This is why I turn out this miserable, sexed-up blog. Sarah just wrote:
Your blog was recommended to me this afternoon by a colleague and I have been glued to it for the last hour. I’ve only managed to read about ten of your posts, but am already excited by the fact that I am one of those people obsessed with owning real estate, and only because it’s what we’re told we ‘should’ do and it comes with a sense of success and self-worth. How exciting to read that this is not the case and, in fact, I may be better off than most!
I am a teacher at the beginning of my career, living in Vancouver, with huge amounts of student loan debt and a very small amount of RRSPs and TFSAs. Thanks so much for getting me excited about my future for the first time in a long time, rather than seeing it as daunting.
Well, Sarah, it is exciting. A new career, shiny young life and decades of time laid out before you. A blank canvas. And a myriad of decisions. A chance to stare hard at the choices others have made, and see if any are right for you. Won’t be easy.
What worked for your parents will probably fail for you. It’s just that kind of world. Blame it on me. At least, people like me – the boomers who played a pivotal role in consuming more than we produced, borrowing more than we could handle and wanting more than we should have. Our bloated expectations helped create inflation. We took personal debts and government deficits and elevated them to art forms. We expected infinite growth and rising wealth. We forgot self-sufficiency, trading independence for more stuff. We turned homes into assets. And our arrogant profligacy made us think rising prices and swelling debt swapped out. Progress may be good. We just sucked at it.
The legacy, Sarah, is young people like you graduate with fat loans, compete brutally for jobs and are told adulthood means buying a house rendered unaffordable by the greed of your parents’ generation. Ironically, most of the wrinkly people are desperate to sell, having learned you can’t live on drywall and granite.
But that’s not what they tell you, or admit. Instead, mothers and fathers of a certain age insist you must follow their path of borrowing and buying. Don’t throw your money away on rent! Buy now or never! Build equity for the future!
For many boomers, however, the future’s now. Without a buyer, they have no equity. Without a sale, no wealth. Just overhead. And despite their own generational failure, they exhort you to follow in their footsteps.
To do so, Sarah, would be a mistake. This puppy’s done.
Real estate was the plaything of your parents. A weird, immobile, illiquid surrogate for success. More for show than for living. The metamorphosis of a dwelling into a financial strategy is a perversion which will take years to undo. In places like Vancouver, especially, you can see all around you how this bricks-and-mortar narcotic has twisted values, caused mass myopia and replaced respect with envy.
This won’t last. And it won’t end neatly. And you should stay far away.
Run, Sarah, run.