Is homeownership out of reach for Gen Z? Discover the drastic shifts in housing affordability, generational wealth disparities, and how evolving ideologies around education and debt shape today's financial struggles, with a focus on systemic issues and the racial wealth gap.
Remember, your Perch isn’t just a place to sit; it’s a place to seek a higher perspective.
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Episode Transcript
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Speaker 1 (00:06):
Welcome back Purchasoids.
Speaker 2 (00:08):
It's a great day Purchasoids.
Speaker 1 (00:10):
Purchasoids yes.
Speaker 2 (00:11):
All right.
Speaker 1 (00:11):
It's a great day in northern Michigan.
Good to have you all with usagain.
As you may recall from our lastconversation, we were really
talking about the challengesfacing the next generation, and
did we leave them in the soup?
Did we make a mess?
And the answer is partially yes.
The answer is is partially no.
But how are you doing today?
Tree?
Speaker 2 (00:30):
I'm well, toby, how are you?
Speaker 1 (00:31):
I am fantastic.
We're rocking the detroittigers jersey today.
Uh, as we know, the detroittigers are perennial seller
dwellers, but we love themanyway up here in.
God bless them, little puddingsanyway.
So, uh, what we're going totalk about today is one of the
major topics we want to talkabout is is wealth actually
(00:54):
decreasing as we're getting intoother generations and we were
just talking about this beforewe even started filming and it's
really not true that wealth isactually decreasing.
What we're finding is in insome cases it's career choices,
and in some cases it's just thatthe gap Now don't say we,
that's what you found.
Speaker 2 (01:14):
All right, you don't know.
If that's what I found, that'strue, that's your opinion.
Speaker 1 (01:17):
What we're finding, though, is that the cost of
living in general is going upfaster than people are making
money.
So the one I wanted to startwith if you're good with it was
housing.
Can we start there?
Okay, absolutely.
So let's talk about this alittle bit.
We hear about it and Tree saidthis on the last podcast.
Both she and I have childrenwho are millennials.
(01:40):
Right, is that what we said?
Speaker 2 (01:41):
No no.
Speaker 1 (01:42):
Gen X, z, gen Z.
Okay See, I don't even keepthese.
Speaker 2 (01:47):
Gen.
Speaker 1 (01:47):
X is me.
Ah, okay, so Gen Z.
So one of my, my son, is in the, is in the workforce, my
daughter just getting there, andboth of them look at it and say
, dad, you know, housing is justridiculously expensive, you
know can't afford to buy a house.
And you look at it and say,well, wait a minute, how could,
how could we have done it?
(02:07):
Because I look at salaries andI say, you know, my son makes
more at his age than he did whenI was his age.
So what's happened?
So let me give you a couplequick numbers and then we'll
we'll jump into the conversationso I'm sure our numbers aren't
the same in 19 in the medianhousehold income 1984.
So I got out of college in 85.
So 84, the median householdincome.
(02:29):
You want to guess?
Speaker 2 (02:31):
$25,000.
Speaker 1 (02:32):
$22,420.
If the price is right, youwould have been over.
You would have lost, so sorry.
Speaker 2 (02:38):
But it's not.
Speaker 1 (02:39):
It's not so, you're okay, all right.
$22,400.
An average house what?
Okay, all right $22,400.
Speaker 2 (02:46):
An average house.
What did an average house in1984?
Speaker 1 (02:48):
cost.
What did we just do?
What did I just give you?
Speaker 2 (02:49):
You just gave me a household income.
Oh, household income, that'swhat you gave me $22,420 was
household income.
What was the house?
Speaker 1 (02:55):
$35,000.
Oh gosh, I wish $78,200.
What's the median price for ahouse?
Oh, what year?
1984.
Oh, okay, so if you take 22,420, and 78, 200, the ratio is
about three and a half to one.
Okay, three and a halfhousehold income to house cost.
Okay, three and a half to one.
Let's go to 2022.
(03:16):
All right, 2022, medianhousehold income.
Want to guess?
You can't cheat, you're goingto cheat.
Speaker 2 (03:22):
I can't cheat I can't cheat, you can't cheat.
Speaker 1 (03:24):
That's right $250,000 .
Oh, you wish.
What did you just say you livein, maybe in pesos $350,000.
Speaker 2 (03:32):
What Median household income?
Oh income.
I thought you said house.
I can't hear.
Okay, let's start over.
Speaker 1 (03:38):
Please send your.
Okay, I'm ready.
Please send your money.
Operators are standing byMedian household income.
Median household income $75,000.
Very close once you actuallypay attention to my question.
$74,600.
I said $75,000.
I know that's why I said you'redangerously close.
Oh my God, Down from whatever$1.2 million that you had a
minute ago.
Speaker 2 (03:57):
Whatever?
Speaker 1 (03:58):
Okay, and now let's.
Let's talk about the averagehouse cost.
Speaker 2 (04:03):
Which is what I thought you said the first time.
You know I have a radar where Itune you out.
It's kind of hard to tune injust for a podcast, but I'm
tuning in Tokyo, I'm here.
Speaker 1 (04:13):
So median household $250,000.
$433,000.
And therein lies the rub In2022.
Speaker 2 (04:26):
2022, the average house cost.
Speaker 1 (04:28):
We made a huge jump because it was just 250,000.
The average household costmedian house cost 2022, $433,000
.
Speaker 2 (04:34):
Okay, where are we going?
Speaker 1 (04:35):
So now, the gap is 5.8 to one.
Okay, so while income went upvery steadily, housing costs
went up exponentially.
And you got to ask yourself why.
Why did this happen?
Well, two things.
One of them is you may rememberthe loose lending practices in
the year 2000s where we weregiving, basically, mortgages to
(04:57):
anybody who had a pulse and thenyou had to bail out the banks.
We had all kinds of challengesaround that.
And then you had to bail outthe banks.
We had all kinds of challengesaround that.
Was it too big to fail?
You know all of that.
And then after that we hadsuper low interest rates.
Super low interest rates.
Then we didn't have enoughinventory in the market, drove
pricing up like crazy.
So now the affordability indexis a mess To you.
Speaker 2 (05:20):
So I'm going in a different direction.
Shocking, I knew that was nextand this is what I have to say
about housing.
So because we left, the firstone was about different
generations and where they fare.
And we said we're going to talkabout it from through the lens
of housing.
Well, 73 million baby boomersin the US.
(05:42):
They retire in 2030, yet 45percent listen to this of baby
boomers have no retirement orsavings.
They're becoming homeless at arate not seen since the Great
Depression.
So think about that when we getto the finger pointing, until
we start in the last one, whenwe said, well, this is the
(06:04):
biggest transfer of wealth.
And, yes, that's true, yes,they are retiring, yes, that's
that's going to pull on SSI.
But you have to realize too, notonly so here's a generation
that, when we look at it fromyou know, pointing a finger says
the biggest transfer, a wealthbecause they had it.
(06:26):
But here's a generation that'sgoing to work longer, that
cannot retire.
When they retire, 45 percent ofthem doesn't don't have any
savings or retirement.
But I have some more numbersthat that, like literally took
my breath away too.
So so I'm going to break thisdown also Before I get into this
(06:47):
.
I also want to say there is adisparity, and I thought I had
the notes for this and I may whydon't you look for that for a
second?
Speaker 1 (07:00):
Because I want to pile on that.
I was just reading somethingthe other day.
I'm just turned 60 this yearand so you start to look at
things like how much money do Ineed to pile on that?
I was just reading somethingthe other day.
I just turned 60 this year andso you start to look at things
like how much money do I need toretire?
And I heard an economist I thinkit could have been Susie Orman
or somebody on one of themorning shows and they said that
for you to retire comfortablyat age 65, you should have about
(07:20):
between $1.4 and $1.5 million,and that's up markedly in the
last 10 years.
And again why we talked aboutsome of the inflation challenges
and pricing demands.
But the other thing they saidis that what's the average
65-year-old got in savings andit was like $87,000.
(07:42):
So that's a big gap from$87,000 to $1.4 million.
So that speaks directly to yourpoint, which is, while
millennials or Gen Zs or Gen Xsor whomever can point the finger
, we're going to have some realchallenges here coming up pretty
soon as the baby boomers startto retire and start to realize
(08:04):
that they don't have enoughmoney to retire and our life
expectancies have just continuedto increase.
Speaker 2 (08:11):
Well, another thing.
It's two issues and I don'twant it to sound like all doom
and gloom, but I think youcannot change what you don't
acknowledge.
So some of this is justinformational and these numbers
don't sound good, but in 2022,this part sounds good In theory.
In 2022, nearly 40 percent ofUS homeowners own their homes
(08:36):
outright.
According to the Census Bureaudata in Bloomington, in total,
thirty three point three millionsingle family homes and condos
were mortgage-free.
That's a 31% increase comparedto 25.4 million a decade ago.
(08:57):
So that sounds great.
That sounds hopeful.
This is where I got a knot in mystomach.
There's such a huge disparitythat now let's talk about
because we talked about thegenerations but the racial
disparity 41 millionAfrican-Americans in the US is
(09:18):
12 percent.
That's in 2021, which is 331million 331 million On average.
The numbers and this isaccording to NAR, and NAR is the
National Association ofRealtors Majority of those
homeowners are of the 33% and Ihad the actual number somewhere
(09:43):
right here are white.
The numbers cannot be stated ofafrican americans who own their
homes.
There is literally no datastating of their percentage of
homeowners in america.
What percentage of that is thatare african americans?
Speaker 1 (10:04):
well, we've talked about this.
Speaker 2 (10:05):
That makes me wanna cry, because what that says is
go back to how did this go?
What does this have to do withgeneration and different
generations?
Well, historically in America,the reason why people have an
issue with boomers is because ofthe money and historically in
(10:26):
America, the biggest transfer ofwealth, the way to earn wealth,
is between education and homeownership.
So if it's barely and I'll getto the numbers soon, I don't
want to make this a race thing,because that's another podcast
for a different day because it'ssuch a disparity in the rate of
home ownership forAfrican-Americans but if we
(10:48):
barely own our homes in a lowpercentage, and when we do, we
never own them outright.
So how do you ever close this?
You got a racial wealth gap inthe generations and racially, so
, the numbers are so skewed, youknow, and it makes me sad to
know that numbers are so skewed,you know, and it makes me sad
(11:09):
to know that, like, how can youmake this up when there's no,
there's no avenue to close thesegaps?
Speaker 1 (11:12):
Well, not only that, but and we've talked about this
on previous podcasts but thinkof it like a race, right?
And if I start a mile ahead ofyou and we are both running at
the same speed An hour later,guess what?
I'm still a mile ahead of you,and that's unfortunately the
world that we find ourselves in,or a lot of the numbers I see
(11:35):
is that minorities are making upa minute of that hour, but
that's just so slow.
So some of the economists willsay, oh, the black community
income is increasing at 3%,whereas the white income is
increasing at 4%.
But remember, that's apercentage of where they started
.
So in reality, in real terms,minorities are actually falling
(11:59):
further behind, because if Ihave a million dollars at 4%
versus $25,000 at 5%, I'm stilllosing ground, and that's what's
happening.
So it's kind of a shell gamewhat they're trying to describe.
And generational wealth is thebiggest challenge.
You nailed it.
Speaker 2 (12:14):
And since I brought that up, I thought it's fair
that I give the actual numbers.
While in a US home ownershiprate increased 65% in 2021, the
rate of African-American lagsignificantly at 44%, has only
increased 0.4 percent in 10years.
It is nearly 29 percent pointsless than white Americans at 72,
(12:36):
representing the largest blackwhite home ownership rate gap in
decades.
And then it goes on to say butthis is what I want to say Black
homeowners and renters are mostcost burdened than any other
racial group.
Less than 10 percent of blackrenters can afford to to buy
(12:58):
their typical homes.
And the reason why I felt likebringing that up is because when
we just gave the numberspreviously about the historic
high of home ownerships, peoplethat have mortgage free, the
reason that the article and youcan look this up and I'll put
the link on it from NAR, theNational Association of Realtors
(13:18):
they said the reason why thatjumped significantly.
Think about it.
So when we were going throughthe pandemic, we were going
through what we went throughwhen we looked up and we saw
that interest rates had fell inthe twos.
So all of these seniors thatwere close to the end of their
mortgage, you know they gottheir low interest paid it off,
(13:41):
you know, quick.
So therefore, that's why homeownership actually owning a home
outright, with no mortgage madethis jump Well, which is great
and that's fantastic.
But they could do that becausethey had it and they were the
number that actually had thesavings, where most of the
numbers are staggering with thepercentage that we gave, that
(14:03):
didn't have, like you said,75,000 or less, even in savings,
and then some don't have asavings at all.
So, of course, when there'stimes when the market hits, you
have to have money to make money.
We say that all the time, youknow you have to have money to
take advantage of those things.
Speaker 1 (14:23):
So there was an interesting article when it was
this published 2021, in BusinessInsider, called Millennials are
the highest earning generationbut hold way less wealth, which
would seem like a contradictionin terms.
I want to read to you a littlebit.
And the section that they callis called an affordability
crisis and it says the cost ofliving increases have outpaced
(14:46):
wage increases.
Some services and goods havebecome way more expensive than
others over the last 21 years,with costs for things like see
if millennials and Gen Z thinkof these as important college
tuition, health care and childcare far exceeding our hourly
wage hikes.
The most recent pay scale indexfound that wages have increased
by 19% in the United Statessince 2006.
(15:09):
But when you factor ininflation, real wages have
declined by 8.8%.
That means that workers haveless purchasing power than they
used to.
It's especially a problem formillennials, who have faced one
economic woe after another.
Two recessions before the ageof 40 and a staggering student
debt load, coupled with soaringliving costs, have created an
(15:31):
affordability index for thegeneration that's, even with
six-figure earning, feelingbroke.
And we were talking about thisbefore we started filming and
Mark, who does our podcast, saidyou know, there's this
delusional thought now that oureducators are pushing that says,
oh, you have to go to college,oh, you have to go to college,
you have to go to college.
And we're forgetting the factthat there are good vocational
(15:52):
careers and there are othercareers that perhaps don't need
to go to college and we'reactually saddling our kids with
these massive student debts.
And then we complain when theysay I can't pay my student loans
or they can't afford a carpayment or these other things.
Clearly, purchasing power hasdropped almost 9% in the last 10
(16:15):
, 15 years.
Speaker 2 (16:16):
Well, I'm going to say something, and I know I'm
not saying this for argument'ssake, it's just food for thought
.
I know the millennials aren'tgoing to like it, I'm going to
like it.
But so all of those factors aretrue and all of that the
financial burden was laid on,was handed down to them Unfair,
unjust.
I don't even believe infairness.
It's a different conversation.
(16:37):
But generations before themillennials, we did have delayed
gratification.
We did Funny shit.
I want to get into that.
We had delayed gratification.
Speaker 1 (16:46):
We did Funny.
You say that I want to get intothat.
Speaker 2 (16:48):
We had delayed gratification.
We came up.
I promise you my car was thebiggest hooptie on the planet.
Like literally, I would justdrive down the road and my
lights would go.
It shouldn't have been on theroad.
They went.
What?
Okay, like seriously, I meancars would start honking because
I had an electrical issue and Icouldn't afford to get a fix.
Speaker 1 (17:09):
It shouldn't have been out there I had a car in
college.
You couldn't go reverse.
Yeah, didn't go in reverse.
Speaker 2 (17:13):
That's what I'm saying, and I literally had rust
spots and holes.
I couldn't go through car washbecause, you know, because it'll
get wet Nevertheless.
But each generation had astarter, everything.
That's how we in America.
You had a small house, we had800, 900 square foot home and we
stayed in there, not until wegot this, until our families
(17:36):
outgrew it, and then we went toa bigger home.
Speaker 1 (17:38):
I want to jump, I want to pile on that.
Why is it different?
Now Tell me why.
I'm not going to tell you why Ithink it is, but you tell me
why we put up with cars thatdidn't go in reverse or cars
that went Because we weren'tgiven anything, so we had to,
because there was no expectation.
But why did we put up with itand people today won't?
Why were we willing to put upwith it?
(17:58):
Who is we Tato, we, we, we, we,we.
Who Us Us?
Is us usses?
It clarified because we'retalking about our generation was
willing to drive cars it didn'tgo backwards or cars that went
you missed your line again youknow, whatever it was, okay, we
put up with that.
We lived in little homes, wedidn't.
But today they don't want to dothat.
And why don't they want to dothat?
(18:19):
Why don't they want to do that?
Speaker 2 (18:20):
you're missing your line, it's not the fact that,
first of all, you're not sayingit correctly.
It's not the fact that we putup with it.
That is not what it is.
That was the only option we had.
My mom used to call it duck orno dinner.
That means you eat this duck oryou don't eat shit.
Nothing, that was all we had.
So putting up with somethingmeaning you have an option.
(18:41):
When you put up with something,you put up with it because you
have a choice.
Speaker 1 (18:48):
I'm putting up with something.
You put up with it because youhave a choice.
I'm putting up with this, but Icould leave.
Speaker 2 (18:51):
I have a choice.
I couldn't roller skate to workbecause those were the only
other wheels, so why is itdifferent?
Speaker 1 (18:57):
today.
Why is it different today?
I'm going to give you one word.
Speaker 2 (19:01):
No, first of all, you're going to let me Okay,
talk, I'm done to credit.
So that's part.
No, well, this is what I haveto say to that.
And I understand that.
I think my generation was thefirst because right after the
Obama came in and and really gotafter may change the laws where
(19:26):
these creditors just couldn'tinundate college campuses.
I think that generation, whatgeneration is it?
Generation X was the firstgeneration that literally saw
you know these credit cardcompanies like so as you get to
college, here you go.
So as you get to college, hereyou go.
So it was there with generationX.
But our generation, we saw thestruggle.
(19:49):
Most of us worked at a veryyoung age.
Speaker 1 (19:52):
How old were you when you had your first credit card?
Speaker 2 (19:58):
That's a great question.
I wouldn't take it.
That's a whole otherconversation for another day.
I was in my 20s when I startedusing credit cards.
Speaker 1 (20:04):
What do you think today?
What's the average age thatsomebody gets a credit card?
I mean, you look at the averagedebt.
Speaker 2 (20:09):
I know my kids got them when I I mean well, got
banking cards, which was creditcards too, and access.
I think they were about 15.
Speaker 1 (20:18):
Right.
But it wasn't that it wasn't,they weren't balling out, it was
not a bet.
I would argue that our culturehas changed to the point where
we are okay with being in debt.
We're comfortable with being indebt, but Toby.
Speaker 2 (20:32):
I think that that's a disconnect, because I
understand what you're saying,but where I think the bigger
point.
My point was where's thedelayed gratification?
Because you're putting it oncredit cards.
Speaker 1 (20:43):
I'm putting it on credit, no Credit in general,
whether it's you can get intothis car today or you can buy
this house, because of thesesubprime mortgages.
Speaker 2 (20:52):
Ideology, though I understand that.
Speaker 1 (20:54):
But I'm talking about ideology.
Speaker 2 (20:55):
Where did it come?
Where we felt like you know,and I think our generation
started it.
I think our generation startedit.
I think our generation becausewe wanted them to have more and
said when you graduate, you geta car, when you graduate, you
get this.
And the generation before them,if they got a car, it was the
their parents car, that they oldclunker and they were happy for
(21:16):
like god, as long as it wasn'tthat station wagon with the
brown wood.
But even if you got that, it'sbetter than roller skates, I'm
telling you, than a bus pass.
But so then we took that awayand said, you know, we just,
they started us off if theycould not.
Everyone got even a parent'scar, I didn't, you know, but
(21:36):
they started us off with whatthey had, because their thing is
, you know, you earn your own.
I'm giving you something to getyou to point a, to point b.
And then we came along andbefore some of the kids got in
high school, my, my daughter wetalked about this with our kids
went to a school where a kid wasgiven a g-wagon a mercedes
g-wagon, like that's six figures, like what the in high school,
(21:59):
that's irresponsible judging butnot judging.
So we came with that thing wherewe wanted our children to show
they're my children, so if Ihave status they have to show
status.
That's on us, that's not them.
But I'm saying, even when itcame down to the starter homes,
you know, most everyone I knowstarted at 2,000 square feet or
(22:21):
bigger.
I don't know where anyone hasstarted and that's the theory.
Speaker 1 (22:26):
I'm not saying that expectation.
I guess what I'm trying to getat is that.
Speaker 2 (22:30):
But that's not a credit card.
Speaker 1 (22:31):
Well, but there's a number of things that have
changed socially as well asfinancially, as we've seen that
have created almost this perfectstorm of expectation where you
know our quality of life hasimproved, right, I mean, I guess
you could argue we all live in.
We saw last night we werewatching that the baseball game
and they said that you know,back in 1910, something like 15%
(22:52):
of houses had toilets.
I mean 1910, that wasn't thatlong ago and now our expectation
is you're going to live in ahouse with air conditioning and
you're going to live in a house,perhaps a garage, so many
square feet.
So our expectations havechanged.
I was about to get off topicShocking.
Our quality of life hasimproved, but it's also the cost
of life has increased as well,and so one of the things I
(23:13):
wanted to talk about is what doyou think, as a country, we can
do to try?
What are some of the key things?
If you were running for office,what were the two or three
things you'd do to try tocontrol the affordability crisis
?
How do we make housing moreaffordable?
Let's start there.
How would we make housing moreaffordable?
Speaker 2 (23:34):
I would, so this is my presidential speech.
Speaker 1 (23:37):
There you go.
Speaker 2 (23:37):
America come in.
First of all, we need to revampand yes, this is personal and
I'm fine now but we really needto revamp our credit system,
this FICO system, the way we docredit.
It is unfair, it is unjust andimbalanced, and I'm going to
(24:01):
give you a part.
Why do you say that, tresha?
I'll tell you because what it's, a system that says a lot of
our structure and system inAmerica is set up to award the
reward the rich, and so FICO isanother way.
So they say if you're absolutelyperfect, if you you know you
have X amount in a bank and youdo all this, never miss a
(24:24):
payment, we're going to make iteasy for you to get credit.
So you're going to make iteasier for the people who need
credit the less, to get morecredit.
So for poor people who actuallycan't make it from day to day,
who needs grace, grace is credit.
Credit buys you time.
For the people that need grace,you make it harder, you charge
(24:46):
them more.
So I pray America's listen.
This system is broke and it'sflawed, and it goes back to the
last podcast we talked aboutScott Galloway, but it goes back
to his point of, like you know,so you put money into Social
Security and you pay all of thisin.
If you have five, six, 10, 15,20 million dollars, why are you
taking down Social Security?
(25:07):
You don't need it, so we needto create a system.
Speaker 1 (25:11):
You're not answering my question, I'm going to bring
you back.
I want actionable things In thelast 20,.
In the last 28 years, houseshave gone from seventy eight
thousand dollars, no, no.
Stay with me.
In the last 28 years, houseshave gone from $78,000.
No, no, stay with me.
In the last 28 years, houseshave gone from $78,000 to
$433,000.
How do we make them moreaffordable?
I want actionable steps and Iunderstand credit.
(25:34):
Credit works for me.
Speaker 2 (25:35):
Because, first of all , they've got to be able to buy
the house.
Speaker 1 (25:38):
How do we make housing cheaper?
Speaker 2 (25:40):
How do we make housing cheaper?
What will make housing cheaper?
How do we make housing cheaper?
We start.
What will make housing cheaperif we have more and Bishop TD
Jakes is working on this too,where he's got a billion dollar
funding with Wells Fargo to domore mixed income communities.
What created this disparity iswhen we start saying I'm over
(26:03):
here, you over there, this zipcode is versus, you're next to
me, and because we drew thisline.
So once we start having moremixed income communities, these
and these properties will notappreciate at the level that
they're going.
We will have more balance andwe'll have more affordability.
But the minute where you saybecause I'm over here and I'm in
(26:26):
this zip code, so that's wherewe can start, we can start
saying how do we bring moreunity, more diversity, more
diverse incomes into communities?
That's going to start.
We need to get rid of redlining.
I'll be here all day.
Speaker 1 (26:41):
It's a thousand things I can do.
I just want to blood hammerthem, because these are some
interesting points there shouldnot be Redlining should be
unconstitutional.
Speaker 2 (26:48):
It should be against the law.
You should not be able to drawa line in America and say,
because you are of this race orthis socioeconomic background,
this line is drawn because Ineed to protect their property
from yours.
Until we start and this is notme just saying take from the
(27:09):
rich and give to the poor.
That's not what I'm saying.
Speaker 1 (27:15):
That's saying, let's erase all of these lines that
separate us.
To begin with, how do we getbuilders to start building
low-cost housing as opposed tobuilding high-cost housing?
How do we incent lower costhousing?
Because that's the challenge.
I mean, I was in Toronto acouple of weeks ago and
everybody's building high costhousing.
How do we, how do we incentbuilders to build low cost
housing to fix this, to lowerthis gap?
Speaker 2 (27:34):
But it goes back to saying there is a way.
So they bought this up when it.
When it came down to I hate tobring his name up again Scott
Galloway, but when they weretalking about the tax and
revamping our tax code and ourtax system, here's a thought.
It's not like we'retransferring wealth, but more
(27:54):
people factually and I have thisin my notes.
I want to say this quickly.
They brought this up in apodcast and they said that Simon
Sinek bought this up and saidhe was like.
I did a quick study.
He was like Rockefeller,carnegie and a lot of the rich
people who were rich during theVictorian era.
There was no tax code.
(28:16):
They didn't give incentives forthem to give back.
But everyone knows that,carnegie, you may have whatever
issues you want to have withthem, but there was philanthropy
when there was no tax incentive.
So I'm going somewhere.
So these people were givenbeing the Brits and Americans
back in the Victorian days.
And we know, carnegie, we stillhave Carnegie Hall and other
(28:37):
places.
Speaker 1 (28:37):
Carnegie Deli yeah.
Speaker 2 (28:38):
No, I should tell you .
So they gave even when there isno tax incentives, he goes.
Why did they give?
Because back then they feltthat there was a moral
obligation to say OK, now we'renot, you're going to pay a
little more, but you get to saywhere your money goes.
I think that would change allof this.
(29:13):
I think people that make morewill be more amped to give when
you say OK, you know what, I canhave this as the Malbec
Institute of whatever the casemay be.
You know what I can have thisas the Malbec Institute of,
whatever the case may be.
Then we start changing the taxcode, changing those things and
giving people who pay moredifferent initiatives to put
their money to, and then we canstart making changes, because
now we can have home endowmentsand say you know what I want my
(29:37):
money to go to?
A lot of the deals with youknow the plight of the homeless
and all of these things, andthat's, yeah, the Malbec
Institute of Tomfoolery is whatwe're going to do.
Speaker 1 (29:48):
We tried to boil the ocean in the last two episodes
two podcasts.
Speaker 2 (29:52):
We did a lot.
Speaker 1 (29:52):
We want to hear from you, give us some ideas of
topics you'd like us to coveralong this line, because there's
a lot to cover as we try toreally fix up some, some screwed
up stuff, and some of it's ourfault, some of it's not, some of
it's, you know, technologyrunning amok, some, some of it's
just us not keeping up withwhat's going on.
But, um, we, we appreciate youtaking the time with us today,
(30:13):
um, and we appreciate thefeedback you guys always give us
.
And, uh, until we see you again.
Speaker 2 (30:18):
I do want to say until we see.
I do want to say we doencourage you guys to subscribe,
to join us, because, ideally,we're not just doing this to get
numbers up.
That's great.
I really want to get to thepoint where we have a big enough
following and support so we canhave live conversations.
(30:41):
I want to have liveconversations because I want
feedback.
We really want to do what wecan to be some kind of
instrument of change and giveeveryone a voice.
So that's important.
So subscribe.
I don't even like saying likeus because I'm like like me,
please, like me, but please andfor those of you older people
who don't know how to subscribe,because I had that happen too
(31:02):
Like I keep pushing a button notthe button you see on the
screen and in YouTube, it's abutton beneath that says
subscribe and it'll give you alittle bell.
But yeah, we really want to golive.
We really want your feedback,your participation.
So until we meet again, we'llsee you on the perch, take care.
Welcome back Purchasoids.
Speaker 2 (00:08):
It's a great day Purchasoids.
Speaker 1 (00:10):
Purchasoids yes.
Speaker 2 (00:11):
All right.
Speaker 1 (00:11):
It's a great day in northern Michigan.
Good to have you all with usagain.
As you may recall from our lastconversation, we were really
talking about the challengesfacing the next generation, and
did we leave them in the soup?
Did we make a mess?
And the answer is partially yes.
The answer is is partially no.
But how are you doing today?
Tree?
Speaker 2 (00:30):
I'm well, toby, how are you?
Speaker 1 (00:31):
I am fantastic.
We're rocking the detroittigers jersey today.
Uh, as we know, the detroittigers are perennial seller
dwellers, but we love themanyway up here in.
God bless them, little puddingsanyway.
So, uh, what we're going totalk about today is one of the
major topics we want to talkabout is is wealth actually
(00:54):
decreasing as we're getting intoother generations and we were
just talking about this beforewe even started filming and it's
really not true that wealth isactually decreasing.
What we're finding is in insome cases it's career choices,
and in some cases it's just thatthe gap Now don't say we,
that's what you found.
Speaker 2 (01:14):
All right, you don't know.
If that's what I found, that'strue, that's your opinion.
Speaker 1 (01:17):
What we're finding, though, is that the cost of
living in general is going upfaster than people are making
money.
So the one I wanted to startwith if you're good with it was
housing.
Can we start there?
Okay, absolutely.
So let's talk about this alittle bit.
We hear about it and Tree saidthis on the last podcast.
Both she and I have childrenwho are millennials.
(01:40):
Right, is that what we said?
Speaker 2 (01:41):
No no.
Speaker 1 (01:42):
Gen X, z, gen Z.
Okay See, I don't even keepthese.
Speaker 2 (01:47):
Gen.
Speaker 1 (01:47):
X is me.
Ah, okay, so Gen Z.
So one of my, my son, is in the, is in the workforce, my
daughter just getting there, andboth of them look at it and say
, dad, you know, housing is justridiculously expensive, you
know can't afford to buy a house.
And you look at it and say,well, wait a minute, how could,
how could we have done it?
(02:07):
Because I look at salaries andI say, you know, my son makes
more at his age than he did whenI was his age.
So what's happened?
So let me give you a couplequick numbers and then we'll
we'll jump into the conversationso I'm sure our numbers aren't
the same in 19 in the medianhousehold income 1984.
So I got out of college in 85.
So 84, the median householdincome.
(02:29):
You want to guess?
Speaker 2 (02:31):
$25,000.
Speaker 1 (02:32):
$22,420.
If the price is right, youwould have been over.
You would have lost, so sorry.
Speaker 2 (02:38):
But it's not.
Speaker 1 (02:39):
It's not so, you're okay, all right.
$22,400.
An average house what?
Okay, all right $22,400.
Speaker 2 (02:46):
An average house.
What did an average house in1984?
Speaker 1 (02:48):
cost.
What did we just do?
What did I just give you?
Speaker 2 (02:49):
You just gave me a household income.
Oh, household income, that'swhat you gave me $22,420 was
household income.
What was the house?
Speaker 1 (02:55):
$35,000.
Oh gosh, I wish $78,200.
What's the median price for ahouse?
Oh, what year?
1984.
Oh, okay, so if you take 22,420, and 78, 200, the ratio is
about three and a half to one.
Okay, three and a halfhousehold income to house cost.
Okay, three and a half to one.
Let's go to 2022.
(03:16):
All right, 2022, medianhousehold income.
Want to guess?
You can't cheat, you're goingto cheat.
Speaker 2 (03:22):
I can't cheat I can't cheat, you can't cheat.
Speaker 1 (03:24):
That's right $250,000 .
Oh, you wish.
What did you just say you livein, maybe in pesos $350,000.
Speaker 2 (03:32):
What Median household income?
Oh income.
I thought you said house.
I can't hear.
Okay, let's start over.
Speaker 1 (03:38):
Please send your.
Okay, I'm ready.
Please send your money.
Operators are standing byMedian household income.
Median household income $75,000.
Very close once you actuallypay attention to my question.
$74,600.
I said $75,000.
I know that's why I said you'redangerously close.
Oh my God, Down from whatever$1.2 million that you had a
minute ago.
Speaker 2 (03:57):
Whatever?
Speaker 1 (03:58):
Okay, and now let's.
Let's talk about the averagehouse cost.
Speaker 2 (04:03):
Which is what I thought you said the first time.
You know I have a radar where Itune you out.
It's kind of hard to tune injust for a podcast, but I'm
tuning in Tokyo, I'm here.
Speaker 1 (04:13):
So median household $250,000.
$433,000.
And therein lies the rub In2022.
Speaker 2 (04:26):
2022, the average house cost.
Speaker 1 (04:28):
We made a huge jump because it was just 250,000.
The average household costmedian house cost 2022, $433,000
.
Speaker 2 (04:34):
Okay, where are we going?
Speaker 1 (04:35):
So now, the gap is 5.8 to one.
Okay, so while income went upvery steadily, housing costs
went up exponentially.
And you got to ask yourself why.
Why did this happen?
Well, two things.
One of them is you may rememberthe loose lending practices in
the year 2000s where we weregiving, basically, mortgages to
(04:57):
anybody who had a pulse and thenyou had to bail out the banks.
We had all kinds of challengesaround that.
And then you had to bail outthe banks.
We had all kinds of challengesaround that.
Was it too big to fail?
You know all of that.
And then after that we hadsuper low interest rates.
Super low interest rates.
Then we didn't have enoughinventory in the market, drove
pricing up like crazy.
So now the affordability indexis a mess To you.
Speaker 2 (05:20):
So I'm going in a different direction.
Shocking, I knew that was nextand this is what I have to say
about housing.
So because we left, the firstone was about different
generations and where they fare.
And we said we're going to talkabout it from through the lens
of housing.
Well, 73 million baby boomersin the US.
(05:42):
They retire in 2030, yet 45percent listen to this of baby
boomers have no retirement orsavings.
They're becoming homeless at arate not seen since the Great
Depression.
So think about that when we getto the finger pointing, until
we start in the last one, whenwe said, well, this is the
(06:04):
biggest transfer of wealth.
And, yes, that's true, yes,they are retiring, yes, that's
that's going to pull on SSI.
But you have to realize too, notonly so here's a generation
that, when we look at it fromyou know, pointing a finger says
the biggest transfer, a wealthbecause they had it.
(06:26):
But here's a generation that'sgoing to work longer, that
cannot retire.
When they retire, 45 percent ofthem doesn't don't have any
savings or retirement.
But I have some more numbersthat that, like literally took
my breath away too.
So so I'm going to break thisdown also Before I get into this
(06:47):
.
I also want to say there is adisparity, and I thought I had
the notes for this and I may whydon't you look for that for a
second?
Speaker 1 (07:00):
Because I want to pile on that.
I was just reading somethingthe other day.
I'm just turned 60 this yearand so you start to look at
things like how much money do Ineed to pile on that?
I was just reading somethingthe other day.
I just turned 60 this year andso you start to look at things
like how much money do I need toretire?
And I heard an economist I thinkit could have been Susie Orman
or somebody on one of themorning shows and they said that
for you to retire comfortablyat age 65, you should have about
(07:20):
between $1.4 and $1.5 million,and that's up markedly in the
last 10 years.
And again why we talked aboutsome of the inflation challenges
and pricing demands.
But the other thing they saidis that what's the average
65-year-old got in savings andit was like $87,000.
(07:42):
So that's a big gap from$87,000 to $1.4 million.
So that speaks directly to yourpoint, which is, while
millennials or Gen Zs or Gen Xsor whomever can point the finger
, we're going to have some realchallenges here coming up pretty
soon as the baby boomers startto retire and start to realize
(08:04):
that they don't have enoughmoney to retire and our life
expectancies have just continuedto increase.
Speaker 2 (08:11):
Well, another thing.
It's two issues and I don'twant it to sound like all doom
and gloom, but I think youcannot change what you don't
acknowledge.
So some of this is justinformational and these numbers
don't sound good, but in 2022,this part sounds good In theory.
In 2022, nearly 40 percent ofUS homeowners own their homes
(08:36):
outright.
According to the Census Bureaudata in Bloomington, in total,
thirty three point three millionsingle family homes and condos
were mortgage-free.
That's a 31% increase comparedto 25.4 million a decade ago.
(08:57):
So that sounds great.
That sounds hopeful.
This is where I got a knot in mystomach.
There's such a huge disparitythat now let's talk about
because we talked about thegenerations but the racial
disparity 41 millionAfrican-Americans in the US is
(09:18):
12 percent.
That's in 2021, which is 331million 331 million On average.
The numbers and this isaccording to NAR, and NAR is the
National Association ofRealtors Majority of those
homeowners are of the 33% and Ihad the actual number somewhere
(09:43):
right here are white.
The numbers cannot be stated ofafrican americans who own their
homes.
There is literally no datastating of their percentage of
homeowners in america.
What percentage of that is thatare african americans?
Speaker 1 (10:04):
well, we've talked about this.
Speaker 2 (10:05):
That makes me wanna cry, because what that says is
go back to how did this go?
What does this have to do withgeneration and different
generations?
Well, historically in America,the reason why people have an
issue with boomers is because ofthe money and historically in
(10:26):
America, the biggest transfer ofwealth, the way to earn wealth,
is between education and homeownership.
So if it's barely and I'll getto the numbers soon, I don't
want to make this a race thing,because that's another podcast
for a different day because it'ssuch a disparity in the rate of
home ownership forAfrican-Americans but if we
(10:48):
barely own our homes in a lowpercentage, and when we do, we
never own them outright.
So how do you ever close this?
You got a racial wealth gap inthe generations and racially, so
, the numbers are so skewed, youknow, and it makes me sad to
know that numbers are so skewed,you know, and it makes me sad
(11:09):
to know that, like, how can youmake this up when there's no,
there's no avenue to close thesegaps?
Speaker 1 (11:12):
Well, not only that, but and we've talked about this
on previous podcasts but thinkof it like a race, right?
And if I start a mile ahead ofyou and we are both running at
the same speed An hour later,guess what?
I'm still a mile ahead of you,and that's unfortunately the
world that we find ourselves in,or a lot of the numbers I see
(11:35):
is that minorities are making upa minute of that hour, but
that's just so slow.
So some of the economists willsay, oh, the black community
income is increasing at 3%,whereas the white income is
increasing at 4%.
But remember, that's apercentage of where they started
.
So in reality, in real terms,minorities are actually falling
(11:59):
further behind, because if Ihave a million dollars at 4%
versus $25,000 at 5%, I'm stilllosing ground, and that's what's
happening.
So it's kind of a shell gamewhat they're trying to describe.
And generational wealth is thebiggest challenge.
You nailed it.
Speaker 2 (12:14):
And since I brought that up, I thought it's fair
that I give the actual numbers.
While in a US home ownershiprate increased 65% in 2021, the
rate of African-American lagsignificantly at 44%, has only
increased 0.4 percent in 10years.
It is nearly 29 percent pointsless than white Americans at 72,
(12:36):
representing the largest blackwhite home ownership rate gap in
decades.
And then it goes on to say butthis is what I want to say Black
homeowners and renters are mostcost burdened than any other
racial group.
Less than 10 percent of blackrenters can afford to to buy
(12:58):
their typical homes.
And the reason why I felt likebringing that up is because when
we just gave the numberspreviously about the historic
high of home ownerships, peoplethat have mortgage free, the
reason that the article and youcan look this up and I'll put
the link on it from NAR, theNational Association of Realtors
(13:18):
they said the reason why thatjumped significantly.
Think about it.
So when we were going throughthe pandemic, we were going
through what we went throughwhen we looked up and we saw
that interest rates had fell inthe twos.
So all of these seniors thatwere close to the end of their
mortgage, you know they gottheir low interest paid it off,
(13:41):
you know, quick.
So therefore, that's why homeownership actually owning a home
outright, with no mortgage madethis jump Well, which is great
and that's fantastic.
But they could do that becausethey had it and they were the
number that actually had thesavings, where most of the
numbers are staggering with thepercentage that we gave, that
(14:03):
didn't have, like you said,75,000 or less, even in savings,
and then some don't have asavings at all.
So, of course, when there'stimes when the market hits, you
have to have money to make money.
We say that all the time, youknow you have to have money to
take advantage of those things.
Speaker 1 (14:23):
So there was an interesting article when it was
this published 2021, in BusinessInsider, called Millennials are
the highest earning generationbut hold way less wealth, which
would seem like a contradictionin terms.
I want to read to you a littlebit.
And the section that they callis called an affordability
crisis and it says the cost ofliving increases have outpaced
(14:46):
wage increases.
Some services and goods havebecome way more expensive than
others over the last 21 years,with costs for things like see
if millennials and Gen Z thinkof these as important college
tuition, health care and childcare far exceeding our hourly
wage hikes.
The most recent pay scale indexfound that wages have increased
by 19% in the United Statessince 2006.
(15:09):
But when you factor ininflation, real wages have
declined by 8.8%.
That means that workers haveless purchasing power than they
used to.
It's especially a problem formillennials, who have faced one
economic woe after another.
Two recessions before the ageof 40 and a staggering student
debt load, coupled with soaringliving costs, have created an
(15:31):
affordability index for thegeneration that's, even with
six-figure earning, feelingbroke.
And we were talking about thisbefore we started filming and
Mark, who does our podcast, saidyou know, there's this
delusional thought now that oureducators are pushing that says,
oh, you have to go to college,oh, you have to go to college,
you have to go to college.
And we're forgetting the factthat there are good vocational
(15:52):
careers and there are othercareers that perhaps don't need
to go to college and we'reactually saddling our kids with
these massive student debts.
And then we complain when theysay I can't pay my student loans
or they can't afford a carpayment or these other things.
Clearly, purchasing power hasdropped almost 9% in the last 10
(16:15):
, 15 years.
Speaker 2 (16:16):
Well, I'm going to say something, and I know I'm
not saying this for argument'ssake, it's just food for thought
.
I know the millennials aren'tgoing to like it, I'm going to
like it.
But so all of those factors aretrue and all of that the
financial burden was laid on,was handed down to them Unfair,
unjust.
I don't even believe infairness.
It's a different conversation.
(16:37):
But generations before themillennials, we did have delayed
gratification.
We did Funny shit.
I want to get into that.
We had delayed gratification.
Speaker 1 (16:46):
We did Funny.
You say that I want to get intothat.
Speaker 2 (16:48):
We had delayed gratification.
We came up.
I promise you my car was thebiggest hooptie on the planet.
Like literally, I would justdrive down the road and my
lights would go.
It shouldn't have been on theroad.
They went.
What?
Okay, like seriously, I meancars would start honking because
I had an electrical issue and Icouldn't afford to get a fix.
Speaker 1 (17:09):
It shouldn't have been out there I had a car in
college.
You couldn't go reverse.
Yeah, didn't go in reverse.
Speaker 2 (17:13):
That's what I'm saying, and I literally had rust
spots and holes.
I couldn't go through car washbecause, you know, because it'll
get wet Nevertheless.
But each generation had astarter, everything.
That's how we in America.
You had a small house, we had800, 900 square foot home and we
stayed in there, not until wegot this, until our families
(17:36):
outgrew it, and then we went toa bigger home.
Speaker 1 (17:38):
I want to jump, I want to pile on that.
Why is it different?
Now Tell me why.
I'm not going to tell you why Ithink it is, but you tell me
why we put up with cars thatdidn't go in reverse or cars
that went Because we weren'tgiven anything, so we had to,
because there was no expectation.
But why did we put up with itand people today won't?
Why were we willing to put upwith it?
(17:58):
Who is we Tato, we, we, we, we,we.
Who Us Us?
Is us usses?
It clarified because we'retalking about our generation was
willing to drive cars it didn'tgo backwards or cars that went
you missed your line again youknow, whatever it was, okay, we
put up with that.
We lived in little homes, wedidn't.
But today they don't want to dothat.
And why don't they want to dothat?
(18:19):
Why don't they want to do that?
Speaker 2 (18:20):
you're missing your line, it's not the fact that,
first of all, you're not sayingit correctly.
It's not the fact that we putup with it.
That is not what it is.
That was the only option we had.
My mom used to call it duck orno dinner.
That means you eat this duck oryou don't eat shit.
Nothing, that was all we had.
So putting up with somethingmeaning you have an option.
(18:41):
When you put up with something,you put up with it because you
have a choice.
Speaker 1 (18:48):
I'm putting up with something.
You put up with it because youhave a choice.
I'm putting up with this, but Icould leave.
Speaker 2 (18:51):
I have a choice.
I couldn't roller skate to workbecause those were the only
other wheels, so why is itdifferent?
Speaker 1 (18:57):
today.
Why is it different today?
I'm going to give you one word.
Speaker 2 (19:01):
No, first of all, you're going to let me Okay,
talk, I'm done to credit.
So that's part.
No, well, this is what I haveto say to that.
And I understand that.
I think my generation was thefirst because right after the
Obama came in and and really gotafter may change the laws where
(19:26):
these creditors just couldn'tinundate college campuses.
I think that generation, whatgeneration is it?
Generation X was the firstgeneration that literally saw
you know these credit cardcompanies like so as you get to
college, here you go.
So as you get to college, hereyou go.
So it was there with generationX.
But our generation, we saw thestruggle.
(19:49):
Most of us worked at a veryyoung age.
Speaker 1 (19:52):
How old were you when you had your first credit card?
Speaker 2 (19:58):
That's a great question.
I wouldn't take it.
That's a whole otherconversation for another day.
I was in my 20s when I startedusing credit cards.
Speaker 1 (20:04):
What do you think today?
What's the average age thatsomebody gets a credit card?
I mean, you look at the averagedebt.
Speaker 2 (20:09):
I know my kids got them when I I mean well, got
banking cards, which was creditcards too, and access.
I think they were about 15.
Speaker 1 (20:18):
Right.
But it wasn't that it wasn't,they weren't balling out, it was
not a bet.
I would argue that our culturehas changed to the point where
we are okay with being in debt.
We're comfortable with being indebt, but Toby.
Speaker 2 (20:32):
I think that that's a disconnect, because I
understand what you're saying,but where I think the bigger
point.
My point was where's thedelayed gratification?
Because you're putting it oncredit cards.
Speaker 1 (20:43):
I'm putting it on credit, no Credit in general,
whether it's you can get intothis car today or you can buy
this house, because of thesesubprime mortgages.
Speaker 2 (20:52):
Ideology, though I understand that.
Speaker 1 (20:54):
But I'm talking about ideology.
Speaker 2 (20:55):
Where did it come?
Where we felt like you know,and I think our generation
started it.
I think our generation startedit.
I think our generation becausewe wanted them to have more and
said when you graduate, you geta car, when you graduate, you
get this.
And the generation before them,if they got a car, it was the
their parents car, that they oldclunker and they were happy for
(21:16):
like god, as long as it wasn'tthat station wagon with the
brown wood.
But even if you got that, it'sbetter than roller skates, I'm
telling you, than a bus pass.
But so then we took that awayand said, you know, we just,
they started us off if theycould not.
Everyone got even a parent'scar, I didn't, you know, but
(21:36):
they started us off with whatthey had, because their thing is
, you know, you earn your own.
I'm giving you something to getyou to point a, to point b.
And then we came along andbefore some of the kids got in
high school, my, my daughter wetalked about this with our kids
went to a school where a kid wasgiven a g-wagon a mercedes
g-wagon, like that's six figures, like what the in high school,
(21:59):
that's irresponsible judging butnot judging.
So we came with that thing wherewe wanted our children to show
they're my children, so if Ihave status they have to show
status.
That's on us, that's not them.
But I'm saying, even when itcame down to the starter homes,
you know, most everyone I knowstarted at 2,000 square feet or
(22:21):
bigger.
I don't know where anyone hasstarted and that's the theory.
Speaker 1 (22:26):
I'm not saying that expectation.
I guess what I'm trying to getat is that.
Speaker 2 (22:30):
But that's not a credit card.
Speaker 1 (22:31):
Well, but there's a number of things that have
changed socially as well asfinancially, as we've seen that
have created almost this perfectstorm of expectation where you
know our quality of life hasimproved, right, I mean, I guess
you could argue we all live in.
We saw last night we werewatching that the baseball game
and they said that you know,back in 1910, something like 15%
(22:52):
of houses had toilets.
I mean 1910, that wasn't thatlong ago and now our expectation
is you're going to live in ahouse with air conditioning and
you're going to live in a house,perhaps a garage, so many
square feet.
So our expectations havechanged.
I was about to get off topicShocking.
Our quality of life hasimproved, but it's also the cost
of life has increased as well,and so one of the things I
(23:13):
wanted to talk about is what doyou think, as a country, we can
do to try?
What are some of the key things?
If you were running for office,what were the two or three
things you'd do to try tocontrol the affordability crisis
?
How do we make housing moreaffordable?
Let's start there.
How would we make housing moreaffordable?
Speaker 2 (23:34):
I would, so this is my presidential speech.
Speaker 1 (23:37):
There you go.
Speaker 2 (23:37):
America come in.
First of all, we need to revampand yes, this is personal and
I'm fine now but we really needto revamp our credit system,
this FICO system, the way we docredit.
It is unfair, it is unjust andimbalanced, and I'm going to
(24:01):
give you a part.
Why do you say that, tresha?
I'll tell you because what it's, a system that says a lot of
our structure and system inAmerica is set up to award the
reward the rich, and so FICO isanother way.
So they say if you're absolutelyperfect, if you you know you
have X amount in a bank and youdo all this, never miss a
(24:24):
payment, we're going to make iteasy for you to get credit.
So you're going to make iteasier for the people who need
credit the less, to get morecredit.
So for poor people who actuallycan't make it from day to day,
who needs grace, grace is credit.
Credit buys you time.
For the people that need grace,you make it harder, you charge
(24:46):
them more.
So I pray America's listen.
This system is broke and it'sflawed, and it goes back to the
last podcast we talked aboutScott Galloway, but it goes back
to his point of, like you know,so you put money into Social
Security and you pay all of thisin.
If you have five, six, 10, 15,20 million dollars, why are you
taking down Social Security?
(25:07):
You don't need it, so we needto create a system.
Speaker 1 (25:11):
You're not answering my question, I'm going to bring
you back.
I want actionable things In thelast 20,.
In the last 28 years, houseshave gone from seventy eight
thousand dollars, no, no.
Stay with me.
In the last 28 years, houseshave gone from $78,000.
No, no, stay with me.
In the last 28 years, houseshave gone from $78,000 to
$433,000.
How do we make them moreaffordable?
I want actionable steps and Iunderstand credit.
(25:34):
Credit works for me.
Speaker 2 (25:35):
Because, first of all , they've got to be able to buy
the house.
Speaker 1 (25:38):
How do we make housing cheaper?
Speaker 2 (25:40):
How do we make housing cheaper?
What will make housing cheaper?
How do we make housing cheaper?
We start.
What will make housing cheaperif we have more and Bishop TD
Jakes is working on this too,where he's got a billion dollar
funding with Wells Fargo to domore mixed income communities.
What created this disparity iswhen we start saying I'm over
(26:03):
here, you over there, this zipcode is versus, you're next to
me, and because we drew thisline.
So once we start having moremixed income communities, these
and these properties will notappreciate at the level that
they're going.
We will have more balance andwe'll have more affordability.
But the minute where you saybecause I'm over here and I'm in
(26:26):
this zip code, so that's wherewe can start, we can start
saying how do we bring moreunity, more diversity, more
diverse incomes into communities?
That's going to start.
We need to get rid of redlining.
I'll be here all day.
Speaker 1 (26:41):
It's a thousand things I can do.
I just want to blood hammerthem, because these are some
interesting points there shouldnot be Redlining should be
unconstitutional.
Speaker 2 (26:48):
It should be against the law.
You should not be able to drawa line in America and say,
because you are of this race orthis socioeconomic background,
this line is drawn because Ineed to protect their property
from yours.
Until we start and this is notme just saying take from the
(27:09):
rich and give to the poor.
That's not what I'm saying.
Speaker 1 (27:15):
That's saying, let's erase all of these lines that
separate us.
To begin with, how do we getbuilders to start building
low-cost housing as opposed tobuilding high-cost housing?
How do we incent lower costhousing?
Because that's the challenge.
I mean, I was in Toronto acouple of weeks ago and
everybody's building high costhousing.
How do we, how do we incentbuilders to build low cost
housing to fix this, to lowerthis gap?
Speaker 2 (27:34):
But it goes back to saying there is a way.
So they bought this up when it.
When it came down to I hate tobring his name up again Scott
Galloway, but when they weretalking about the tax and
revamping our tax code and ourtax system, here's a thought.
It's not like we'retransferring wealth, but more
(27:54):
people factually and I have thisin my notes.
I want to say this quickly.
They brought this up in apodcast and they said that Simon
Sinek bought this up and saidhe was like.
I did a quick study.
He was like Rockefeller,carnegie and a lot of the rich
people who were rich during theVictorian era.
There was no tax code.
(28:16):
They didn't give incentives forthem to give back.
But everyone knows that,carnegie, you may have whatever
issues you want to have withthem, but there was philanthropy
when there was no tax incentive.
So I'm going somewhere.
So these people were givenbeing the Brits and Americans
back in the Victorian days.
And we know, carnegie, we stillhave Carnegie Hall and other
(28:37):
places.
Speaker 1 (28:37):
Carnegie Deli yeah.
Speaker 2 (28:38):
No, I should tell you .
So they gave even when there isno tax incentives, he goes.
Why did they give?
Because back then they feltthat there was a moral
obligation to say OK, now we'renot, you're going to pay a
little more, but you get to saywhere your money goes.
I think that would change allof this.
(29:13):
I think people that make morewill be more amped to give when
you say OK, you know what, I canhave this as the Malbec
Institute of whatever the casemay be.
You know what I can have thisas the Malbec Institute of,
whatever the case may be.
Then we start changing the taxcode, changing those things and
giving people who pay moredifferent initiatives to put
their money to, and then we canstart making changes, because
now we can have home endowmentsand say you know what I want my
(29:37):
money to go to?
A lot of the deals with youknow the plight of the homeless
and all of these things, andthat's, yeah, the Malbec
Institute of Tomfoolery is whatwe're going to do.
Speaker 1 (29:48):
We tried to boil the ocean in the last two episodes
two podcasts.
Speaker 2 (29:52):
We did a lot.
Speaker 1 (29:52):
We want to hear from you, give us some ideas of
topics you'd like us to coveralong this line, because there's
a lot to cover as we try toreally fix up some, some screwed
up stuff, and some of it's ourfault, some of it's not, some of
it's, you know, technologyrunning amok, some, some of it's
just us not keeping up withwhat's going on.
But, um, we, we appreciate youtaking the time with us today,
(30:13):
um, and we appreciate thefeedback you guys always give us
.
And, uh, until we see you again.
Speaker 2 (30:18):
I do want to say until we see.
I do want to say we doencourage you guys to subscribe,
to join us, because, ideally,we're not just doing this to get
numbers up.
That's great.
I really want to get to thepoint where we have a big enough
following and support so we canhave live conversations.
(30:41):
I want to have liveconversations because I want
feedback.
We really want to do what wecan to be some kind of
instrument of change and giveeveryone a voice.
So that's important.
So subscribe.
I don't even like saying likeus because I'm like like me,
please, like me, but please andfor those of you older people
who don't know how to subscribe,because I had that happen too
(31:02):
Like I keep pushing a button notthe button you see on the
screen and in YouTube, it's abutton beneath that says
subscribe and it'll give you alittle bell.
But yeah, we really want to golive.
We really want your feedback,your participation.
So until we meet again, we'llsee you on the perch, take care.
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