Lick Me Green
Debt.
Love or hate it?
Seems like a silly fucking question at the personal level, isn't it? Why would anyone want to be in debt? Yet - the younger generations seem to love it, with under-30s in Finland in housing debt. Yes - you read that right - housing debt.
But they don't own houses.
Instead, they are getting into rent debt. And yeah, rent has increased, but not that much. What has increased heavily though is the young's expectation of what they need to buy in order to live. With the food delivery services doing a roaring trade, as well as online shopping aimed at the young, with BNPL support. Even groceries are being bought on credit, and delivered. Scooting around on e-scooters instead of walking a few hundred meters...
But it saves time!
What are you doing that is so important?
But why housing debt?
By the way... Schooling, including university education in Finland - is free. But what I think is happening is that while unemployment is high and they aren't able to get a large credit card debt, they are spending throughout the month and not allowing for the rent payments. And in Finland, there is some protection so that they can't be immediately evicted when too far in arrears, so they are pretty "safe" for a period of time.
But what kind of life is this to lead?
And is there coming back from it in later life?
I am not sure. But our future is influenced by our present actions, and our habits are strengthened every time we repeat an action. The younger generation really seems to be buying into the "own nothing" but I think they are soon going to discover that the "and be happy" is a load of horse shit they have been happily gobbling up, because it meant they could instant gratify.
Until they can no longer.
Because eventually, the multiple lines of credit run out, and all those consumer desires will go unfulfilled. And, like the crash after a sugar high, they will sink emotionally like a lead balloon. But while they have put themselves into this position by following the group behaviours - they will never blame themselves for it.
Even as they mull it over while sipping on an 8 dollar cup of coffee.
I was reading an article the other day where a survey found a large percentage of young people used their dishwasher and washing machine as storage space, because they would mostly order takeout, and would wash their clothes at home.
Ah... the entitlement.
I think at some point in our lives, regardless of the conditions or what happened to us, we have to realise that it is us who have to live the life. Our experience is our own, and even if external conditions or people are to blame, the responsibility of our own behaviour is squarely on our own shoulders. Even for those who are emotionally immature, socially awkward, or filled with anxiety.
No one is going to save us. We have to work our shit out.
What I can personally attest to is, debt sucks. And while I can't speak for everyone all over the world, most of these young people in Finland have had exceptionally good conditions in which they have been raised, schooled, and provided an ecosystem of opportunity. Yet, many are failing, even though they have been afforded support luxuries that many in the world would dream of. This indicates that there is a very strong global social culture that is driving the behaviours for debt accumulation.
If you want to be fit - do what fit people do.
If you want to be rich - do what rich people do.
If you want to be in debt....
Taraz
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Wow, I can't imagine my dishwasher just being used for storage. That is crazy. I remember all those years that I was paying rent and it really drives me crazy that I wasn't investing in something.
They probably use the Starbucks bathroom so they don't have to clean their own.
I rented for the first 5 years in Finland and at one point, thought I wouldn't be able to ever buy.
I can agree with that last part. I know the reason I rented, but it still feels like it was a big mistake at this point. Especially after I moved in with my wife and realized her mortgage payment was about the same or less than my rent in the next city over.
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Most 30 year mortgages on a home will cost you 2-3x the asking price. This means, that if you were to find someone who would put up with you so long as you paid every month towards your future home, you could buy your home, with capital, in 10-20 years and keep 10-20 years worth of payments for other things. Debt, unless you do as the rich do and use small one month loans to ease your taxes, is self enslavement and loss.
Investing a large part of your life in something like this is a loss that surpasses any effort to normalize these things.
These people are on housing debt - for rentals, not ownership. In many cases in Finland, mortgages are going to be cheaper per month than renting - but of course there is the maintenance etc that goes with it. However, housing isn't really the issue with the debt, because they are spending on "other things" and it isn't on investments.
Can't really blame them too. The pressure for ownership and delayed gratification is as unappealing as it sounds. Many are rather resigned to the fact that they 'take nothing out' from this World...whether such perspectives are okay to harbour doesn't quite change them
But what happens when they are forty, or fifty - or worse, retired? They are still physically abled, but their finances are so poor they have nothing to live off, nothing to do. What kind of life is it?
It is very sad to think that our life should be conditioned by something that in itself makes us lose the true essence of living. It is terrible to see debts as something normal, and that instead of counteracting and uprooting them, you should rather think about how to manage them. It would be a mistake to assume that the road to happiness is paved with small debts, and I believe that each one of them is like a brick that you are removing from what you really want to build.
This is a good way to look at it :)
There is only one kind of good debt: Mortgage at under 4%, like 2.75% 30 year fixed loan that is great debt. Because you can basically put down 20% and leverage the rest from the bank. So you are putting down 200k on a 1,000,000 home so you are basically hoping for long term appreciation of 4-6% on the 800K that is not yours, while living in the house. That is good debt, the rest I don't think is worth considering.
I came here to say something about leverage, but you said it better than I could!
Thanks 😊
So you are saying.... getting into debt by ordering too much Kung Pao Chicken is bad?
Absolutely, relying on debt daily for housing, shopping, or even food can become a trap that's hard to escape.
Do you think education systems or governments should play a bigger role in raising financial awareness and curbing the culture of overconsumption?
I think they are part of the problem currently. The entire economic system is designed to extract as much from people as possible, not to help them thrive.
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It is very difficult to give an opinion about what you are raising, since the realities of our places of residence (countries) are vastly different. In my case, it is Venezuela.
However, I believe that there may be some common features. I share with you that it is essential that everyone can see (think) themselves and assume their life with conscience. This is fundamental. Best regards, @tarazkp.
What I have seen from the younger generation is to live now and spend now, no care about the future.
Beforetime, if you wanted to buy something but got not enough money, you had to save money to buy it. Today it is not like that, we are able to buy whatever we want through some debt instruments such as credit card. This situation has lead us to a complete consumerist society.
If you can't pay for it in cash, you can't afford it.
Several banks will make money on millions of these young people. But what will happen next to these people in debt? Will they find a good job and will they realize that consuming on credit is a bad thing? Maybe with age, most of these people will become smarter.
Maybe. But at what age? This kills the possibilities of compounding investment value, doesn't it? How long will they wait?
While we can't think of governments being organised enough to be malicious about things, but I do sometimes (and very genuinely) wonder, if there's some maniacally malicious actuary sitting behind various government departments trying to squeeze every industry to maximise tax revenue and make it so people can only live by the skin of their financial teeth.
I think there are many, many of them. But they aren't necessarily colluding on it. There is alignment through the economy to maximise profit. For governments, that profit is tax revenue.
This really hits hard. Debt is bad, no matter what, especially when it’s just for consumption. But there are some good debts, like when it's used to invest in something meaningful, especially in an existing business that’s already bringing in returns.
I also think many young people today are too relaxed because of the comfort they’ve been given. That’s not bad in itself, but it becomes a problem when they stop striving. Where I come from, we don’t get that kind of support . Students struggle to pay school fees, and getting a loan or credit card feels almost impossible. So we learn early that comfort is earned, not given.
I know there are way for our people to get loan to be comfortable they will do it too. No one wants stress in life but we do need a bit of stress to thrive in life.
Investing into a decent business is fine. Even if it isn't brining returns. Spending on consumption is always a loss though.
It is definitely a different situation for many here, but not all. Most have been raised to feel they are entitled to getting what they want, when they want it.
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I like debt. It makes it possible for me to own fewer than zero Aussie dollars.