Times have changed! The children of the Depression era paid cash for everything for the rest of their lives, and admonished their children to never, NEVER buy stocks!
Their children, the WWII generation, also knew hard times (fathers and uncles off to war, some never to return, rationing, blackouts, making do with what one had, fear and insecurity), and like their parents, they learned to pay cash for things, and never, NEVER to invest in the stockmarket.
But the children of the children of the Depression grew up in affluent times. They loved the stockmarket and created its bubble. They have not yet experienced the economic hardships that seem to descend at least once upon every generation. They have never learned to budget, nor (yet) have they had to. They spend whatever they earn and more.
When I started in real estate in Southern California back in '85, people came to me with their nesteggs to buy a starter home that "would do" until they could afford better (and took on mortgages at 12-13%).
Today, couples in their 30's, making combined incomes of over $150K, come to me to buy their dream homes (nothing but the best for this generation), but don't have a penney saved to use as a downpayment. They get 80% loan-to-value mortgages, and a second mortgage to pay the other 20%. They have no cash in these properties, so when times get tough, or they lose their high-paying jobs, they just walk away, like owners did in the real estate crash of the early '90's (when buyers had to put a minimum of 10% down except for VA and FHA loans), which resulted in so many S&L's going under.
This attitude of financial irresponsibility is pervasive in our society today, as reflected in the state of the overall economy. But the reality is that there are consequences. The piper has to be paid eventually.
Unfortunately (or perhaps fortunately?), like every generation before them, the current generation of young adults may be about to get a serious lesson in reality!
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