced effects.

In 1985, the U.S. Environmental Protection Agency (U.S. EPA) considered deriving an oral reference dose (RfD) for lead, but judged it inappropriate, given the evidence that some adverse health effects (e.g.  alterations  of  some  blood  enzyme  levels  and  of  children's  neurobehavioural  development) occurred at blood lead levels so low as to be essentially without a threshold (U.S. EPA, 2004). 

n  2007, the Agency  of  Toxic Substances  and  Disease  Registry (U.S. ATSDR, 2007)  published the document ―Toxicological  profile for  lead‖,  in  which  no minimum risk levels (MRLs) for lead were derived “because  a  clear  threshold  for  some  of  the  more  sensitive  effects  in  humans  has  not  been identified.

However,  since  it  was  not  possible  to  identify  a  threshold  for  the  association between lead exposure and decrements in intelligence quotient, efforts should continue to reduce lead exposure from all sources (COT, 2008). 

B-Pb-dependent decrease in cognitive functions with no safe threshold.

A little bit of lead is not a good thing for a human being. No amount of lead leads to any positive effects in in vitro, child, or adult human development.

[big_slacker]

Yes, he is entitled. He was able to get a loan from his grandfather. It's not as good as being gifted the money, but he still had a family member with money to loan him, which most others don't have. And I say this as someone with a similar privilege (though never to that extent).

This discussion is turning into a morass of projections and speculation, if I was attempting to troll with my OP I'd definitely be happy. :D

FWIW what you describe above is privilege (as you rightly say later) not entitlement. There is a big difference between having resources and feeling like you're owed a certain lifestyle or treatment. We don't really know if he is/was entitled or not.

Also the post a few up about MMM readers lacking humanity and calling people pieces of shit for bad spending habits is way out of left field. Nothing like that was said or implied in any way by anyone on the thread that I can find. It is acceptable here and I think most places to call out a problem when you see it, whether that problem is real estate bubbles or complaining about affordability while you buy overpriced food and take expensive vacations.

I think MMM readers in general trend toward pragmatism instead of fatalism. Maybe a bit on the judgy side, but that is entirely human. :D

FWIW-I'm not a boomer or a millennial, I don't live in AUS, have purchased a home but am currently enjoying renting and also due to this discussion have discovered that avocado toast is delicious!

[oneyear]

@big_slacker try crushed avocado with siracha sauce and a couple of poached eggs on top.

TO DIE FOR!

[Zikoris]

I'm always baffled by the modern obsession with identity politics. Like seriously, who cares? If someone gives good advice, who gives a shit if they're a legit bootstrapper, got a loan from a relative decades ago, are an alien from outer space, or are a broke mystic who comes up with said advice from reading tarot cards and entrails? Why not just judge the advice on its own merits?

As far as I'm concerned, "Put your money towards solid investments rather than frittering it away on bullshit" is really good advice, and the value of said advice does not change based on whether it's me saying it versus some rich dude.

[big_slacker]

@big_slacker try crushed avocado with siracha sauce and a couple of poached eggs on top.

TO DIE FOR!

Sriracha is an excellent idea, thanks!

[LonerMatt]

I don't understand why people think that is what he is saying, though.

There are three very important contextual factors that mean he is NOT giving out that standard advice:

1. The Australian housing bubble - prices are absurd and suggesting people would be able to afford a home (which are north of $800,000 in the most populous cities) because they stop spending $15-$20 ONCE A FUCKING WEEK is bad advice, it's bad maths, it doesn't add up, it's BULLSHIT.

2. The avocado toast comment has a particular history here that everyone is ignoring. The comment was originally made in Melbourne, as a write in letter in a newspaper (the Herald Sun IIRC). In this letter a wealthy boomer wrote that she thought that millenials were essentially whingy and stupid and don't appreciate sacrifice as she did (back in her day when property was much more affordable, oh the sacrifices) - she made a particular attack on 'avocado toast' as emblematic of millenial double standards: wanting an expensive brunch and a home. Needless to say she got dragged through the mud, again for suggesting saving pennies is going to get you much closer to a $1,000,000 home. This bloke is just regurgitating that exact comment, and he's doing it to spite people and annoy them.

3. He's not acknowledging that many people are priced out of the market, regardless of their spending habits. If you're making $30k a year in a field that's probably going to disappear in 10 years you are not able to afford a house. Again this is Australia - we're a wealthy first world country with the second-lowest population density on the planet. Everyone should be able to afford a house. Almost nothing is as abundant than land here. But through bad government management many people are currently going to be permanent renters, and renting is a bad deal here, renters have almost no rights and rents are all short term. This is a serious problem for families who are probably going to be renting for 5, 10, 15, 20 years.

Sorry for being abrasive but this guy is full of shit and poking a bees nest to get a rise.

[lemonde]

^ The "stop buying cheese and you can have a house too" condescension is unfortunately a big part of how many Americans (and a great many Mustachians) think. It's part of why we still don't have universal healthcare ("stop buying soda and you can afford great medical care.").

[life_travel]

Loner Matt you are forgetting the fact that Tim (guy on TV) also said that you CAN buy property if you think outside of big cities , buy with family , friends , etc . Someone who is on a minimum wage of course won't be able to buy in Sydney central , same as in New York , London or other worlds expensive cities. And yes, there is life outside Sydney CBD :)
How do you know baby boomers didn't struggle ? When I talk to older people a lot of them say they never went on overseas trips, cooked at home and shared 2 bedroom house with 2 kids, etc.
Younger professionals in our days holiday overseas every year , eat out EVERY week, some pay $60 for gel nails , I see it at work all the time.
Sometimes you just can't have it all.

P. S. I'm not a baby boomer :)

[Paul der Krake]

^ The "stop buying cheese and you can have a house too" condescension is unfortunately a big part of how many Americans (and a great many Mustachians) think. It's part of why we still don't have universal healthcare ("stop buying soda and you can afford great medical care.").

No, it's "stop buying cheese and you can have a house you can afford". Buying a home in a high-demand area is no different that buying a home with gold-plated handles on every door.  It's placing a premium on a scarce resource.

[marty998]

Loner Matt you are forgetting the fact that Tim (guy on TV) also said that you CAN buy property if you think outside of big cities , buy with family , friends , etc . Someone who is on a minimum wage of course won't be able to buy in Sydney central , same as in New York , London or other worlds expensive cities. And yes, there is life outside Sydney CBD :)
How do you know baby boomers didn't struggle ? When I talk to older people a lot of them say they never went on overseas trips, cooked at home and shared 2 bedroom house with 2 kids, etc.
Younger professionals in our days holiday overseas every year , eat out EVERY week, some pay $60 for gel nails , I see it at work all the time.
Sometimes you just can't have it all.

P. S. I'm not a baby boomer :)

I get what you are trying to say and agree with the sentiments. However, where are all of these "starter" homes the boomers keep telling young people to buy? 2 bed houses don't exist anymore - all of the new estates in the north and south west are minimum 4 bedders, and H&L packages start from well over $700k these days in SYdney, and those places such as Schofields or Leppington are 50-60km from the CBD. Commuting anywhere else besides the CBD requires you to be stuck in traffic for 4 hours a day, paying exorbitant tolls.

Your average 2 bed terrace house in Sydney goes for $1.5m+. We're just in that awful sweet spot where prices are sky high but there's not really much that can be done about it until the whole edifice slowly deflates.

[inline five]

What pisses me off is Boomers benefited from a prolonged 30 year period of lowering interest rates making bonds and RE a solid investment. These days we must put way more money into a much higher risk portfolio and even then returns are expected to be significantly lower than over the last 30 years.

In most areas the smaller starter homes are either in ghettos nowadays or in the bigger cities they are overinflated along with the rest of RE. We really need another deflationary period like 2008-2009 here in the US which would hurt but long term but would make us a lot more competitive with overseas competition.

[Sydneystache]

Here's the take from The Straits Times: eat advocado toast at home, don't drink Starbucks, dye your hair at home, and hey, maybe you will be able to save for a home...in 62 years

https://twitter.com/stcom/status/869166071034527745

[WhiteTrashCash]

Why are people so hellbent on buying million dollar houses in big cities? When I decided to get my life in order, I moved to a suburb of a major city. A 45 minute train ride away and I don't actually work in the big city. Therefore, I was able to buy a reasonably priced house. There are plenty of places where people can live in any country where they can have a good-paying job and not pay a million dollars for a house.

[vseddie]

Why are people so hellbent on buying million dollar houses in big cities? When I decided to get my life in order, I moved to a suburb of a major city. A 45 minute train ride away and I don't actually work in the big city. Therefore, I was able to buy a reasonably priced house. There are plenty of places where people can live in any country where they can have a good-paying job and not pay a million dollars for a house.

True that. Looking to downsize my 250k house to a 180k apartment here 30mins north of Brissy. My friends say i live in the "slums" but id rather be mortgage free in a few years than a debt slave for decades.

[life_travel]

^^ exactly . I do get it that Sydney is very expensive but why not move to cheaper area? If home ownership is so important ..just bought 2 bed unit in Brisbane in a good area for 250k :)
Then we'll have to decide if we want to sell our 3 suburban bedder or rent it .

[LonerMatt]

Why are people so hellbent on buying million dollar houses in big cities? When I decided to get my life in order, I moved to a suburb of a major city. A 45 minute train ride away and I don't actually work in the big city. Therefore, I was able to buy a reasonably priced house. There are plenty of places where people can live in any country where they can have a good-paying job and not pay a million dollars for a house.

You can be ~1 hour from the city in Sydney and still be paying ~$1 million. Marty can provide better figures (I don't live in Sydney, so my knowledge of how far things are isn't amazing).

If you were, say, 15 minutes from the city the median would be, jeez, like 2 million?

Loner Matt you are forgetting the fact that Tim (guy on TV) also said that you CAN buy property if you think outside of big cities , buy with family , friends , etc .

There are some communable satellite cities, but very few. Australia is among the most urbanised countries in the world, and the overwhelming majority of the jobs are NOT in small cities because, apart from about 5-6 there aren't any (there are metropolises and towns here, and not much in between). Not every career will have work in the towns.

But you know what, in smaller towns prices are rising. Mildura - 650km from the State Capital - a very isolated town - median house price is rising a lot, and average wage is substantially BELOW the median. Great combination for equity and society.

Someone who is on a minimum wage of course won't be able to buy in Sydney central , same as in New York , London or other worlds expensive cities. And yes, there is life outside Sydney CBD :)

Sure, like Parramatta $1million median house, $600k median price for a unit - 23km from the Sydney CBD. Or Campbelltown, 50km from Sydney - $585k median house price and a commute that'll destroy your will to live. We aren't talking about 'central' when we're talking about unaffordable. We're talking about almost everywhere.

How do you know baby boomers didn't struggle ? When I talk to older people a lot of them say they never went on overseas trips, cooked at home and shared 2 bedroom house with 2 kids, etc.
Younger professionals in our days holiday overseas every year , eat out EVERY week, some pay $60 for gel nails , I see it at work all the time.
Sometimes you just can't have it all.

I know because in Australia a house price was 3-4x average yearly wage. Now it's about 15-20x. That's a whole lot more struggle and a whole lot less luxury. Yes BB's didn't do everything, and travel is something that's become much more affordable.

Can't have it all does not equal not being able to own a house if you can't get a loan from your parents (something that was suggested by a Parliamentarian) or if you're not making above average wages. That's not something that's acceptable to me as an Australian and I'm kind of shocked I have to suggest to people that for more and more people priced out of owning a home in a place of rising inequality is not ethical or acceptable.

[LonerMatt]

^^ exactly . I do get it that Sydney is very expensive but why not move to cheaper area? If home ownership is so important ..just bought 2 bed unit in Brisbane in a good area for 250k :)
Then we'll have to decide if we want to sell our 3 suburban bedder or rent it .

...because it's not that simple.

I've moved more than most people, and I'm extremely comfortable with moving. But what about my friends who are tied to family to a much greater extent than I am? Is it fair to say 'just move to Brisbane and see your aging parents whom you love once a year instead of three times per week'? Is that fair? Is this acceptable? Given WHY housing prices are high (mismanagement by federal government) is that really something we should be telling people to choose between?

If I moved to a cheaper area I'd either lose the woman I love, or she'd have to quit her job and not find work in a comparable field. Is that fair? Again, consider the reasons that we have such high prices are because of bad management, not because of my individual greed or inflexibility.

[bb11]

The reason people are piling on him is because he, like Trump, was gifted money for his first real estate purchase, and now he's ragging on people who can't afford to buy real estate. As stupid as avocado toast is, this guy is more entitled than any millenial.

You can be on the side of frugality and also understand that there are more structural problems in our economy that work against poor/young people. Sweeping those problems under the rug and blaming everything on overpriced lattes is just as bad, if not more so, than doing the reverse.

This is one of the primary failures of Mustachianism. It's founded on the cult of bootstrappingism, which is good for motivating motivated individuals, but also cultivates a lack of empathy and alienation toward society, as well as an unhealthy dose of social Darwinism (much like lead; any amount is too much). I can pay off my house in my 20s and hold multiple advanced degrees while recognizing grave injustices exist in our country's income distribution, housing market, and educomplex.

Amen.

The problem is assuming every young person who is struggling is burning all their money on "avocado toast" or the equivalent. The majority of 25 year olds in the US don't have a college degree, their median income is maybe $35k per year, and many of the same people who don't have a degree still have student loan debt. It's darn tough to be in that spot, but many people in that situation can be frugal and still be near networth = $0 by age 30.

Are some people struggling just whining to avoid solvable situations? Sure. But many are also struggling because they are in a tough spot with no easy answers. Implying they all just need to "cut out the avocado toast" is so unbelievably wrongheaded. A recent quote by Jack Bogle sums it up nicely:

"Question: A lot of people say America is facing a retirement crisis where people haven't saved enough money. How do we improve our current system?

Jack Bogle: First, probably pretty close to half our population is simply in no position to save. If you're making $20,000 a year and someone says you have to put 15% away, you will be laughed out of the room. It's a nice idea, but you're going to have to depend on Social Security. I'm convinced Social Security has been -- and will continue to be -- a good investment. It's protected. It has a cost of living hedge. You can't take the capital with you, but it's a very good plan for all of us. Particularly for people who have nothing else to add. I'm not saying it will be easy to live on Social Security, but that's the reality."

Source: http://money.cnn.com/2017/03/08/investing/vanguard-jack-bogle-interview/

[Paul der Krake]

I've moved more than most people, and I'm extremely comfortable with moving. But what about my friends who are tied to family to a much greater extent than I am? Is it fair to say 'just move to Brisbane and see your aging parents whom you love once a year instead of three times per week'? Is that fair? Is this acceptable? Given WHY housing prices are high (mismanagement by federal government) is that really something we should be telling people to choose between?

If I moved to a cheaper area I'd either lose the woman I love, or she'd have to quit her job and not find work in a comparable field. Is that fair? Again, consider the reasons that we have such high prices are because of bad management, not because of my individual greed or inflexibility.

I don't know enough about the Australian market to comment on the accusation of federal mismanagement, but in general, I'm totally okay with people being priced out of desirable areas. It sucks to be one of them, but the alternative of creating two distinct markets for people who happened to be here first and everyone else, that's way worse.

[LonerMatt]

You should have stopped with 'I don't know enough', because you really don't.

[Paul der Krake]

You should have stopped with 'I don't know enough', because you really don't.

Are you suggesting there is something materially different about the Australian housing market that sets Sidney apart from New York, London, Singapore, Paris, San Francisco, and dozens other cities where affordability is a problem, or are you just being rude?

[Sydneystache]

You should have stopped with 'I don't know enough', because you really don't.

Are you suggesting there is something materially different about the Australian housing market that sets Sidney apart from New York, London, Singapore, Paris, San Francisco, and dozens other cities where affordability is a problem, or are you just being rude?

I think he is in love. As he wrote, he does not want to move to a cheaper area because he will lose the woman he loves.

Unfortunately, people judge where other people live so if he moved to a less desirable area, said woman might dump him for someone who lives in a more desirable area.

There is a lot of snobbery in Sydney when it comes to where one lives. I live in the more affordable side of Sydney where it is a combination of aspirational and down-to-earth people. You go to places like Bondi or the northern beaches, and the snob meter goes up big time especially if you tell them you're a "westie."

The closest analogy would be the Bronx or South London but like all these places, they are gentrifying and prices are moving up.

There are places in south-west Sydney that are affordable but they get called shitsville because of the presence of housing commission (housos) places. Busby anyone? 45 minutes to the CBD and nowhere near the million dollar median.

At the end of the day, some people want to rent and eat avo toast for the cafe lifestyle. But only the determined some would want to move to the more affordable areas because of the snob factor. I am sure there is a study somewhere where CVs are ignored because their postcodes are not in the nice parts of Sydney.

But hey, it is about priorities in life - rent in Bondi or buy in Busby? Avo toast or pan y cebolla (bread and onion) as the Spanish would say.

[LonerMatt]

You should have stopped with 'I don't know enough', because you really don't.

Are you suggesting there is something materially different about the Australian housing market

Yes, because it's not just Sydney, it's many, many parts of Australia. The parts where the most work is, the most people live, the most families are and where the many people are affected.

I do not think that this is a uniquely 'lonermatt' argument - I think many people think this too.

I wouldn't go around posting in a thread about Singaporean housing markets like I knew what I was talking about because I don't. It's goofy!

[LonerMatt]

You should have stopped with 'I don't know enough', because you really don't.

Are you suggesting there is something materially different about the Australian housing market that sets Sidney apart from New York, London, Singapore, Paris, San Francisco, and dozens other cities where affordability is a problem, or are you just being rude?

I think he is in love. As he wrote, he does not want to move to a cheaper area because he will lose the woman he loves.

Actually, if you read what I wrote I've lived in many cheap areas - including many most Australians don't really think of or know about. But being in a relationship changes things. It's asinine to say 'well the market is in a bubble, and your home is unaffordable, so why don't you move?' because moving for many means giving up people.

[life_travel]

Thank you Sydneystache for debunking the myth that all Sydney properties are 1 million plus . I was quietly sure that there were cheaper alternatives out there but was too lazy to check realestate.com.au
The whole point is yes , AU prices are high but if someone wants to live in desirable area sacrifices must be made. Personally we had it so hard when we started , lost so much in GFC , I cried so many times in 2009-11 but what can you do? Two options : either complain and want situation magically resolved or work hard , be flexible and frugal.
By the way it's just a personal anecdote , not a direction that my way is the right way :)
I bet none of the baby boomers were gleefully rubbing their hands together when they were buying their first houses , thinking that they are going to be worth millions 40 years later .
Who knows what awaits us?

[Sydneystache]

You should have stopped with 'I don't know enough', because you really don't.

Are you suggesting there is something materially different about the Australian housing market that sets Sidney apart from New York, London, Singapore, Paris, San Francisco, and dozens other cities where affordability is a problem, or are you just being rude?

I think he is in love. As he wrote, he does not want to move to a cheaper area because he will lose the woman he loves.

Actually, if you read what I wrote I've lived in many cheap areas - including many most Australians don't really think of or know about. But being in a relationship changes things. It's asinine to say 'well the market is in a bubble, and your home is unaffordable, so why don't you move?' because moving for many means giving up people.

So don't move. Continue to rent to be with people you want to be with. The whole point is the whingeing that comes about when wanting to live in an HCOL and the hurdles to buy a home in said HCOL. If you can't afford to buy in an HCOL, whingeing you can't buy a home is not going to change that reality. People generally sacrifice a lot of things to buy a home and obtain a mortgage including living with parents, couchsurfing, housesitting, massively cutting down on expenses, becoming FIFO or moving away. It's called choices. You sacrifice home ownership to be with the one you love then that's your choice. We all make them.

[urbanista]

^^ exactly . I do get it that Sydney is very expensive but why not move to cheaper area? If home ownership is so important ..just bought 2 bed unit in Brisbane in a good area for 250k :)
Then we'll have to decide if we want to sell our 3 suburban bedder or rent it .

...because it's not that simple.

I've moved more than most people, and I'm extremely comfortable with moving. But what about my friends who are tied to family to a much greater extent than I am? Is it fair to say 'just move to Brisbane and see your aging parents whom you love once a year instead of three times per week'? Is that fair? Is this acceptable? Given WHY housing prices are high (mismanagement by federal government) is that really something we should be telling people to choose between?

If I moved to a cheaper area I'd either lose the woman I love, or she'd have to quit her job and not find work in a comparable field. Is that fair? Again, consider the reasons that we have such high prices are because of bad management, not because of my individual greed or inflexibility.

100K skilled migrants arriving to Australia each year have the same problems. Aging parents are left behind. Spouses can't find professional work. Still, they move to find better opportunities elsewhere.

My parents followed me to Melbourne. I have to support them financially as they have not enough to support themselves. That delayed my FIRE by several years.

[Sydneystache]

Thank you Sydneystache for debunking the myth that all Sydney properties are 1 million plus . I was quietly sure that there were cheaper alternatives out there but was too lazy to check realestate.com.au
The whole point is yes , AU prices are high but if someone wants to live in desirable area sacrifices must be made. Personally we had it so hard when we started , lost so much in GFC , I cried so many times in 2009-11 but what can you do? Two options : either complain and want situation magically resolved or work hard , be flexible and frugal.
By the way it's just a personal anecdote , not a direction that my way is the right way :)
I bet none of the baby boomers were gleefully rubbing their hands together when they were buying their first houses , thinking that they are going to be worth millions 40 years later .
Who knows what awaits us?

My mother had the 18% interest rate and the major banks refused to give her a mortgage so she went to a credit union instead. Hers was the fibro shack that is now a multi-million dollar house. As for us, who knows, am thinking we will have multi-generational families in Sydney similar to European, African, South American and Asian families which is going to be a change to the Anglo culture of "You're 18 now, here's your bags and you can piss off."

The bright side to Sydney's HCOL is we might see outward migration into regional areas as a result of city escapees and influx. There are plenty of nice regional cities in NSW - Wagga, Mudgee, Orange, Dubbo, Tamworth, towns up and down the coast. The New England Hinterland with Byron Bay is going to be pretty autonomous soon. The influx might compel governments to improve infrastructure in those areas too, the numbers count after all. There's still plenty of growth in this state yet.

My anecdote: went to the Hunter Valley (Broke) a month ago. The NBN IS making a difference.

[urbanista]

Sydney's land is highly desirable due to proximity to the best jobs and highly restricted by natural forces. I wonder what exactly can be done by the government to significantly reduce prices? The only thing that can be done (imho) is to deeply cut immigration numbers.

[Sydneystache]

Sydney's land is highly desirable due to proximity to the best jobs and highly restricted by natural forces. I wonder what exactly can be done by the government to significantly reduce prices? The only thing that can be done (imho) is to deeply cut immigration numbers.

Limit immigration into cities but not regional areas which would be hard to monitor.

Increase density near the harbour but tell the people living within 5km of the CBD. The Sydney basin is enormous bounded by the Blue Mountains/Hawkesbury/Royal National Park. Singapore is smaller than the Greater Sydney area (719km2 vs 12,368m2) with the same population size.

I drove past Parramatta the other day and I can't believe how many high rises there are now. Why isn't that happening in Bondi, Vaucluse, Mosman or Balmain? If you have 50 storey apartments instead of houses within 5km of the CBD that is going to create supply the way Melbourne Docks did. There are downsides to that of course but it is unfair that western Sydney is copping all the high rises (see Liverpool) when they should really all be near the CBD.

The other way is to increase train lines ala London but governments love PPP and it is too expensive for us. This M4 Westconnex issue is so wasteful on so many levels, that it will just increase traffic congestion and not address the underlying problems. We have 5M people. They all can't drive in and out. Once the tolls come, it is going to create an inequality issue that will be a congestion nightmare.

[limeandpepper]

but what can you do? Two options : either complain and want situation magically resolved or work hard , be flexible and frugal.

I'm happy to be flexible and frugal, but that doesn't mean I don't find it fucking annoying when someone doles out sanctimonious "advice" and goes on about how awesome they are because they worked hard and saved, and doesn't acknowledge that they were lucky that they happened to have bought before prices went insane, and that things are more difficult now even if one works hard and save. This is why these avocado toast dudes (this one and the one who started it all last year) are copping so much flack. A friend of mine told me about a house she saw that she liked that is going to auction. I checked the prices online. It's estimated to go for around $1.6 million. It sold 11 years ago for $400k. Now, I personally have no interest in buying this place and I don't feel entitled to owning such a place, but still, when I see things like that, it's pretty obvious to me that there is a bit of a problem here that can't be solved merely by being frugal.

I think the home ownership thing would be less of a problem if renters have more rights here. Longer-term leases would be great for people who crave more stability. And as for me, I would like to foster pets, but last I checked, when I filtered results after clicking on the "pet-friendly" box, less than 1% met that criteria (only 12 properties remaining that I can rent for $400/week or less, as opposed to 1200+), which kind of sucks. So yeah, I think there are practical things that can be done to help the housing situation in Australia, and dismissing ALL the people who complain as being frivolous spenders is not one of the things that help.

[LonerMatt]

Thanks LnP you're a legend.

Last post on this because I'm clearly a bit too aggressive about it:

1. Bad policy makes house prices rise. Negative gearing, plus little to no public housing. In Australia prices have risen 100s of percent.
2. Wages have NOT increased in line with that
3. More people cannot afford a home
4. Renter's rights are minimal and hardly enforced (and at times difficult to enforce), no long term leases, no modifications, extortion, short times to be kicked out, etc

This is not fair and there's nothing skipping a breakfast with a friend is going to do to change that.

It's particularly upsetting not because it affects me (I'll be fine) but because most of the people I work with (poor white people in jobs that have already evaporated) are essentially becoming homeless in greater numbers. It's not their choice, it's bad policy, and I'm not OK with that.

I still think MMM'ers lack empathy - there are good people with decent money skills who get hit hard by bad policy and forces beyond their control. People get fraught and get stuck, get shafted and fail and that's sad. I find it really unfortunate to meet hardship with a cold 'you have choices' attitude. A lot of people don't have those choices and pretending they do is galling.

[Sydneystache]

@LonerMatt we still have a welfare safety net system that America's homeless wished they did; a healthcare system that ensures we don't pay ludicrous amounts for ordinary operations; and services that governments still subsidise but are at the risk of being cut. I want CGT and negative gearing cut for investment properties.

But, you've called my posts asinine and now cold.

Wow, sorry you don't like being pointed out there are choices we make in life but short of you entering politics and changing policies of the government, blaming everything on big bad politicians in Canberra/Brisbane/Sydney ain't going to help your cause/s in life. Why don't you blame it on globalisation? It decimated the manufacturing industry in this country and it beats the politicians in Canberra.

MMM helps people who help themselves, not those who whinge and continually make stupid decisions on consumer debts, clown cars and refuse to move to LCOL because they like the HCOL lifestyle even if it is unaffordable and unsustainable for them.

Where does MMM live? Can he afford his chosen lifestyle? Does he face punch people who make shitty decisions? Is he happy? Not a HCOL, yes, yes and yes.

You're right about the empathy though - I don't know you and you're just some random internet stranger to me. So best of luck with your choices mate.