0:00:00 - 0:00:21 You need to have a conversation about lifestyles of, of younger people and the cost of living. And it was with another parent, we were discussing the, the, the our, our different perceptions of the fate that they face, the world that they face and how it compares to our respective generations. She's 0:00:21 - 0:00:42 a little older than I am. And so it's, it's really interesting to see just today that I'm recording this on April 24th, this headline, first time buyers must earn 100 and 20,000 to afford the average home. Now, the the spiking cost of living is, is nothing new to the content that I produce. But here's 0:00:41 - 0:01:02 yet another example. And I, I told you this would happen, but it's going to get worse. I told you that too. And, and I've been saying things like young people today cannot do what their parents did for the most part and expect to, to encounter the same outcomes, the same success. It's a lot harder than 0:01:02 - 0:01:23 it used to be. And in this conversation with this friend of mine, she said, one of her sons who's now an adult and he's, he's working and living on his own. He said to his parents, you don't understand. I have to work three times harder to get the same results that, that you guys did when you were my 0:01:23 - 0:01:43 age and one of his parents agreed and one of his parents disagreed. And so it's probably obvious if, if you're familiar at all with the things that I've been saying which side of that argument I am on, I would agree with him and I have data. OK. Here's a piece of the data. So I already told you you can 0:01:43 - 0:02:01 look this article up if you want. But I, I think rather than spend time going over it, it, it, it's pretty much you read the headline, you get it. So what are the implications of this? And this is gonna be, it's gonna be bittersweet because I, I think it's a little funny and it's also also very sad but 0:02:01 - 0:02:21 um we're gonna go to this website that I love. It's called, I got Standards bro.com and I don't know who made this website. But every single time I go to it, it just cracks me up because from the, from the URL they chose to this art that they did. I mean, it takes a lot to, to be able to make a clip 0:02:20 - 0:02:41 art kind of picture and say so much. There's no expression on this woman's face, but you can, you can see the expression, it's just beautiful. Anyway. So this website if you're not familiar with it, what it does is it pulls actual data from the Census Bureau and it allows you to input filters to see 0:02:41 - 0:03:03 the probability or, or the percentage of men in the demographic for what you're filtering that meet the income standards that you set. That's what you're doing is you're playing with a slider and you're seeing what percent of men in the height race age and wait because you can exclude obese people fit 0:03:03 - 0:03:27 this bracket. Now, primarily this website can be used to see just how difficult it is to find men who meet those standards. And that's why it's called the female delusion calculator because in general, modern women, they vastly underestimate um the cost of being a high quality man, it's a very rare thing 0:03:26 - 0:03:52 , but that's not what we're gonna use it for here. We're actually gonna use it to answer this question. If first time buyers must earn 100 $20,000 to afford the average home. What, what quality man do you need to be in order to afford the average home? Now, of course, the quality of a person is much 0:03:52 - 0:04:13 more than their financial capability. Ok. But we're just doing it based off of that for the sake of data, there's no national database of someone's courage, right? So, but we do have income data and we're gonna use that and then we'll, we'll flip it around and uh look at it from the opposite perspective 0:04:12 - 0:04:31 as far as gender goes, if that makes sense in a second. So what I'm gonna do here is I'm gonna scroll down. So in the question, what we're trying to get at is how realistic is it to expect if you're a young person that you're gonna own your own home someday? And I wanna just put my cards on the table 0:04:30 - 0:04:56 and express that for me, this is not the dichotomy between owning a home and renting for life. Like this article presents it. There's a lot of really bad uh ideas right now around the concept of renting. There's bad information such as why would you rent when it's so much? You're just, you're just dumping 0:04:56 - 0:05:13 . Um I'm sorry, why would you buy it used to be when a couple of years ago people would say, why are you rent? You're just, why are you renting? You're just dumping money down the toilet, buy a house, your mortgage will be the same as your rent and then you'll actually own something. Well, of course 0:05:13 - 0:05:36 , that's an oversimplification because of cost of repairs and everything. But now there's at least equal. I'd argue it's, it's greater insanity in the other direction. I've seen so many people online saying why would you ever buy a home? Rent is cheaper? And you, you're never responsible for more than 0:05:36 - 0:05:53 what your lease says. Whereas when you own a home and your roof fails, now you're in the whole many tens of thousands of dollars usually. So, there are a lot of proponents arguing that renting is good and you should do it instead of owning a home. I'm gonna tell you why. That's not true. That's a strong 0:05:53 - 0:06:13 position to take. I'm not even saying that's not always true. That's not true. Why? Because you're looking at things as they are right now, but all the writings on the wall for how they're going to be very soon. What do you think is gonna happen when more and more people realize they can't afford to 0:06:13 - 0:06:33 own a home? Well, they're gonna rent. And so this huge proponent of the population that typically would go out and buy a house when I was 24 I went house hunting. Right? I, I had a degree in computer science. I was making good money. I went to go buy a house at 24. I, I may have been 23. I don't even 0:06:33 - 0:06:51 remember. I was young and I was ready. It was gonna be a nice house. It still start a house but whatever I could have stayed there the rest of my life, that's not the case today. And as more and more people in that boat now, I'm still young, but more and more people who are 28 30 32 instead of going 0:06:51 - 0:07:10 out and buying their first home, they're just, well, I'm gonna rent for life. What's gonna happen to the supply of rentals? You might say, well, people just build more. No, they won't. You should go talk to anyone that rents homes, like, like mom and pop type people, middle class people that have one 0:07:10 - 0:07:30 or more rental properties. But let's say less than three. And that's, that's a huge, huge contingent of the rental market. They are getting out of rentals for the most part and there certainly aren't people replacing them in the same numbers as they're getting out of it. Why? Because the margins keep 0:07:30 - 0:07:48 reducing it. It used to be considered an extremely stable investment one that you could throw every extra nickel you had into without too much concern that you were gonna lose it and the profits weren't great. There were riskier things you could do, but then you lose the money. So it was a stable thing 0:07:48 - 0:08:10 that you could work on over years and, and really be aggressive at. It's not that way anymore because the costs are going through the roof and the ability of people who rent homes to transfer those costs to the renters will, will be and it is and will be actively curtailed the rent control. So now I'm 0:08:10 - 0:08:34 telling you about things that will happen, rent control through other government interference where you just won't be able to charge what you used to and or if you do, if you try to, to, even if you can maintain those margins in the rent and, and the government doesn't do what they already did in COVID 0:08:33 - 0:08:56 . This isn't some shocking new thing. It's just doing what they already did in COVID saying you can't evict people or it takes longer to evict them, which is more monetary loss or you can't go after them for damages if they break stuff or, or, or there's a million different ores. Ok. So when all these 0:08:55 - 0:09:18 people start selling their houses instead of continuing to rent them, that's gonna shorten the supply. So what happens with the rentals that are left? Well, if there's rent controls, of course, this complicates the situation, but there's still a shortage and so people will stack into the apartments that 0:09:17 - 0:09:40 they can get the houses they can get and they'll start living multi families and, and many more people than normal in one location. So that's what's gonna happen. And then all of a sudden the the cost of housing will, will go up even more because the supply of housing will continue to shrink and, and 0:09:40 - 0:09:58 people will be chasing the housing market who would have rented and, and don't have the option and they'll have to pay way more than if they had just locked something in earlier. A lot of people are still sitting on the sidelines saying, well, I'm just gonna wait for the next property crash like happened 0:09:58 - 0:10:18 in 2008 to get in and I'll just save my cash. Maybe that's a good idea maybe. But we have a tendency of planning for the future based on the past, even when the conditions have changed and they're very different. It is possible that that crash never comes. It, it is guaranteed that while you're waiting 0:10:18 - 0:10:42 for it, inflation is going to eat away at every dollar that you save every dollar that you have right now that you had PRE COVID is worth something like 70% of what it was. So think about that whatever interest you're generating is probably not overcoming annual inflation. And in order to get that return 0:10:42 - 0:11:06 , you have to chase after riskier things. Anyway. So uh my, my advice is to think outside the box, I made a video called Ride the Tiger. You should check that out. There aren't too many general solutions anymore. You really have to think about your particular situation where you want to live, what you're 0:11:05 - 0:11:26 going to do for a living who, you know, all the resources you have and the the the the peculiarities of your situation to solve the puzzle for you, but it probably isn't just doing what everyone else always did. So let's look at this and answer the question, what kind of guy do you have to be? So we're 0:11:25 - 0:11:48 , we're just sketching out the ideal of a single income family. So, so what kind of man do you have to be to, to do this right, to afford the average home today? So what we're gonna do, we're going to now most modern women are only gonna be thinking about relationships with people really close to their 0:11:48 - 0:12:05 age and, and this whole video is oriented to young people, uh talking about young people, not that they're going to watch it, but some might so, but we don't wanna do that because it's gonna be really dismal and depressing. So we're gonna just broaden the age range and we're also gonna give these guys 0:12:04 - 0:12:29 an advantage by making them older. And so we're not talking about the situation like when I was 24 and we're not talking about what most modern young women think who are 1718, 19, they're looking for men who are 1718, 19. Ok? We're just gonna say no, no, no. Like what's the, what's the latest age range 0:12:28 - 0:12:50 ? A woman, a young woman would think at this age, I want the guy that I'm with to be able to afford a house and just to super duper clarify what I'm saying. I'm not saying the 18 year old lady should be looking for guys in this range. At least not for this argument. I'm not saying that I'm just saying 0:12:50 - 0:13:13 to, to make it as broad as possible and as easy and people aren't gonna complain, given the best possible chance whatever guy you end up with, what are the odds that at some point between when he's 28 and 38 he will be able to afford a home. Ok. So we're not gonna exclude marriage because you're gonna 0:13:13 - 0:13:34 be married to him. Right. This is just, we, we want the best possible number in terms of the most optimistic perspective. We won't set any standards on race, although a surprising number of people will only date people of certain races, but we're gonna ignore that. Ok. And then we're not even going to 0:13:33 - 0:13:51 play games with the height. We're just gonna go all the way down to midget. Ok? Because we, and include the fatties because we don't want to filter out anybody. We want it to be the most optimistic possible thing. And here we have to set this to 120 because that's what the news says. All right. Are you 0:13:51 - 0:14:24 ready now? Before I click this button? I wanna ask you what you think this is gonna tell us what percentage of men from 28 to 38 any race, any height. Basically. I mean, if their legs are chopped off are making 120 or better, what do you think the answer is, let's see, 10% one in 10, one in 10 men in 0:14:24 - 0:14:49 this demographic can afford to buy a house today, the average house that nice house. Now, if we drop the age, if we change any of the things that I said, we're gonna do this as optimistically as possible. This number will drop by a lot if we set it from 20 to twe 25 which the, I think the lowest bound 0:14:49 - 0:15:10 is five years. Let's just go back. Let's just change that, let's say 20 to 25. Is that the low? Still go? 18? Great. Let's do that. Let's do 18 to 23 because that's probably the demographic that most young women are looking for in men. Ok? And again, we're not gonna click this because maybe you married 0:15:10 - 0:15:43 him. Ok, we're just gonna leave ra race alone, but we're gonna be more realistic because there's a lot of women who won't date someone below, let's say 57. What's it gonna be? Now? 0.46%. I'm pausing for dramatic effect. Ok. So the, the optimistic number was one in 10, 1 in 10. Now, let me ask you this 0:15:43 - 0:16:08 . Do you think one in 10 women or I can rephrase this? Do you think only one in 10 women think? Yeah, I expect to one day own a home with my husband. No, of course not. What percentage of 18 year old women today believe that they're entitled to a home someday with their husband. It's way higher than 0:16:08 - 0:16:42 10%. It's certainly way higher than point point 4 6%. Having a home, young people do not understand that having a home for their generation will be a 1% thing. A 10% thing somewhere between the two, depending on their standards, their choices. Do you get this? Do you get what this means? Now, this isn't 0:16:41 - 0:17:06 uh a relationship video if you're a young man, you're going to have to be in the top 10% if you want to own a home one day. Now, all of this, this whole analysis has been under the assumption that you're single income, you could extend it down to double income and adjust the income down uh accordingly 0:17:05 - 0:17:32 . So, I mean, if we really wanted to do that, we can do that. Let's go back and say, I mean, for the sake of it, I'm gonna leave in the height as the more realistic number. Um, the age bracket. Let's just do, let's go back to the optimistic 28 to 38. Ok. Now, in this age range for the women, what's the 0:17:32 - 0:17:54 average salary? It's about 35,000 a year. How much does that actually add to the income after tax? So that it's gonna push the husband potentially into a higher tax bracket and then she's got additional costs of having a car having insurance, all these other things that she wouldn't necessarily need 0:17:54 - 0:18:24 to have if she didn't have a job, day care, that's a huge one. Food cost clothing for all those cute outfits for the office, whatever. Ok. So, all right, let's bring it down to 90 K and see how much this actually helps. All right, 15% you get a 5% bump. What did he do? So, now you have to be in the top 0:18:23 - 0:18:49 15% of men. Not 10. Ok. And that that's not an equivalent outcome when your wife has to work. That is not an equivalent outcome to when she doesn't. All right. So probably n said, uh, probably this is clear enough at that point, but I'm telling you, it's worse than you think. And here's the data that 0:18:49 - 0:19:13 shows it. And so young people have to get realistic about this. If you're a guy, you really have to, to bust it out today compared to the past and guess what most men are not going to. You don't have to guess about that. The data is already measured. Most men don't bust it out. And so you're gonna have 0:19:13 - 0:19:33 to do that and it's harder today than it used to be. And for women don't, you can't just think. Oh yeah, I'm gonna have a house one day. Why do you expect that the times have changed? So, I've told two people in the last week, I've talked to them about uh relatively successful people as far as things 0:19:33 - 0:19:59 go. I've talked to them about this in one. I'll tell you, I sat down with one guy very successful financially. I'll, I'll just skip all the details and he's got all of his kids at home still, but not for long. And I said essentially, has it ever occurred to you that there's basically no chance that any 0:19:58 - 0:20:17 of your Children are gonna be nearly as successful as you are. And he looked like he had seen a ghost because he knew I was right. And he had never thought of that before. He just assumed that they were gonna put their coins into the vending machine of life and get out the same soda and it doesn't work 0:20:17 - 0:20:41 that way anymore. And I, I said to him, he, he has a really big house. I said, you know, instead of spending all this money making this, this house into a dream home, he's got a lot of projects planned very expensive projects. Uh a dream home that's empty because your kids are all gonna have moved out 0:20:41 - 0:20:59 . Why don't you spend some of this money setting up situations where your kids can rent from? You, rent, rent a place from you and then it's a win win because now you're getting a bit of rental revenue and you can rent it to them below market, not too much below market, but enough that, that you're making 0:20:58 - 0:21:14 it possible for them to enjoy a slightly better standard of living than they would be otherwise. And the the benefit to you beyond helping your kids is you don't, hopefully depending on how you raise them, you don't have to worry about them stealing the copper pipes out of your house or cooking meth 0:21:13 - 0:21:36 in your kitchen, right? Or just stiffing you for rent for six months because the government says it's ok to steal. So these are things to think about. And for the past two or three generations parents didn't have to do that. But you know what? And this is maybe a positive place to end this video if you 0:21:36 - 0:22:01 go back far enough, depending on how old you are. Your grandparents or your great grandparents probably lived in a culture where, where they did, they were very involved in setting up their Children for uh success in life. Uh I'm from Baltimore originally. It's where I grew up and there were enclaves 0:22:01 - 0:00:00 in the city where uh families lived in, in clusters. And I remember hearing stories about uh the Italian part of the city. For example, it was very, it was very normal that when a child got married, their parents would buy them a house. Now, don't take that too far. It, it wasn't like a six bedroom, 0:00:00 - 0:22:47 3000 square foot house. It was a tiny little row home in Baltimore. It wasn't even new, you know, pretty run down whatever. Um But, but basically think of it in terms of just getting, helping them get established a little bit. And I've said a lot on the other side of this to foil this argument, put some 0:22:47 - 0:23:07 tension against it. It's so easy to take that too far. So some people need to be steered away in one direction towards the ideal and because they're off to one side and other people are off to the other side and there's folks out there who are putting down $50,000 down payments for homes for their kids 0:23:07 - 0:23:29 . That's probably not a good idea. But then on the other hand, there's people out there doing million dollar remodels thinking that somehow their kids who, who really aren't set up for success in life are even gonna be able to afford an apartment, let alone a house someday. And so I it's, it's up to 0:23:29 - 0:23:52 the people who have the experience and the wisdom to mentor those who don't part of that mentorship is showing them re reality. It's look at these numbers. It, it's, it's a jungle out there. It's hard. OK? And so if you're going at it with the standard historic approach, you will fail.