Thanks to the economic downturn of 2008-2009, many grown adults are now living at home with mom and dad. According to a poll by Twentysomething Inc, some 85% of college graduates boomerang back to their parents home. Another poll highlights that the number is close to 50%.
Both polls must be screwed up because if that’s really the case, the US economy is in for a multi-generational long decline as graduates delay launching their careers, relationships, and families due to the inability to find full-time work.
Wait a minute, if you track the sovereign bond yield of Japan and the United States, you’ll see that we’re on the exact same course! See the chart below.
I’ve kept in touch with three Japanese friends who live in Tokyo, and one friend who lives in Osaka, and all but one of them lived at home with their parents until they got married in their early 30s. The other friend got married and invited his wife to live at home with his parents!
I don’t know about you, but for the first several years of marriage, I’d like to have absolute freedom spending time with my spouse, doing as I see fit. Sydney wrote a very insightful post called, “Multigenerational Households: Treasure or Torture?” that goes through the pros and cons of living at home with the parents. For newly weds, I would say the cons outnumber the benefits 3 to 1!
MEN HAVE IT BAD
There is no man I know who will admit to living at home with their parents after the age of 30. If they do live at home with the ‘rents, then obviously it’s just a temporary gig until they find a new job, or a new place to live. As men, we are expected to be somebody by the age of 30, or at least be on the path to accomplishment. After all, society expects us to care for the entire family, no matter how much progress there is between the sexes.
I personally would love to kick back and have my wife take care of me, if only for several years. Working non-stop for over 10 years starts to wear on the mind.
WOMEN HAVE IT BAD TOO
Even though men have it bad, I don’t know if women have it much better. In 2012, women are supposed to now be equal breadwinners with successful careers, while being super moms to their kids at home. This is an impossible feat! There are only 24 hours in a day, and something must give.
One of my colleagues got into work at 5am and left at 6pm everyday AFTER she had her first child. When she gave birth to her second child, we thought she’d surely take it easier. Nope. She continued to work from 5am to 6pm despite having two little ones at home who wanted to play. Her husband was the stay at home parent who took care of everything. When my coworker had her third child, no doubt she would start to slow down. After all, who can bear being away from their kids for that long? Instead, she got a promotion and moved her family across the country where she could work even more. Poor kids. At least they’re rich!
There is much less stigma against adult women who live at home with the parents. Instead, there is empathy because she likely has not found a soul mate to spend the rest of her life with yet. If things go too far, pity then results as people start nitpicking a woman’s flaws for why she can’t attract a credible mate.
Contrast the attitude of adult men who live at home, and it is a completely different story. People will think that the man is absolutely lazy, crazy, stupid, or a combination of all three! Remember, it is still up to the man to make the first move, and not the women. Clearly something must be wrong with the guy if he’s 33 and lives in mom’s basement. What if the guy just really loves his parents and wants to save money for a bit?
LET’S BE HONEST
If my parents had a mega-mansion right here in San Francisco, I would happily live on one floor to save money on rent. Yes, I’d probably take advantage of the chauffer to pick me up from tennis practice, and use the butler to deliver me grilled cheese sandwiches with tomatoes, but other than that, I’d be a completely independent man!
It costs $1,500 a month now to get a half-way decent studio in San Francisco. If you wanted to buy that same studio for $500,000, you might get a 4% mortgage from your bank, that is if you can find a way to put $100,000 down! At the very least, you should be able to reduce the chances of late payments hurting your credit score. I don’t know, the odds seem stacked against young adults nowadays.
By living at home with the parents, you not only are able to save at least 50% of your after tax income every month, you also get to help out around the house and get to know your parents as adults, and no longer children. My relationship with my parents under 25 is totally different from my relationship with them in my mid-30s. It’s much better!
Furthermore, for those who want to eventual lead untemplate lifestyles and work from all over the world, the time spent now with your parents shall very well make up for all that time abroad.
To the 85% of college graduates who return home to live with mom and dad, have no shame. You are now in the majority according to one study, which means you have power. You aren’t that rare albino tiger who everybody whispers about anymore. You’ve become as common as a pigeon in St. Mark’s Square.
Fight on, and don’t forget to at least pay for the cable and utility bills!
Recommended Actions For Increasing Your Wealth
* Manage Your Finances In One Place: Get a handle on your finances by signing up with Personal Capital. They are a free online platform which aggregates all your financial accounts in one place so you can see where you can optimize. Before Personal Capital, I had to log into eight different systems to track 25+ difference accounts (brokerage, multiple banks, 401K, etc) to manage my finances. Now, I can just log into Personal Capital to see how my stock accounts are doing and when my CDs are expiring. I can also see how much I’m spending every month. If you are interested, they can even provide tailored financial advice for much cheaper than traditional wealth managers.
* Check Your Credit Score: Everybody needs to check their credit score once every six months given the risk of identity theft and the fact that 30% of credit scores have errors. For over a year, I thought I had a 790ish credit score and was fine, until my mortgage refinance bank on day 80 of my refinance told me they could not go through due to a $8 late payment by my tenants from two years ago! My credit score was hit by 110 points to 680 and I could not get the lowest rate! I had to spend an extra 10 days fixing my score by contacting the utility company to write a “Clear Credit Letter” to get the bank to follow through. Check your credit score regularly and protect yourself. The averaged credit score for a rejected mortgage applicant is 729!
Photo: Puppy in China, SD.