# The Screwed Generation: What the boomers are leaving their children



## andrewf

From Macleans...

*What the boomers are leaving their children*
Fewer jobs. Lower pay. Higher taxes.
Now the Screwed Generation is starting to push back.


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## Square Root

Sounds awful (as these things usually do). Didn't read the whole thing but an obvious offset would be any assets that the baby boom generation passes on to its children. My daughter may experience the hardships mentioned in the article but will be getting a sizeable inheritance to help reduce any negative outcomes. I would think that if you are relying on Gov'ts for pensions, health care, etc things will get tougher. This will also be true for boomers in the next 20-30 years.


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## Jungle

Thought this stood out, (besides how they are going to pay for all that health care)

"A recent TD Bank survey found that just 44 per cent of Canadian boomers have actually paid off their mortgages. And among those who haven’t, a quarter still had 75 per cent or more of the debt left to pay down."

:S


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## HaroldCrump

This is a very good article.
And very relevant to what's happening today in all socio-capitalist democratic countries around the world.
In the post war era, socio-capitalist countries went crazy building large public sectors, welfare states, guaranteed jobs, pensions, health care etc.
And now our generation is left to foot the bill.
As the recent financial crisis shows, _we_ cannot continue this borrowing-from-our-kids cycle.
Screwed generation is a very apt term.


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## the-royal-mail

I think the younger generation will have less health care, higher taxes and living expenses, higher real estate and transportation costs and fewer housing options. Oh and this is the same generation that must have it all right away when they are 25+, and they don't mind forgoing personal rainy day savings and racking up uber debts to get it all.

I think the boomers and their parents were far better money managers.

This poor money management coupled with more and more lobby demands on gov't funds than ever before could bankrupt us all.

We need to lower our expectations and learn to do without. Attitudes need to change.


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## andrewf

This article also makes me skeptical about real estate. I wouldn't be surprised if real estate is flat to slightly negative over the next 20 years, at least in real terms. The upshot is that I will likely keep any property purchases modest to minimize my illiquid exposure to real estate.


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## andrewf

the-royal-mail said:


> I think the younger generation will have less health care, higher taxes and living expenses, higher real estate and transportation costs and fewer housing options. Oh and this is the same generation that must have it all right away when they are 25+, and they don't mind forgoing personal rainy day savings and racking up uber debts to get it all.
> 
> I think the boomers and their parents were far better money managers.
> 
> This poor money management coupled with more and more lobby demands on gov't funds than ever before could bankrupt us all.
> 
> We need to lower our expectations and learn to do without. Attitudes need to change.


You realise that this article doesn't really support your thesis that the boomers are good money managers. 25% of boomers who still have a mortgage owe more than 75% of the value of the property.


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## the-royal-mail

Stats can easily be manipulated. Don't start picking apart my posts again. I stand by my assertion that the boomers are better money managers than their children.


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## plen

the-royal-mail said:


> Stats can easily be manipulated.


So can personal assertions 

It's impossible to compare living your 20-40s in the 70s and 80s with doing it now in my opinion. 

My anecdotal evidence is they were better money managers because it was easier to manage your money. Convenience and competition has bred a debt laden world. 

I don't blame the newer generations insomuch as humanity's greed and the options opened to them as technology and competition grew.


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## HaroldCrump

the-royal-mail said:


> Stats can easily be manipulated. Don't start picking apart my posts again. I stand by my assertion that the boomers are better money managers than their children.


Well, TRM, my opinion is that the boomers' money management and/or investing skills weren't really tested.
Their _savings_ skills are perhaps better than the following couple of generations (including ours).
Their parents' generation (i.e. the Great Depressioners) savings skills were definetely much better.
The boomers lived through the Golden Age of high government spending, a socio capitalist, democratic society, a welfare state providing excellent health care, guaranteed pensions, etc.
Very few of them had to invest on their own.
Most of them knew nothing of the stock market, how to pick stocks, etc.
Their debt management skills (or the lack of) was never truly tested since the credit revolution had not happened yet, until midway through their working years.

Those two facts combined make it difficult for us to judge their money management skills vis-a-vis our own.
Of course, all of us do fondly remember how frugal our parents were (are), the comforts provided during our childhood, etc. but it is hard to do a true apples-to-apples comparison.


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## dogcom

The title sounds like an entitlement and that is wrong. Todays generation may be looking for a pass down or handout that never entered my mind growing up. I don't care if my parents give me nothing and instead take care of themselves to the grave. I deserve to take care of myself and not rely on my parents for anything because they sacrificed to bring me up.

Take responsibility for your actions is a foreign thing for most people today. This is the thing that the recession and the possible depression will force the younger generation to realize. And by the way I am only 46 and still feel this way.


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## Karen

dogcom said:


> Take responsibility for your actions is a foreign thing for most people today. This is the thing that the recession and the possible depression will force the younger generation to realize. And by the way I am only 46 and still feel this way.


Unless I'm misunderstanding what you're saying, Dogcom, I think you've missed the point. I certainly agree that young people should be made to take responsibility for THEIR OWN actions, but aren't we asking them to take responsibility for OUR actions (I'm 67) by burdening them with the huge public debt we have allowed our governments to incur on our behalf and that we won't possibly be able to pay down during our lifetimes? I think we have a lot to answer for in that regard.


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## osc

The debt built the highways and all the infrastructure that we enjoy. The boomer generation built a society where most people are equal, where the working people have at least minimal protection. They brought us computers, the Internet and a better understanding of the Universe. The society is much better and technologically advanced than it was 40-50 years ago. 
So quit complaining, things are pretty good and will get better, unless the right wing nuts will reverse all progress and take us back to the 1920s.


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## Square Root

This topic has encouraged a long list os sweeping genetalizations. We and they(next generation) are not going "to hell in a handbasket". I am much more optimistic than the earlier posters. To support this assertion, I would need to use sweeping generalizations.


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## kcowan

HaroldCrump said:


> ...Of course, all of us do fondly remember how frugal our parents were (are), the comforts provided during our childhood, etc. but it is hard to do a true apples-to-apples comparison.


I can confirm that my parents hated debt and always saved up to buy things.


Square Root said:


> This topic has encouraged a long list of sweeping genetalizations. We and they(next generation) are not going "to hell in a handbasket". I am much more optimistic than the earlier posters. To support this assertion, I would need to use sweeping generalizations.


My generation embraced debt as a way of life. The difference was that we kept it in balance. Plus we enjoyed seeing our wages go up by multiples. I was making 4x my starting salary within 5 years, and my final salary was over 30x. This enabled the carrying of debt without being overly committed to it. Granted that was during inflation but inflation was what made debt attractive.


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## Sampson

andrewf said:


> You realise that this article doesn't really support your thesis that the boomers are good money managers. 25% of boomers who still have a mortgage owe more than 75% of the value of the property.


This isn't evidence that they are poor money managers. 14% of boomers owe 75% or more on their homes. What will the % be for boomer's children? and how much do they owe now, compared to boomers when they were younger?


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## andrewf

dogcom said:


> The title sounds like an entitlement and that is wrong. Todays generation may be looking for a pass down or handout that never entered my mind growing up. I don't care if my parents give me nothing and instead take care of themselves to the grave. I deserve to take care of myself and not rely on my parents for anything because they sacrificed to bring me up.
> 
> Take responsibility for your actions is a foreign thing for most people today. This is the thing that the recession and the possible depression will force the younger generation to realize. And by the way I am only 46 and still feel this way.


The title of the article refers to how boomers are going to suck the government dry, rack up its credit cards and max out its overdraft before they kick the bucket. Not about the inheritance the boomers may or may not leave their children. The inheritance of their children will be debt.


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## andrewf

osc said:


> The debt built the highways and all the infrastructure that we enjoy. The boomer generation built a society where most people are equal, where the working people have at least minimal protection. They brought us computers, the Internet and a better understanding of the Universe. The society is much better and technologically advanced than it was 40-50 years ago.
> So quit complaining, things are pretty good and will get better, unless the right wing nuts will reverse all progress and take us back to the 1920s.


The last twenty years have been characterized by chronic underinvestment in infrastructure. Much of what we enjoy now was built in the '50s and '60s by the parents of the boomers. The TTC was built almost entirely before 1980, for instance. The boomers took a 30 year holiday from investing in infrastructure, and we've racked up a huge infrastructure deficit in this country, on the order of $150 billion.


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## kcowan

Yes public debt should be outlawed. Every generation needs to pay its own way. 20 year debentures are OK for capital projects but that is the extent of it.


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## Cal

Maybe the baby boomers were just crappy voters, to allow for this to happen. Collectively their vote carries alot of weight.

I do think that pension plans will help many boomers in retirement, so perhaps they did not care as much about the future with their defined benefit plans.

This generation, pensions plans are a rarity. Gov't jobs basically, teachers, city employees. Not many places offer pensions now. This generation has to take finances seriously, or retire poor.

I dont' mind the gov't carrying some debt, kinda like a business loan to become more productive....although the more recent debt that the gov't took on isn't that type.


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## OptsyEagle

The problem is two fold:

First, all a politician has to do is offer a new service or benefit to its constituents and they get the votes they want. No one ever seems to care "how" or even "if" it will ever get paid for.

Secondly, as soon as anyone, including all of us, receive even the simplest government service or benefit, it becomes an entitlement. Plain and simple. If the government ever tries to cancel it or charge for it, we scream like babies that they should leave it alone and get rid of some other service, benefit or program used by someone else that is not as deserving as we are.

Then we are back to problem number one, where we throw that polician out of office and re-elect another one that gives everything back to us cry babies, by borrowing more money to pay for it, since we don't care much for higher taxes either.

I should clarify that, its not that we have anything against higher taxes, it is just that it is always blaringly obvious that our neighbour should be paying these taxes, instead of us. After all, I am a single mother with two kids, or I am trying to grow my business, or I am a senior living on a fixed income.

Anyway, sorry for the rant. If you want to know how this will all play out, I will tell you. The debt will continue until they won't lend us money anymore. That day may be coming soon, its tough to say. In the mean time, the government debts will grow. It the a law of democracy. Debts and democracy go together like pie and ice cream. It cannot be changed.


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## osc

I think we are missing the issue. It's not about the boomers or any other generation. It's about a rogue country that, in cooperation with the big corporations, are screwing the world economy for the benefit of the very rich. The free market is a joke when a communist dictatorship in bed with the biggest corporations and the richest of the rich is controlling its currency so that it keeps the workforce in a perpetual slave-like status and dumps cheap crap on the developed world. 
The working people in the developed countries have no chance to compete with that. As a result, the middle class is shrinking and the rich get richer. The only way to not be left behind is to stop working and become an "investor", a money manipulator, a do-nothing parasite, like the rest of the rich.


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## the-royal-mail

OptsyEagle said:


> The problem is two fold:
> 
> First, all a politician has to do is offer a new service or benefit to its constituents and they get the votes they want. No one ever seems to care "how" or even "if" it will ever get paid for.
> 
> Secondly, as soon as anyone, including all of us, receive even the simplest government service or benefit, it becomes an entitlement. Plain and simple. If the government ever tries to cancel it or charge for it, we scream like babies that they should leave it alone and get rid of some other service, benefit or program used by someone else that is not as deserving as we are.
> 
> Then we are back to problem number one, where we throw that polician out of office and re-elect another one that gives everything back to us cry babies, by borrowing more money to pay for it, since we don't care much for higher taxes either.
> 
> I should clarify that, its not that we have anything against higher taxes, it is just that it is always blaringly obvious that our neighbour should be paying these taxes, instead of us. After all, I am a single mother with two kids, or I am trying to grow my business, or I am a senior living on a fixed income.
> 
> Anyway, sorry for the rant. If you want to know how this will all play out, I will tell you. The debt will continue until they won't lend us money anymore. That day may be coming soon, its tough to say. In the mean time, the government debts will grow. It the a law of democracy. Debts and democracy go together like pie and ice cream. It cannot be changed.


I completely agree with this. Politicians want to get elected and will say whatever they think we want to hear to get there. I would also add that a flurry of lobby groups in our society are continually demanding special programs just for their own needs. Never mind the fact these accommodations come at a tremendous cost to the overall tax base. After a few years of this, the gov't is spending more than it is bringing in to pay for appeasing these lobbyists and they are again looking to the middle class (rather than the lobby groups) to pay more taxes to keep paying for all of this. Anytime someone is opposed to this, the left-wing nuts start with their rhetoric and name-calling.

I've also noticed that whenever the gov't tries to reduce its costs on all these programs, the aformentioned lobby groups will pull the victim card and use the media to trumpet their false message that they were targetted and whine like babies. As eagle says, they say the costs should come from 'somewhere else'...after a while the middle class simply can't keep paying for all these social groups' demands.

Methinks we would see far less "activists" and lobby groups and coalitions in society if they were funding the projects they feel so adamantly about.


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## warp

Its a simple equation for me:

The bigger government gets...the poorer its citizens get.

There are several reasons for this...not the least of which is that goverments are NOTORIOUSLY bad at spending taxpayer dollars, or getting any lasting benefit for that spending.

The "social experiment" has failed.

Too many people getting too much, for too little, with many getting paid to do nothing at all.
Everbody these days feels "entitled" to this and that. 

Being a boomer myself..and part of that experiment gives me no great pleasure.

There is a place for govt and govt services.....but their tug on daily life has gotten totally out of hand. 

My solution is to get my son and my nephews/nieces ready by teaching them about money management...and leaving them a nest egg when Im gone.

They will indeed, no doubt, pay more taxes, and get less in return to pay for "our" mistakes. They may be the first generation in a long time to live below the level of their parents.

And its a dam shame


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## Larry6417

I agree with the article's fundamental premise: one generation should not burden the next with debt. However, the article loses much of its credibility with illogical, inconsistent arguments and selective (sometimes incorrect) use of facts. 

For example, Japan should not be mentioned in an article titled "What the Boomers are Leaving their Children." Japan *never* had a baby boom. Economic conditions were especially harsh post WWII. Japan's debt situation is exacerbated by misguided attempts at financial stimulus and xenophobia (Japan discourages immigration). Also, it's bizarre to mention India in the same article. India's baby boom was much later. In 2020, India will still have ~ 300 million people below the age of 30. Of course its pension situation looks better! See http://www.census.gov/ipc/prod/ib-9701.pdf

The article's arguments are inconsistent. In one section, the article laments the massive future pension obligations of Canadians. Yet, the article goes on to lambaste boomers for wanting to work beyond retirement age! Does the author not realize that working longer is at least a partial solution to our looming pension problems? The author criticizes boomers for their sense of entitlement (for wanting to work longer), yet that criticism is based on the premise that it is "moral/ correct/ natural" for older workers to step aside for younger workers. Talk about sense of entitlement! I believe employment should be based on merit, not age. In practice, however, employers usually choose the younger worker. For the record, I'm one of the incredibly "narcissistic" Gen-Ys the article refers to.

Also, the article mocks boomers for their "angry" politics e.g. Rob Ford, Tea Party. Again, the argument is inconsistent. I don't consider myself a Tea Party sympathizer, but I do believe in reducing gov't expenditures and taxation. Young people who don't want their parents' debts should applaud attempts at cutting taxes.

Pompous, portentous articles prophesying doom sell magazines, but aren't necessarily a great basis for discussion. The debt situation in Canada could be much better, but the situation is fixable. See www.economist.com/blogs/buttonwood/2010/06/indebtedness_after_financial_crisis

Canada's net debt is 30% - not as good as Australia (0.2%) or Norway (-153%), but solvable. This also disproves one of the silly arguments made in the article - that boomers (in every country) are inherently selfish. If this is the case, why are so many countries (like Australia, Norway, and Sweden) doing so much better?

- from a Gen Yer who takes silly rants with a grain of salt


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## kcowan

warp said:


> ...They will indeed, no doubt, pay more taxes, and get less in return to pay for "our" mistakes. They may be the first generation in a long time to live below the level of their parents.
> 
> And its a dam shame


You are talking about the NOW generation who have never waited for anything?


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## GeniusBoy27

It's an interesting thread and debate. 

There's a whole line of arguments that you could philosophically argue ... "what is the appropriate living standard? what is the role of government?", and so forth ... I think most of us are intelligent enough to be able to argue both sides of the coin. 

Like Larry, I don't think our situation in untenable. Yes, we could be in a better fiscal situation, but we should be more intelligent on how we achieve those solutions. Maybe it's a combination of more fiscal government prudence and higher taxes.

I think Paul Martin had it right when he was finance minister. Let's get back to the essentials. Be prudent in our estimations, and create concrete surpluses that improve things over time. 

I laugh when I hear things like an outcry over the HST. It's really an immense folly, when a more efficient and simplifying tax is put into play, with a trade off of lower income taxes. I mean, if you really wanted to increase real value into people's pockets: lower income taxes, and force people to pay for increased consumption. Increase alcohol, smoking, and gasoline tax. Increase the GST/HST.

Why does Bay St. like the HST? It's because it really is significant more economically efficient than 2 different taxes. It benefits small business owners, and it reshapes the consumption equation.

As well, the more I think of it, the more I like Steve Forbes' flat tax equation. Simplify the tax code. Reduce the exemptions. Make it easier for people to do their taxes.


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## HaroldCrump

OptsyEagle said:


> Secondly, as soon as anyone, including all of us, receive even the simplest government service or benefit, it becomes an entitlement. Plain and simple. If the government ever tries to cancel it or charge for it, we scream like babies that they should leave it alone and get rid of some other service


It works the other way round too - during certain times, the govt. imposes additional taxation (such as during war times, health care crisis, or other national crisis).
However, the entire public sector now learns to "adapt" to this new level of public funding being available.
Therefore, evem after that situation is over, the taxes that were levied are never withdrawn, because the public sector has now expanded itself to spend that money.
This is why you rarely (if ever) see taxes that were once imposed get reduced or removed.
The rare examples being the scaling back of the GST from 7% to 5%.
I've always believed that like hot air, public sector will always automatically expand to exhaust all available funding.


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## GeniusBoy27

HaroldCrump said:


> It works the other way round too - during certain times, the govt. imposes additional taxation (such as during war times, health care crisis, or other national crisis).
> However, the entire public sector now learns to "adapt" to this new level of public funding being available.
> Therefore, evem after that situation is over, the taxes that were levied are never withdrawn, because the public sector has now expanded itself to spend that money.
> This is why you rarely (if ever) see taxes that were once imposed get reduced or removed.
> The rare examples being the scaling back of the GST from 7% to 5%.
> I've always believed that like hot air, public sector will always automatically expand to exhaust all available funding.


I think the bigger tax cuts were the income tax cuts made by Paul Martin, which actually had larger impacts on savings and investment. To be honest, I rather have the continued government fiscal restraint held by Paul Martin (under whatever stripe: Conservative or Liberal), then the current Big Government under Harper.

The GST cuts were not economically efficient (as many of the economists pointed out at the time), though politically visible. However, it came at the tradeoff of further reductions in income taxes.


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## andrewf

The problem with the Liberal's tax cuts is that they cut personal income taxes, which is something voters only notice once or twice when they get a bump in their take-home pay. It's good economic policy, but bad politics. Harper was pretty canny in choosing the GST to cut. It's relatively visible, even though it is the last tax one should want to cut. Good politics, bad policy.

Now, the real problem is that our government is borrowing at a time it should be saving. The boomers are largely still working, and should not be increasing our federal debt at a rate of 10% a year. We're going to have to borrow extensively to keep them in the lifestyle they've come to expect in retirement, so we need to leave some room on the credit card to borrow later. I know people don't think we should ever have to feel the pain of a recession, spending cut or tax rise. But all we're doing now is downloading those pains to our children. 

If you're a twenty or thirty something, you might want to reconsider RRSP contributions. Chances are, taxes are going way up in 10 to 15 years, once the boomers don't have to pay them anymore, but are still alive to vote for doubling CPP, OAS and improved health care. After all, they deserve it.


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## warp

I still can't see whay we cant simplify our tax system.

It is wildly complicated, and incomprehensible to the majority of tax payers.

As paying taxes is a legal requirement....it stands to reason that regular taxpayers should be able to UNDERSTAND it!!

Seems to me that a "flat tax" system would work better.
Maybe even a two bracket flat tax.

First $15 K ...tax free.
15% flat tax on next $100K
25% flat tax on anything over that.

$2k deduction for each dependant child under 18
$8K deduction for seniors over 65
$8K deduction for disability
$5K deduction for education ( max)

Capital gains.....50% inclusion rate...( eg half is taxable )
Rental income ...75% inclusion rate...( for the aggravation of tenants)
Dividend income..75% inclusion rate
Interest income...90% inclusion rate...( compensation for inflation)


Thats it....simple....one page tax returns...no complications...no nonsense

To eliminate under the table tax evasion....make the penalties so extreme, its not worth trying....eg, 10 times the taxes you would of owed if you get caught, and a lifetime of audits to look forward to.

Note that this includes federal AND provincial taxes...let them fight over how to divide it up.

I bet this would result in higher overall tax revenue for the govts, and would also stimulate the economy.

Any thoughts?


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## andrewf

warp said:


> I still can't see whay we cant simplify our tax system.
> 
> It is wildly complicated, and incomprehensible to the majority of tax payers.
> 
> As paying taxes is a legal requirement....it stands to reason that regular taxpayers should be able to UNDERSTAND it!!
> 
> Seems to me that a "flat tax" system would work better.
> Maybe even a two bracket flat tax.
> 
> First $15 K ...tax free.
> 15% flat tax on next $100K
> 25% flat tax on anything over that.
> 
> $2k deduction for each dependant child under 18
> $8K deduction for seniors over 65
> $8K deduction for disability
> $5K deduction for education ( max)
> 
> Capital gains.....50% inclusion rate...( eg half is taxable )
> Rental income ...75% inclusion rate...( for the aggravation of tenants)
> Dividend income..75% inclusion rate
> Interest income...90% inclusion rate...( compensation for inflation)
> 
> 
> Thats it....simple....one page tax returns...no complications...no nonsense
> 
> To eliminate under the table tax evasion....make the penalties so extreme, its not worth trying....eg, 10 times the taxes you would of owed if you get caught, and a lifetime of audits to look forward to.
> 
> Note that this includes federal AND provincial taxes...let them fight over how to divide it up.
> 
> I bet this would result in higher overall tax revenue for the govts, and would also stimulate the economy.
> 
> Any thoughts?


The rates would need to be higher. Also, this would benefit the lower and higher income earners, and hurt the middle class. My personal preference would be to put in some 'citizen's dividend' and get rid of the basic personal exemption, welfare, disability, social housing, etc.


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## uptoolate

New article in McLean's this week titled, 'Old and Loaded' with the cover's bold banner, 'OLD. RICH. SPOILED.' Discusses poverty rates, income, net worth, government subsidies and the like. Looks like it's time to get tough with the old folks!


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## Just a Guy

It is far easier to sit back and complain, than to get off your butt and work. Easier to blame the have's if your a have not.

I know plenty of non-boomers, non-wealthy background people who've done very well despite enormous hardship...but people don't want to hear about that...

It's the same with investing, everyone wants to buy something today and make money on it (real estate and the stock market come to mind), they want whatever they buy to work, and get grumpy when it doesn't...to find something good these days requires work, it's there, but much harder to find...people don't like that, they want easy.

For the most part, the people with money worked to get there, it wasn't easy...I know plenty of poor boomers as well...but we do t want to hear that either...

Spend half the energy you expend on complaining and envy on doing something and you'd probably be rich...

I've taught my kids how to work, how money works, and how to get money to work for you...I'm not to worried for them...their friends however, that's another story.


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## Pluto

This thread remind me of some demographic predictions I read some 15 years ago: when the boomers retire, unemployment drops like a rock. Makes sense to me. So the screwed generation might not be so screwed after all. Employers might be so desperate for workers that they practically throw job offers at them. Employers might actually pay for their training and education. 

If that unfolds as the demographers predicted, we'll have wage inflation. It look like the so called screwed generation can look forward to jobs, and higher wages. If so, that's their compensation for some government debt. 

Media like to tell horror stories to sell their product. This recent horror story of the younger folks getting screwed by the rich fat boomers is no exception. 

(Incidentally, this demographic painting of the future bears on the future of this bull market. As we know, low unemployment tends to be inflationary, and inflation is fought by higher interest rates. The latter implies lower stock valuations. So in the years that boomers are exiting the job market in droves, interest rates could be on average a lot higher than they are now. If that comes true, dividend yields would likely be higher as well.)


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## Just a Guy

Except, the same theory goes on to say that with the boomers getting out of the market, and into "safer" returns, the market will collapse...

The nice thing about stats and predictions is you can say whatever you want, and provide the proof...reality be damned.


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## Janus

kcowan said:


> You are talking about the NOW generation who have never waited for anything?


In-depth analysis there.

We don't tolerate waiting long for information, access, data... but guess what we will wait for, longer than any previous generation?

- buying a house
- getting married
- having kids
- entering meaningful careers

The above 4 are reflections of my generation's economic reality moreso than our values.


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## OhGreatGuru

_"Want a scary number? How about $1.5 trillion, the amount the C.D. Howe Institute estimates Canada’s rapidly aging boomers are going to cost Ottawa and the provinces in extra health and pension expenses over the next 50 years." 
_

OMG that’s $30B/year! Out of combined federal and provincial budgets of ~$608B in 2010-11! Almost 5%! The sky is falling!

So tell me, what share of tax revenues do you think all these baby boomers are going to be paying?


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## none

I thought this was quite good.

http://www.smbc-comics.com/?id=3474#comic


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## OhGreatGuru

OTOH:

*What the boomers are leaving their children*

Good public education (from which all these children have benefited).
Cheap (compared to most countries) post-secondary education (from which many of these children have benefited).
Public Health care; CPP, OAS, & GIS; EI. (To be fair it was really our parents who created these)
Cities that are still livable compared to our neighbour to the south.
One of the best standards of living in the world.


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## gibor365

_Cheap (compared to most countries) post-secondary education_Really?! Maybe comparing to US, but certainly not most countries


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## Mechanic

Nothing changes much from generation to generation. You get what you work for. Some people get an inheritance, some don't.


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## sags

Pluto said:


> This thread remind me of some demographic predictions I read some 15 years ago: when the boomers retire, unemployment drops like a rock. Makes sense to me. So the screwed generation might not be so screwed after all. *Employers might be so desperate for workers that they practically throw job offers at them. Employers might actually pay for their training and education. *


Which makes me wonder if that is why....... Temporary Work Programs, push back on raising the minimum wage, and "right to work" legislation are all of being promoted these days by some business lobby groups.

Increased productivity has eliminated a lot of jobs, and when boomers left their workplace, often their jobs left with them.

Where I worked.........there used to be 600 well paid jobs. Everyone retired as of this year. Today, there are less than 100 people working there as temp workers for near minimum wages. The rest of the work has been contracted out to other minimum wage locations.

From what I hear though......the place is in chaos much of the time. People don't bother to show up if they have nothing to lose.

Still..........there will be shortages of workers, and that should bring wages out of the doldrums.


----------



## realist

Pluto said:


> This thread remind me of some demographic predictions I read some 15 years ago: when the boomers retire, unemployment drops like a rock. Makes sense to me. So the screwed generation might not be so screwed after all. Employers might be so desperate for workers that they practically throw job offers at them. Employers might actually pay for their training and education.


Except there is a good chance that there will be an entire generation of workers with insufficient experience to replace the retirees. It will be interesting, that's for sure.


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## peterk

sags said:


> Increased productivity has eliminated a lot of jobs, and when boomers left their workplace, often their jobs left with them.
> 
> Where I worked.........there used to be 600 well paid jobs. Everyone retired as of this year. Today, there are less than 100 people working there as temp workers for near minimum wages. The rest of the work has been contracted out to other minimum wage locations.


I think this is what is to continue. Technology and efficiency has increased a lot faster than boomers have aged. I have a feeling there are a lot of positions in companies with highly paid 50-65 year olds where the company is just itching for them to retire so they can not replace them. Or at best, replace two with one 25 year old on contract getting paid less than half as much as a single senior guy.

Perhaps that will be a catalyst for increased profitability and a surge of the stock market though? An out with the old & expensive and in with the new & cheap....


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## sags

Years ago, a brake component supplier for GM relocated their production to China.

They moved the equipment, technology and trained the workers. It worked for a little while.

And then the "recalls" started, similar to what has recently happened with the "air bag" issues with Chinese suppliers.

The cost or replacing all those parts almost put the company out of business.......and they returned the production to Canada.

There was an interview with the manufacturer of all licensed hats for the pro sports teams. He was lamenting that he was closing his last 2 US based buildings, because the workers couldn't compete on wages. He was paying less than $3 per hat from China and selling them for $40 in North America.

His biggest problem he said, was ensuring that his design team gave the Chinese "exactly" what they wanted, because the Chinese would not alter from what they were given to produce........regardless of mistakes in lettering, colours, or logo design.

He recounted he had once sent an order for tens of thousands of hats, with the team name spelled wrong.........and tens of thousands of hats came back with the team name spelled wrong.

This is the kind of low cost, pump them out, labor environment that Canadians are competing with now.

How in the world do we compete with a place like China........with an infinite number of workers willing to sacrifice their health and lives, for a few dollars a day?

They can live on a few dollars a day......barely. They live in company dormitories, eat at company cafeterias, and are on call 24 hours a day. In Canada, we can't live on a few dollars a day.

When we down the free trade with China path........we sold out our future generations.

And unfortunately, baby boomers are 100% responsible for that.


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## fraser

Screwed??

I look at our 2 children and our many nieces and nephews. Three years out of university and my son is teaching high school. My daughter and her husband have a number of businesses in Ft. Mac. They decided on Ft. Mac because of the opportunities it presented. They did not know a soul when they first moved there. Now they love it and have started a family.

When I look at all of our many nieces and nephews two things stand out. 

Those that went on to obtain post secondary training-technical school or university have ALL moved along with their lives and have good jobs. And those who left the small Ontario towns where they grew up in order to secure good jobs are all doing well.

Those that finished high school, got no other training, and did not want to leave Mommy are all working dead end minimum wage jobs.

The nature of the economy has changed. It is still changing. Manufacturing will exist but enhanced productivity will mean far fewer shop floor jobs.

One thing remains constant. Those who are flexible, work hard, and work smart and who recognize and seize opportunity do well.
Not much different than when we were that age.


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## ashin1

This whole "our generation is screwed" notion seems kind of silly. 
For starters, I am a part of Generation Y (23 years old), and the majority of the people who say that their generation is screwed are the ones who have little ambition. They honestly don't know how to think big. That or they think that a good job will come to them. Truth of the matter is if you want to good career sacrifices have to be made. Now a days its rare to see people make sacrifices to to further their career. Lots of young people fail to recognize there is no such thing as easy money. In order to get that money you gotta work for it. Not just that but chances are you will have to place your self in areas where there is lots of open doors. so YES you will need to move away form your friends and put your self in an uncomfortable situation. 
If anything it easier to get jobs now a days with the internet. There is a ridiculous amount of information on the internet, opportunities online. 

Here's a typical complaint:
"school fees are sooooooo expensive how will i ever get out of debt"

Here's is the answer:
"there are many scholarships you can apply for online, you have nothing to loose by applying"
boom, thank you internet. its not impossible, my sister who is a pharmacist now has been able to accumulate over $30k in online bursaries. 
my girlfriend now has her first year of college paid off thanks to scholarships.


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## GoldStone

ashin1 said:


> "there are many scholarships you can apply for online, you have nothing to loose by applying"
> boom, thank you internet. its not impossible, my sister who is a pharmacist now has been able to accumulate over $30k in online bursaries.
> my girlfriend now has her first year of college paid off thanks to scholarships.


Do these bursaries/scholarships test for parents' income?

What's a typical family income threshold that disqualifies you?


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## Echo

Student loans test for parents' income, but student awards are based on other criteria like financial need, academic or athletic achievement, community involvement, ethnic background, etc. A large number of awards go unclaimed every year because students just don't bother to apply. https://ca.finance.yahoo.com/blogs/...arship-dollars-going-unclaimed-193114435.html


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## Jon_Snow

The "Screwed Generation"? Oh puh-lease.... this is coming from a Gen-X'er, offspring of boomers.


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## fraser

It's all about choices. It always has been. The options may change but the basics never have.


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## james4beach

The current generation has figured out how to drain the economy dry for their immediate benefit.

Especially during the 2008-2009 crisis... by bailing out all these institutions, government has burdened my generation with ever-lasting debt and obligations (i.e. higher taxes) just so the boomers didn't have to watch their accounts decline in value.

There's a chance we will now have economic stagnation in the west, and zero growth, until the day I die. Notice I don't say "until I retire" because there is no such thing as retirement any more, and no job security.

Thanks boomers! I can't wait to see the encore.


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## Just a Guy

The more I read this thread, the more it gets me thinking...a generation is considered 25 years...so, let's look back say, 4 generations ago...100 years. Let's look at life in the hottest economy today, Alberta.

100 years ago (around 1914), that generation had their land handed to them for free still...of course, they just got off a two week boat ride with basically everything they owned and had to make their way accross the country. If they were wealthy enough, they could use a train, but most of them had to go by horse (if they could afford it) or walk.

There was no electricity, paved roads, radio, computers, jobs, power tools, grocery stores, Starbucks, mcdonalds...

They were given a piece of dirt, covered in trees and told they had to clear a bunch of it every year or they'd lose it. There was no house, no heavy equipment, no hardwood floors, no appliances, no running water (unless it came with a stream). Winters in Alberta were the same as today, but there was no central heating, snow blowers, road plows...and kids were still expected to go to school...oh yes, did we forget that some of these people were then shipped off to a war and never came back? They never really retired, heck, there was no CPP, OAS, or anything...but it didn't really matter life expectancy was around 50.

Let's skip forward to the next generation (1939), the economy had collapse, there were still no jobs, farming was in the midst of the great dust bowl. Electricity, and paved roads still hadn't been introduced, but this generation would see the massive changes it's introduction would bring...imagine the culture shock of going from subsistence living to what is very close to the modern age...of course this generation also faced it's own war, and many did no live to enjoy the benefits...or the difficulties...

In looking at this, I really begin to wonder, out of the last 4 generations, which ones were truly "screwed"... I know I'm thankful I'm living in this time period...so are my kids.

Oh, and let's not forget "modern medicine" which consisted of cut it off and hope they live...no sulpha drugs, no anti-biotics, but the survival rate of childbirth (for both parties was only about 50/50)...


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## Nemo2

^ I have read true accounts of pioneers on the Prairies/Great Plains, where, out of sheer despair due to the loneliness/isolation and almost never changing scenery, farm wives (who were often left alone for extended periods) hanged themselves from well handles (because there were no trees).......one woman, whose only companion was a canary, killed herself when the bird died.

Life was not easy for these people.


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## Just a Guy

Generation 2 back (1964) my first house was built between these two generations (1950's), my neighbour was an original owner. That 900 square foot, two bedroom house had three kids raised in it during this time...average sized house today is well over double...I don't think they build anything this small anymore. The cost ranged from 10-13000. The family owned one car, didn't have a tv until well into the 60's, didn't eat out a lot, never paid for Starbucks...and basically ate simple foods cooked at home. She still had the original appliances in her house when I met her, as well as basically the same furniture.

Yet we wonder why we need two incomes today...us, with are three cars, two drivers 6 bedroom (2 kids) houses loaded with new designer furniture every few years...it just doesn't make sense...life is so unfair.

This was, of course, the generation where the kids thought that traditional upbringing was too restrictive, they knew a better, freer way...peace, love, drugs... Where the idea everything should be free, the moment enjoyed, probably the start of our modern problems...


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## Just a Guy

One generation ago (1989), Alberta was still suffering the effects of the NEP, mortgage rates were double digit, having hit highs of 21% (and people complain about housing prices today, imagine paying the price of your house every 5 years in interest payments). Students faced no jobs, in fact they had industry say "we're not hiring, we have no plans on hiring, and I may be laid off next week".

Yes, today's generation is truly screwed...may as well pack it in and give up.


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## james4beach

These comparisons to past periods completely ignore the magnitude of the amounts of money (whether stated in real dollars or percent of GDP or whatever) that has been borrowed from the future.

This isn't like a century ago or a couple decades ago. Presently we have a situation of the current generation in power -- boomers -- literally cashing out the wealth of about 100 years of prosperity and keeping it for themselves.

The theft from the future generations is tremendous. The boomers are hoarding all the pension money and will leave behind nothing. Add in the amounts stolen from the future via the Federal Reserve, ECB, Bank of Canada, CMHC, etc and it will probably take about 100 years to "recover" from the devastation of the boomers


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## Just a Guy

So, if the government instituted an "inheritance tax" and used it to pay off these future obligations, would you scream bloody murder over not inheriting the money you assume is rightfully yours?

The boomer are slated to do the largest transfer of wealth in history as they die out...my bet is no one wants to give it back to pay off the "stolen" money...


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## peterk

Just a Guy said:


> The boomer are slated to do the largest transfer of wealth in history as they die out...


Perhaps... but not for another 2-4 decades...Not before the OAS cheques and healthcare bills plunder the shrinking tax base and prevent infrastructure, education, and other "youthful" spending.


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## fatcat

james4beach said:


> These comparisons to past periods completely ignore the magnitude of the amounts of money (whether stated in real dollars or percent of GDP or whatever) that has been borrowed from the future.
> 
> This isn't like a century ago or a couple decades ago. Presently we have a situation of the current generation in power -- boomers -- literally cashing out the wealth of about 100 years of prosperity and keeping it for themselves.
> 
> The theft from the future generations is tremendous. The boomers are hoarding all the pension money and will leave behind nothing. Add in the amounts stolen from the future via the Federal Reserve, ECB, Bank of Canada, CMHC, etc and it will probably take about 100 years to "recover" from the devastation of the boomers


what a load of crap 

i am a boomer and even if live to a reasonably ripe old age i don't have that many good years left
boomers are about to start a monumental movement of assets to younger people

we may see real estate prices come down as boomers retire and start to die

and we may not see the health care costs that many predict since boomers tend to be taking much better care of themselves than their parents, just about boomer i know is wanting to see a death with dignity act

you know nothing about history james, every generation of the last 200 years has faced challenges as well as opportunity

the 20 and 30 somethings have a very exciting world ahead of them and their biggest problem might be figuring out what to do as they all regularly begin to live to 110 or more


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## ashin1

Fatcat:
my problem is that I want to purchase the iphone6 but don't want to terminate my current contract.....

jokes aside, we as gen y have it soooo damn good.


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## 6811

peterk said:


> Perhaps... but not for another 2-4 decades...Not before the OAS cheques and healthcare bills plunder the shrinking tax base and prevent infrastructure, education, and other "youthful" spending.


I don't mean to contradict but IMHO the wealth transfer is already happening. Over the last five to ten years this boomer has contributed down payments on my kid's mortgages they might not otherwise have been eligible for, picked up the full tab for university so that no one's stuck with student loans, and assisted significantly on a few other important financial matters. If I can do this with my comparative modest wealth then I'm sure it's pretty widespread.


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## peterk

^ Indeed. And I'm sure that will help immensely to us younger generations.

But there still is the looming issue of who will provide the tax money when the boomers retire. (Yes, they will still keep paying taxes, but on pensions that are obviously smaller than their employment income) plus start drawing on OAS and healthcare in a big way. Let's hope the boomers stay in good health for all our sakes though.

Personally I am doing very well financially, but I know many many who aren't. It's all fun and games in our twenties, but when a great number of youth never get a career launched and are still working 35hours/week for minimum wage + $2 into their 30s and 40s the economy and quality of life of our country is going to be in a world of hurt.


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## Jaberwock

I'd be very happy to be in the screwed generation if I could only be 30 again


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## Nemo2

Jaberwock said:


> I'd be very happy to be in the screwed generation if I could only be 30 again


We've often said that, if we could be 20 again, we'd walk away from everything with just the clothes we're wearing.


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## fatcat

Nemo2 said:


> We've often said that, if we could be 20 again, we'd walk away from everything with just the clothes we're wearing.


ditto, even in todays world with all the challenges that are being faced

the next 100 years will be a time of spectacular change to witness, huge amounts of wealth will be created and it _better_ be distributed more fairly or there will be a very ugly mess to follow

every generation thinks the generation before them had it better and the one following them are in big trouble and too stupid to know what to do and this is always a false assumption


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## sags

There will be lots of changes ahead for future generations.

I am not sure all of them are positive changes though.

The Horizon oil spill............was never truly "cleaned up". Chemicals were developed and used that made the oil clump together and sink to the bottom. All the environmental damage is hidden from view.........but it is still there and has created massive dead zones......devoid of oxygen and life.

The Fukishima nuclear plant still continues to spew radiation into ground water, that is currently being pumped and stored into a growing number of containers. There is no plan on how many containers will be needed...........just continue building and filling them with radioactive water.

Chernobyl stills burns away.

When the Malaysian flight disappeared near Australia....the search revealed how full of garbage the ocean is.......even in a remote area.

We are fracking.........without any concern for the long term effects to water tables, at a time when droughts threaten life in the US.

Alberta continues to destroy ancient boreal forests, which end up as growing toxic tailing ponds.

The baby boomer generation will leave a lot of legacy costs for the next generation to deal with.

They are legacy costs that past generations......... "didn't" leave to the next generation.


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## uptoolate

Originally Posted by Jaberwock 

I'd be very happy to be in the screwed generation if I could only be 30 again



Nemo2 said:


> We've often said that, if we could be 20 again, we'd walk away from everything with just the clothes we're wearing.


Anyone in the younger generations who really think 'Oh woe is me' should take a few moments to reflect on these sentiments. I was just becoming aware of things like the economy and world events in the early 70s and watched the challenges faced by my parents through the recessions of the 70s and early 80s and the effect of sky high inflation and contracting labour forces. The generation before theirs faced the depression and WW2 and the one before that WW1 and the one before that immigrating and pioneering. There are always tough times and challenges but often as we gain the wisdom of age we realize that those were the good old days. Just as these are. Sometimes youth is wasted on the young. Carpe diem. The best is yet to come. What many of us wouldn't give to see it.


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## Jon_Snow

Uptoolate, that was a great post. Much better than then angst ridden whine fest that was threatening to break out.


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## Eclectic12

sags said:


> ....The baby boomer generation will leave a lot of legacy costs for the next generation to deal with.
> They are legacy costs that past generations......... "didn't" leave to the next generation.


Odd ... history is littered with examples of the previous generation leaving legacy costs for the future.

So the clear cutter lumber barons didn't leave swaths of denuded land?

The buffalo weren't decimated?

Two rounds of World War didn't cause any environmental damage, leave anything toxic or live munitions killing people almost a hundred years later?

GM, noting in 1921 that 90% of public trips were on rail, chiefly electric rail - setup a group that used various means including threatening to divert lucrative automobile freight to rival carriers, they persuaded the railroad (according to GM's own files) to convert its electric street cars to motor buses -- slow, cramped, foul-smelling vehicles whose inferior performance invariable led riders to purchase automobiles... GM admitted, in court documents, that by the mid-1950s, its agents had canvassed more than 1,000 electric railways and that, of these, they had motorized 90 percent, more than 900 systems... with no impact on future generations?

The corporations from the 1890s and 1920s cleaned up anything toxic they had?


Cheers

*PS*

The Vimy Ridge memorial in France uses sheep to mow the grass as it's too dangerous for humans ... never mind that between two and seven unexploded mines that are 10 tonnes each are still there or the chlorine gas shell that weren't handled properly which killed the two who found it.


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## fatcat

Eclectic12 said:


> Odd ... history is littered with examples of the previous generation leaving legacy costs for the future.
> 
> So the clear cutter lumber barons didn't leave swaths of denuded land?
> 
> The buffalo weren't decimated?
> 
> Two rounds of World War didn't cause any environmental damage, leave anything toxic or live munitions killing people almost a hundred years later?
> 
> GM, noting in 1921 that 90% of public trips were on rail, chiefly electric rail - setup a group that used various means including threatening to divert lucrative automobile freight to rival carriers, they persuaded the railroad (according to GM's own files) to convert its electric street cars to motor buses -- slow, cramped, foul-smelling vehicles whose inferior performance invariable led riders to purchase automobiles... GM admitted, in court documents, that by the mid-1950s, its agents had canvassed more than 1,000 electric railways and that, of these, they had motorized 90 percent, more than 900 systems... with no impact on future generations?
> 
> The corporations from the 1890s and 1920s cleaned up anything toxic they had?
> 
> 
> Cheers


precisely ... to lay all the ills of the world at the feet of greedy boomers, most of whom will have little more than pensions and government checks to live off of is just plain false

what about slavery that ended 150 years ago, we still suffer from the legacy of that in the usa ?

human beings haven't changed much since the time of the romans, we are greedy and stupid and wise and generous at the same time


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## Just a Guy

Don't forget the reason why oil rigs were known as gushers...

Or, if we go back far enough, why the golden crescent of the Middle East, once the most fertile places in ancient sumeria is now a desert wasteland...


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## sags

We have always created environmental problems, but the magnitude of the problems we create today are beyond our ability to cope with them.

If somehow future generations figure out what the solutions are..........it is still going to very expensive to implement them.


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## peterk

sags said:


> We have always created environmental problems, but the magnitude of the problems we create today are beyond our ability to cope with them.
> 
> If somehow future generations figure out what the solutions are..........it is still going to very expensive to implement them.



Most industrial methods today are far far safer and better for the environment than the free for all burning and dumping of any chemicals known to man, in the past.

If cutting down "ancient" boreal forest to build tailings dams is our biggest concern I think we're doing pretty darn good.


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## Eclectic12

james4beach said:


> The current generation has figured out how to drain the economy dry for their immediate benefit.
> 
> Especially during the 2008-2009 crisis...


Good to know that no boomers were laid off before or during the 2008-2009 crisis.
I'm guessing this also implies they didn't have executives plunder their corporate pension to pay executive salaries & benefits, which after bankruptcy when the pension ran dry - wasn't a required repayment.




james4beach said:


> ... by bailing out all these institutions, government has burdened my generation with ever-lasting debt and obligations (i.e. higher taxes) just so the boomers didn't have to watch their accounts decline in value.


Good to know that boomers aren't subject to the higher taxes, especially those whose pensions disappeared or were redefined to up the contributions as well as the reductions for taking an early pension ...




james4beach said:


> Thanks boomers! I can't wait to see the encore.


I'd say you were welcome ... but I don't recall making any of these decisions and certainly didn't benefit in the ways you think I did.


BTW - should I feel screwed for paying decades of educational taxes but have no children to make use of the educational system?
Or should I consider it an investment in Canada's future?


Cheers


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## Eclectic12

Just a Guy said:


> So, if the government instituted an "inheritance tax" and used it to pay off these future obligations, would you scream bloody murder over not inheriting the money you assume is rightfully yours?


I would suspect so ... based on some of the comments.




Just a Guy said:


> The boomer are slated to do the largest transfer of wealth in history as they die out...


Won't the after death tax return basically work out to an inheritance tax?

It pretty much forces the after death tax return to be at much higher tax levels than any of the living years. 

Since the boomers are allegedly draining everything from the economy to pensions, the estate should have a bundle to be taxed right back into gov't hands.

Of course I make no guarantees the gov't of the day won't decide on other priorities than debt or won't have it disappear.







peterk said:


> Perhaps... but not for another 2-4 decades...Not before the OAS cheques and healthcare bills plunder the shrinking tax base and prevent infrastructure, education, and other "youthful" spending.


Odd ... the boomer I know who feel comfortable are giving money to their kids/grand kids to pass some one before the big estate tax bill hits after death.


Cheers


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## Just a Guy

Right now canada doesn't have a death tax and, with proper planning much of the boomers "ill gotten gains" could be passed onto the next generation pretty much tax free if they wanted to...

Perhaps the government should close that loophole, after all the beneficiaries shouldn't benefit as they didn't work for it and morally they feel it was wrongly acquired. 

When you die, all your estate should revert to the state...I'm sure the younger generation, in power at that time, will use it in a much more ethical way and reduce the burden on their children...

Then again, I do read fantasy...


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## fraser

Same old, same old.

Some people see the glass half empty, others see it half full.

Some people see problems, others see challenges and opportunity.

We all get to pick which of the two we gear our life towards.


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## gt_23

I don't see what insights can come out of comparing Gen Y to previous generations - the context and circumstances are too different.

I also don't think that the value of hard work has somehow vanished, as some have implied, however, I do think that the rewards and outcomes that can be achieved with hard work alone have dimished.

Finally, when I think of what the boomers have "left" my generation, I don't think of a crappy economy, poor job prospects, and de-valuation of the hard work effect, those things are all cyclical and can be turned around with a little patience and discipline. Rather, I think of the accumulated deficits from their years of excess, including everything from the fiscal deficits (and accumulated Gov't debts), deferrred maintenance on public infrastructure, underfunded social transfer programs and pensions, and lack of continuous capital investment in infrastructure. I've always found it peculiar that on a household basis, parents will do almost anything for their children and grandchildren (and make the necessary sacrificies to set them up to succeed in life), but on an aggregate basis, they continue to sell them out over and over again.

It's one thing to be young and begin your life with absolutely nothing to your name other than a desire to work hard and succeed (as my grandfather did), but it's an entirely different proposition to begin your adult life in a deficit situation, both on an individual and national level.


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## donald

I don't think it's the boomers fault but i do think gen Y has got it harder(don't know how one could see it any other way.(magnifying it is how 'equally hard the war generations had it)
gen y-unions/pensions etc declining
-advanced education required for entry level jobs
-cost of education
-wealth gap widening
-Global economy(competition from oversea's in all sectors
-Housing prices
hollowing out of middle class
-9/11
-the great recession

Moral decay:marriage on the decline/blended families
Just a few things off the top of my mind we are dealing with(heavy issues)
Boomers as far as the economy went caught the greatest economy in the last century(industrial age)where a one income family could live a middle class life
The 70's sure seemed like a breeze comparing-it was the happy hippie era-what were the problems faced in the 60's or 70's that come close to today?


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## james4beach

fatcat said:


> boomers are about to start a monumental movement of assets to younger people


From what I've seen, boomers barely have the net worth to make it through retirement. As I recall median net worth of boomers is something like 100k to 150k, including real estate. Don't be silly... there will be no assets to transfer to the next generation.

CBC radio is running this story at this very moment while I type: "Most Canadians live paycheque to paycheque. 51% admit they live paycheque to paycheque in that if their paycheque was just 1 week late, they'd be in trouble"

The next generation (my group) is neither privileged, coddled, nor well off. We don't have any job stability. We have no savings. There is no affordable housing; we just get constantly inflated real estate prices thanks to central bank policy and CMHC.

The side effect of the inflated real estate is carried on the public balance sheet (notably CMHC). That's my burden, * I * get to suffer unaffordable real estate * and * suffer the long-term consequences to keep Canadian RE propped up for boomers' benefit today.

The inflated asset (notably housing) situation going on for the last 10 - 20 years is entirely for boomer benefit. All the detrimental consequences fall on young people and we don't get any of the benefits.


----------



## sags

The 1970s were carefree days of plenty of places to work, requiring little education and paying good salaries.

They were "jobs for life" in those days. Good pay, good benefits, good pensions,......mostly unionized ........and all good.

Everybody I knew from friends and school............had a good job somewhere, regardless of what they did in school.

Coke, Labatts, GM, Ford, 3M, Kelloggs, Emco, Firestone, Hospitals, the City, Public service.......lots and lots of jobs that paid well.

We Boomers............we had it pretty darn good........


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## james4beach

Eclectic12 said:


> Good to know that no boomers were laid off before or during the 2008-2009 crisis.
> I'm guessing this also implies they didn't have executives plunder their corporate pension to pay executive salaries & benefits, which after bankruptcy when the pension ran dry - wasn't a required repayment.


True, some boomers lost their jobs and had their pensions disintegrate. We all suffered.



> I'd say you were welcome ... but I don't recall making any of these decisions and certainly didn't benefit in the ways you think I did.


You benefitted tremendously from the government actions to keep assets propped up, notably the CMHC to inflate housing.

YOU benefit from that; I don't. I get all the negative consequences of it.

Governments and central banks have been tripping over themselves since 2008 to prop up stocks, bonds, and real estate. *They saved you*. But all of this intervention builds up liabilities on the public balance sheet, and I'm the one who will pay for that.


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## Just a Guy

Talk of the good times of the 70's...what about the mid 90's (how quickly people forget)...the late 80's early 90's there were no jobs anywhere...layoffs were common, no job security...but a few years later, by 93 as I recall, company execs would drive through McDonalds restaurants and hire the guy taking their order up in ft. McMurray. It wasn't just in the fort, I remember companies being interviewed by prospective employees to see if they would work for the company, not the company interviewing the candidate like it normally works...some of these people couldn't even write their name without making a mistake, but they were in demand...this went on for nearly a decade.

You talk about unaffordable housing, but the houses you want are huge...your money is basically free...

Compare apples to apples people. Plug in a 100k house at an average interest rate of 14% over 25 years and see just how "affordable" housing was compared to a 350k house at 3.5% over the same period.

Remember too, no one today is stuck with the bill...you could always move away if life here us too tough, there are countries out there with no debt...no services that you feel entitled to either of course...where you could start anew.

As for not benefitting, do you forget that you benefitted from health care, subsidized education, a high standard of living, etc. you probably grew up with more toys, more expensive toys, more clothes, better, more varied food, than any previous generation.

The previous generation had TVs with 13 channels, half of which didn't work, and I believe the screen was 20 inches (that was a BIG one). The remote consisted of getting off the couch and walking. No DVD, digital downloads...and most of this was bought...here's the kicker...when they had the money to buy it. No one used credit, or could even qualify for a credit card.

The wealth gap widens when people live for today, with no plan for the future. I didn't come from wealth, I made it myself...over time.

I'm not a must have it now kind of person. I study history, even recent history, and I can see how EVERY generation has people who feel slighted, and how every previous generation had major issues to overcome.

People should read "the biography of the pill" to see what life was like for women up until the 60's....I bet you can't even comprehend their lives and how it changed.

We are the selfish ones on the planet, and we like to blame the others instead of admitting it.

As for moral decay, I don't see anyone forcing people not to get married...last time I looked, that was free choice. Look in the mirror for the one to blame.

Until the Polaroid camera came out, you couldn't take nude selfies, pictures took a week to get back, and you couldn't send them in...posting them public ally also wasn't done.

This generation was given the ability, and then chose to be stupid. I suppose their parents were to blame for inventing the technology...curse you Philip Kahn.


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## lonewolf

The screwed generation can continue to sleep in to well past noon & show up to work when they feel like it. There is not much for them to do the roads, bridges, hospitals, factories infrastructure has been built they can text on their cell phones most of the day. There will be all kinds of houses coming to market as the boomers move to old folks homes that can be bought for pennies on the dollar. I do not see the next generation having been screwed by the baby boomers.


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## fatcat

james4beach said:


> From what I've seen, boomers barely have the net worth to make it through retirement.


and so just exactly how are they screwing the following generation if they can't even afford retirement and are living from week to week ?


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## Mechanic

It costs a lot more to live today, I agree. I can't even comprehend having our cell phone bills, internet bill, satellite TV, multiple vehicles, etc etc that we have today if I went back to my decent paying job in 1981 that paid $11 and then $13 per hour. Then again with our mortgage at 21.75% and 2 kids we had to prioritize a little differently. Thank goodness there was some overtime available and we had one old vehicle that ran. I would shake my head in disbelief, as time went on, when I would watch young people standing around at their workplace, texting and talking on cell phones, driving new vehicles, arranging lot's of nightlife and activities and complaining that they needed a raise so they could buy more "toys". Screwed generation ?


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## donald

do people really think the 80's were harder than today?
There are 48 million Americans on food stamps in the united states today!!!(and the majority are working)
every large cap company I follow and own for the matter has gutted there American labour and opted for oversea's and developing countries labour.
There is no way the 80's comes close to the era of globalization.
Gen y came to age basically right smack dap in the 08 great recession.


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## peterk

Just a Guy said:


> I'm not a must have it now kind of person.* I study history*, even recent history, and I can see how EVERY generation has people who feel slighted, and how every previous generation had major issues to overcome.
> 
> People should *read "the biography of the pill" to see what life was like for women up until the 60's....I bet you can't even comprehend their lives and how it changed.*
> 
> We are the selfish ones on the planet, and we like to blame the others instead of admitting it.
> 
> As for moral decay, *I don't see anyone forcing people not to get married...*last time I looked, that was free choice. Look in the mirror for the one to blame.
> 
> Until the Polaroid camera came out, *you couldn't take nude selfies*, pictures took a week to get back, and you couldn't send them in...posting them public ally also wasn't done.
> 
> This generation was given the ability, and then chose to be stupid. I suppose their parents were to blame for inventing the technology...curse you Philip Kahn.


Now let's put two and two together folks... :hopelessness:


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## Eclectic12

james4beach said:


> From what I've seen, boomers barely have the net worth to make it through retirement.
> As I recall median net worth of boomers is something like 100k to 150k, including real estate.


Then there's a disconnect ... or maybe you are remembering US based info?

Stats Can's latest review of Canadian families puts the net worth for *all* family units at $243,800, including RE.

Where the highest income earner in the family is between 55 to 64 years old in 2012 (sounds like boomers), the median net worth jumps to $533,600, more than double for the overall population.

Interestingly, the wealthiest 20% accounted for 67.4 per cent of the total national net worth, although that was slightly lower than the 69.2 per cent the top quintile possessed in 2005.

http://news.nationalpost.com/2014/0...y-says-as-net-worth-rises-sharply-since-2005/


Cheers


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## james4beach

fatcat said:


> and so just exactly how are they screwing the following generation if they can't even afford retirement and are living from week to week ?


A lot of government action is happening just to maintain the current situation and current asset values. Living paycheque to paycheque is the best case scenario and what we have now is the inflated scenario... this is the most that can be accomplished from all the stimulus and bailouts.

i.e. they threw everything they have at this mess, and people are still living paycheque to paycheque

Just to maintain status quo and current asset values, public debts (+ Bank of Canada balance sheet) has increased. All this CMHC growth, stimulus, and asset-pumping hurts future generations


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## james4beach

Eclectic12 said:


> Then there's a disconnect ... or maybe you are remembering US based info?
> 
> Stats Can's latest review of Canadian families puts the net worth for *all* family units at $243,800, including RE.
> 
> Where the highest income earner in the family is between 55 to 64 years old in 2012 (sounds like boomers), the median net worth jumps to $533,600, more than double for the overall population.


I wonder if the disconnect was that I was remembering an older number, and a per individual number vs family. Hmm.

I suppose that a family unit (let's say two people) with median net worth of 534k has a shot at surviving through retirement... that's 267k per individual... but I think most would still agree that a baby boomer will pretty easily blow through 267k in their remaining years.

I seriously doubt there will be anything left to hand off to offspring. Plug 267k into a retirement calculator and it will tell you that you're going to be living on cat food


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## sags

james4beach said:


> I wonder if the disconnect was that I was remembering an older number, and a per individual number vs family. Hmm.
> 
> I suppose that a family unit (let's say two people) with median net worth of 534k has a shot at surviving through retirement... that's 267k per individual... but I think most would still agree that a baby boomer will pretty easily blow through 267k in their remaining years.
> 
> I seriously doubt there will be anything left to hand off to offspring. Plug 267k into a retirement calculator and it will tell you that you're going to be living on cat food


It sounds like a lot ($540,000).....but includes real estate........so the house would have to go for a lot of people.

We retired 8 years ago, when I was 55 and my wife was 60. We already collected $460,000 from private pensions, and we have a lot of years ahead to pay for.....hopefully.

My wife has worked part time since she retired, and her earnings have crept up from $12,000 to $24,000 last year.

Add in early CPP benefits for both, and her OAS benefit............and it costs a lot of money to live.

I have no idea how people plan to retire on less than $50,000 per year at least.

We figure when she finally gives up her work..........we will have to watch our pennies at $65,000 per year.


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## Nemo2

sags said:


> ...we will have to watch our pennies at $65,000 per year.


Wow...you guys live high on the hog.......we've already been to Budapest/Paris this year, and next week we take off for Copenhagen on a month's cruise, ending up in Miami.....and still figure on coming in at around $50,000...which is an expensive year for us.


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## sags

Is that net or gross ?

When I retired, I didn't think much about income taxes. For some reason, I thought retirees were immune for them.........LOL.

Our income is all pension or employment income.........so it is all taxable at the current rates. 

Other than the age credit for my wife.........we get no special tax breaks.

I think...............we will have to make some adjustments................"Hello Rogers, we would like to cancel..........".


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## Nemo2

Net......just looked at our totals for the past 7 years, (Botswana trip not included...we classified that as a 'special expenditure'), and we've averaged around $36,500 p.a. This year will be the priciest.

But, no cable, no cell phones; we don't frequent restaurants, we used to make wine (at a wine store) and have a glass at dinner, but lost interest in drinking, so stopped; drive a 2005 Civic (don't have to spend much on maintenance/repairs)...like that.

A good portion of our income is from dividends, so there's a tax 'savings' there........OAS for me, partial CPP for both of us. No employment pensions for either.


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## fatcat

james4beach said:


> A lot of government action is happening just to maintain the current situation and current asset values. Living paycheque to paycheque is the best case scenario and what we have now is the inflated scenario... this is the most that can be accomplished from all the stimulus and bailouts.
> 
> i.e. they threw everything they have at this mess, and people are still living paycheque to paycheque
> 
> Just to maintain status quo and current asset values, public debts (+ Bank of Canada balance sheet) has increased. All this CMHC growth, stimulus, and asset-pumping hurts future generations


and so, if your scenario is correct (that scenario being that the fed and boc are inflating their way out of this to help the boomers) ...

just exactly how is this a conspiracy to benefit the boomers since there is one group of boomers barely making it off meagre pensions and another with say 267K saved who will "blow through 267K" (as you say above) because of inflation

boomers are the prime screwed generation in your scenario, whereas people in their 20-30-40's will have enough working time to pass though this coming new reality

you say something that makes zero sense (that boomers are screwing everyone) and then completely contradict yourself since clearly it will be boomers ... who can no longer work and must live off savings and pensions who will be the screwed generation

younger workers will benefit from both wage inflation and asset inflation

boomers are caught between a deflationary spiral which will eat their assets or an inflationary spiral which will eat their income

as a boomer i don't feel all that fat and happy


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## sags

Another recent report from one of the banks, showed that many people have nothing saved, and couldn't survive 2 weeks without a paycheque. Either the banks are making this stuff up.........or a lot of people are heading for financial trouble.

If the median net worth is $540,000........the people at the top must have a whole lot more than that in net wealth.........to bring the average up for all those who have nothing.

"I have 20 million dollars in net wealth", said the rich guy to his 19 employees. "So, WE together have an average net wealth of 1 million dollars each. Think about that".

The employees all smiled and said....."we feel a lot better now.......thanks".


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## NorthernRaven

Eclectic12 said:


> Stats Can's latest review of Canadian families puts the net worth for *all* family units at $243,800, including RE.
> 
> Where the highest income earner in the family is between 55 to 64 years old in 2012 (sounds like boomers), the median net worth jumps to $533,600, more than double for the overall population.


That's the StatsCan 2012 Survey of Financial Security (SFS). Be aware that this survey tries to include the value of employer pension plans (on a "termination"/commuted basis), so the net worth includes the current value of EPPs (not CPP/OAS, though). So the net worth numbers will be higher than something like the recent Environics Wealthscape estimates which were in the news recently, which don't include EPP (but include RRSP). If you are comparing yourself to SFS, include an estimate of the current value of any private pension plans you may be part of. 

For the 55-64 age group, here is a more complete set of net worth numbers (both median and average) from the SFS (you can do some custom reporting on StatsCan's site):

Single persons ("Unattached individuals"): Median = $177,400 Average = $424,700
Households (2 or more members): Median = $752,700 Average = $1,085,300
All Households (above 2 groups combined): Median = $533,600 Average = $861,900

The "single" group is going to have a much wider range of cases - probably a disproportionate share of unfortunates who have been on the economic or social margins, for instance. "Households" may be a more useful estimate for the types of people perusing these boards.

For retirement income, don't forget things like OAS and CPP. OAS is currently $6700 annually. It looks like the average CPP payment would be close to that as well. Or, assuming a retired couple with absolutely no other income, 2 x OAS + GIS would seem to come out at around $25K (or $16K for a single); GIS would be clawed back at 50% of other income.


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## NorthernRaven

sags said:


> Another recent report from one of the banks, showed that many people have nothing saved, and couldn't survive 2 weeks without a paycheque.
> 
> If the median is $540,000 in net wealth........the people at the top must have a whole lot more than that in net wealth.........to bring the average up for those that have nothing.


I'd assume the "nothing saved" group is all ages, and would include feckless young folks, or under-40 types with heavy child/family expenses, etc. The median $540K net worth was 55-64.

The SFS shows that for "non-pension financial assets", under-35 has a median $3100 (average $19000), 35-44 is $10K ($45K) and under-65 is $10K ($70K). That includes stocks/bonds/mutual funds/TFSA; the numbers for "deposits" are somewhat lower.


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## Nemo2

Is there any indication as to roughly what percentage of overall net worth is taken up by real estate?


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## Rusty O'Toole

So, you never got everything you ever wanted, handed to you on a silver plate, free gratis and for nothing, with whipped cream and a cherry on top.

Now you have to go to work. Whine whine whine whine. And live on what you can earn with your own strength and smarts, and stop sponging off mommy and daddy.

The tragedy of modern life.


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## Rusty O'Toole

Every generation thinks the one before screwed up and left the world in a mess. They are right.

The only difference is, this generation doesn't plan on doing anything about it.


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## Just a Guy

Has any generation had a plan rusty?

This probably Summs up the real problem really well...

http://youtu.be/-Na9-jV_OJI


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## NorthernRaven

Nemo2 said:


> Is there any indication as to roughly what percentage of overall net worth is taken up by real estate?


For the *55-64 age category*, 2+ person households, 86% of the households reported owning a "principal residence". For that 86%, the median worth of the asset was $300K (average $387K), and represented 28% of assets. 35% of the group reported a mortgage on the principal residence, median $113K, average $138K, representing 53% of debt. The 35% who had principal residence mortgages is up from 30% in the 2005 survey, FWIW. I did 2+ households as more generally interesting - singles report a principal residence at under 50%, and drag all households down to 72%. For those that have them, though, the percentage of their assets/debts is pretty similar.

There's also a category for "other real estate", which 28% of those 2+ families report owning - median worth $185K (8% of assets); 9% had mortgages on other real estate, median $130K, 18% of their debt.


The SFS reporting on CANSIM lets you report these components, but the values are for the percentage of the group that has that particular asset/debt component. So there's no way of recalculating medians excluding real estate, or pensions - you can't just subtract the component median from the overall median. It would be possible to recalculate averages with a little manual work, but averages are probably less interesting since you can't get detail age data in deciles or quintiles, and the rich people probably skew averages a fair bit.


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## Plugging Along

sags said:


> If the median net worth is $540,000........the people at the top must have a whole lot more than that in net wealth.........to bring the average up for all those who have nothing.
> 
> "I have 20 million dollars in net wealth", said the rich guy to his 19 employees. "So, WE together have an average net wealth of 1 million dollars each. Think about that".
> 
> The employees all smiled and said....."we feel a lot better now.......thanks".


Median is the middle number not the average (that is the mean). So in your example the 9 and 10 employee networth divided by two would have been the median. 

The mean is actually higher based on the stats.


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## Plugging Along

Here are my general thoughts....

The current generation always thinks that the previous generation screwed them or made mistakes, or are hard done

The previous generation thinks the current generation has it easier. BOTH are right. They both screwed up in some ways, and both had it easier in some ways, and other ways things were harder.


It is all about perspective. With change and technology things are gong to be different each year. I cannot think of a single major change in history that has not negative side effects to someone. 

The tricks is to learn to adapt and stop blaming others for your situation and do what you need to do for the environment and circumstance.

I have no idea what the future holds for my young kids. I don't know what may be good jobs or professions, or what will still be around. The best I can teach them is to be resilient, be flexible, resourceful, and alway see how they can make the best of the situation and not give up. 

I try to teach them to spend less time complaining about what they don't have, and figure what to do with what that have been given. They have so much more than what I had, however, they will challenges that I never had to deal then.


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## Nemo2

Thanks for the input/info NorthernRaven!


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## fraser

Sense of entitlement. Spoiled generation.

I think that this is why new Canadians and some first generation Canadians have an edge. They do not have that sense of entitlement. They come from countries not as well off as Canada and lacking in opportunities. 

They understand a very basic principle...work hard, work smart. Don't spend your energies moaning about how bad you think you have it. Move forward with your life and with the unbelievable opportunities that you can create for yourself. Put away those tissues!


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## Eclectic12

james4beach said:


> ... I suppose that a family unit (let's say two people) with median net worth of 534k has a shot at surviving through retirement... that's 267k per individual... but I think most would still agree that a baby boomer will pretty easily blow through 267k in their remaining years.


The Stat Can number includes a mix of sources ... including pensions. So to me at least, it's not clear without understanding the underlying numbers and assumptions.

My point is that more investigation is required as there are quite different viewpoint out there.




james4beach said:


> ... I seriously doubt there will be anything left to hand off to offspring. Plug 267k into a retirement calculator and it will tell you that you're going to be living on cat food


Question is what assumptions did the calculator make?
I can recall the first retirement calculator I used which spit out that to have a retirement somewhat close to employment income of $25K, I would need $6 million saved up so get cracking.


Then too, I started thinking about the inheritances that have been happening for my family and friends. Pre-Boomers have left money to boomers and their kids but supposedly the wave is just starting. As usual, there's conflicting views as to what effect it will have.



> .. Decima Research is saying almost a trillion dollars will be transferred from boomer seniors to their children over the decades to come.
> But financial advisers are not so sure...
> Decima says seniors and boomers have accumulated unprecedented levels of wealth that will be transferred to their children.


http://www.financialpost.com/story.html?id=67c88a26-66a6-4f6e-bcea-2c28ddb2629b&k=96203

So yet more conflicting information ... supposedly "there will be nothing to pass on" and yet Decima says there is "unprecedented levels of wealth" to be passed on. I'm sure YMMV for individuals based on what their parents do but the "nothing" scenario seems suspect as an across the board situation.


Another factor to consider is that despite the comment up thread that with proper planning much of the estate could be passed onto the next generation pretty much tax free - a lot of people aren't making use of it. I keep hearing from executors and seeing in the numbers from those estates I have been party to, the gov't getting a large slice of the estate. 


Then too, whether they be pre-Boomers or Boomers, most of those I've talked to who are retired have commented they need far less in retirement than when they were working, similar to Nemo2's comments.




sags said:


> Another recent report from one of the banks, showed that many people have nothing saved, and couldn't survive 2 weeks without a paycheque. Either the banks are making this stuff up.........or a lot of people are heading for financial trouble.


Or they are hiding in the details something that skews the numbers to what they want ... as I say - the first retirement calculator was spewing out alarmist numbers that seemed nuts at the time and have been proven nuts since then.




sags said:


> If the median net worth is $540,000........the people at the top must have a whole lot more than that in net wealth.........to bring the average up for all those who have nothing.


As I understand it, they are using the median as it *does not do this* as the mean (i.e. average) does.



> Median can play a major role in things like income level research as well, because a few millionaires may make it look like the socio-economic status of your sample is higher than it really is... But if your data has extreme scores (such as the difference between a millionaire and someone making 30,000 a year), you will need to look at median, because you’ll find a much more representative number for your sample.


http://blog.surveymethods.com/when-is-it-generally-better-to-use-median-over-mean/


Cheers


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## Eclectic12

Nemo2 said:


> Thanks for the input/info NorthernRaven!


+1 ... I know I wouldn't have the energy/time at the moment to dig these details out (truth be told, not that skilled at the custom reporting bit).


Cheers


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## sags

It's hard to equate the net wealth numbers, when a report like this comes out from the Canadian Payroll Association. 

_The Canadian Payroll Association says things are getting tougher for working Canadians.

The CPA, in its sixth annual survey of thousands of Canadian employees, says it found more are living paycheque to paycheque, most are saving less than they should and even more are falling further behind in meeting their retirement goals.

The association said the survey found that more than half of employees — 51 per cent — would find it difficult to meet their financial obligations if their paycheque were delayed by a single week. That was up from an average of 49 per cent over the past three years.

For those aged 18 to 29, the number is even higher — 63 per cent report living paycheque to paycheque.

Meanwhile, more than a quarter of respondents — 26 per cent — said they probably could not come up with $2,000 over the next month if an emergency expense arose.
_

http://www.ottawacitizen.com/busine...aycheque+paycheque+survey/10189535/story.html

It looks like beyond the value of their homes, a lot of Canadians don't have any wealth.


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## cashinstinct

Millenial talking: I don't consider I am screwed. To be screwed would mean, for me, that there was a "plan" to screw my generation and that I was sure to be worse off. I don't think it's the case.

Some things might be better in the future, some not. Depends of perspectives.

*Home prices*
I am ready to admit I had frustrations about current prices of homes (and they are not even that bad in Montreal area compared to other places in Canada).

I have colleagues at work, not even boomers... that bought their home around 10-12 years ago for really stupid prices (like $150k) and these are now worth 400k apparently... interest rates decreased and they bought their homes based on much higher interest rates.

I don't think I will have such chance... bought mine at 305k in 2012 and would be surprised that it will increase in 10 year horizon, especially if interest rates increase. I would have preferred being able to pay less for home and higher interest rate, to have the option to pay quicker and save, but might end up with house-priced-for-3%-interest when interest rates will be much higher too....

I would be much ahead if I was born about 10-15 years earlier ...

Some people have 2 homes. I have no idea how a millenal can have a home + cottage, while many colleagues at work older have that... since I don't want a 2nd home, not an issue for me... but cottages have increased SO MUCH in price, completely crazy...

*Estate*
No idea how much I will end up getting from my parents (divorced). Might end up with a significant amount, maybe not.

I cannot plan my life based on their current savings accumulated, considering they might have 30-40 years in retirement... no idea how much will be left.

It's their money, not mine.

*Job market*
Everything is ok for me in this regard, not the case for everyone of course... but cannot complain.


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## Eclectic12

sags said:


> It's hard to equate the net wealth numbers, when a report like this comes out from the Canadian Payroll Association...
> It looks like beyond the value of their homes, a lot of Canadians don't have any wealth.


At least the Stats Can report has details to try to sift through what's happening ... this one is vague.

For example, for those saving 3% and up (i.e. likely something over half - to use the articles terms) - it's going to take less than a year to save up enough to cover a delayed pay cheque. This suggests that misplaced priorities are the more important issue.

Then too, having witnesses willful ignorance where people have a DB pension, I'm also not sure how much I'd trust the reliability of those estimating needing up to $2 million to retire.


Definitely lots of concerns but not a lot of specifics to know how reliable the info is or how much it applies.


Cheers


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## NorthernRaven

sags said:


> It's hard to equate the net wealth numbers, when a report like this comes out from the Canadian Payroll Association.
> 
> The CPA, in its sixth annual survey of thousands of Canadian employees, says it found more are living paycheque to paycheque, most are saving less than they should and even more are falling further behind in meeting their retirement goals.
> 
> Meanwhile, more than a quarter of respondents — 26 per cent — said they probably could not come up with $2,000 over the next month if an emergency expense arose.
> 
> 
> It looks like beyond the value of their homes, a lot of Canadians don't have any wealth.


First, people here have (I thought) been talking about boomers, which is why I posted that SFS info for that 55-64 (about to retire) age group. Obviously, as you go younger wealth decreases. If you look at the SFS numbers, the lowest 20-30% at least have little or no wealth, and the fact that there is a middle group that has some doesn't mean that there isn't a group that is cash-poor. SFS shows that for under-65 households, the 90% that report a "deposit" account have a median of only $3000 (excludes TFSAs).

Also, for the CPA report (news release with methodological details, and media package), I'd be careful in going from "respondents" to "all Canadians", or even "all working Canadians". It is a "_convenience sample_" of 3200 employees "_asked to complete the research survey by members of the Canadian Payroll Association with whom they work_". So it isn't going to be weighted by age/income/whatever to represent the Canadian population or some employment subset, and while it is probably fine for examining general attitudes of Canadian employees, there's probably going to be a lot of unknown selection bias and whatnot if you try and compare it to something else in any great detail.


----------



## NorthernRaven

By the way, it looks like the Broadbent Institute has just released an analysis/report on the 2012 Survey of Financial Security. Presumably they've bought a special tabulation from StatsCan, as they are reporting on percentage of total Canadian wealth in deciles (10% groups) not the quintiles (20%) that StatsCan released. They also have some info that excludes pension values. They only give median amounts for a couple of deciles, but you could probably calculate averages by taking the total net worth from the survey and applying their percentages.


----------



## Eclectic12

NorthernRaven said:


> That's the StatsCan 2012 Survey of Financial Security (SFS).
> 
> Be aware that this survey tries to include the value of employer pension plans (on a "termination"/commuted basis), so the net worth includes the current value of EPPs (not CPP/OAS, though). So the net worth numbers will be higher than something like the recent Environics Wealthscape estimates which were in the news recently, which don't include EPP (but include RRSP) ...


So for the boomers that have a while to go before retirement, some of the pensions will be worth more (I'm thinking of those with DB pensions).




NorthernRaven said:


> If you are comparing yourself to SFS, include an estimate of the current value of any private pension plans you may be part of. ...


I wasn't comparing myself ... I was pointing out that the perception of the median net worth of boomer being $100K to $150K was substantially different than what Stats Can was reporting.




NorthernRaven said:


> First, people here have (I thought) been talking about boomers, ...


Yes ... and the impact on the next generation.

If I follow the posts correctly, this is another disconnect that raised doubt about the net worth numbers.
If most of those working are living pay cheque to pay cheque (including the boomers still working) - there can't be growth in net worth.

With vague numbers, a small sample etc, I'm not sure I'd trust it much drawing conclusions that apply across the board.


Cheers


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## Eclectic12

james4beach said:


> ... Governments and central banks have been tripping over themselves since 2008 to prop up stocks, bonds, and real estate. *They saved you*.


That's where YMMV ... if I assign 25 cents on the dollar to what I had in 2008, I could still pay off my mortgage.
The million dollar question is whether I'd lose my job ... because that's the only scenario that would require liquidating the investments.




james4beach said:


> ... YOU benefit from that; I don't. I get all the negative consequences of it.


I'm not so sure of that ... one of the challenges listed for the next generation is under employment/boomers hogging the jobs.

If there wasn't a bailout and that results in lots more people being let go as well as far more companies disappearing - is that going to help the employment situation? 




james4beach said:


> ... But all of this intervention builds up liabilities on the public balance sheet, and I'm the one who will pay for that.


Good to know that my taxes are frozen for the next decade plus while you are taking on the increases. :biggrin:

This seems too good to be true ... can I get it in writing?


Cheers


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## Eclectic12

sags said:


> It sounds like a lot ($540,000).....but includes real estate........so the house would have to go for a lot of people...
> We already collected $460,000 from private pensions, and we have a lot of years ahead to pay for.....hopefully.


The $533K includes pensions so there's no way to know how many will also collect pensions without selling other assets versus the rest.




sags said:


> I have no idea how people plan to retire on less than $50,000 per year at least.


And others I know are making $30K a year before retirement ....


Cheers


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## sags

_And others I know are making $30K a year before retirement ...._

It isn't my view, but some of the retirement thesis that have come out from conservative think tanks.......is that since the working poor can more easily replace their working poor income in retirement, through CPP, OAS, and GIS.........their retirement is secure.

It is kind of an odd way of looking at it, I think...........for people living on the margins of poverty, but those who convey the message, evidently believe it supports their argument there is no retirement crisis, and therefore no need to make any changes to CPP or create any new pension plans.

A "people who are working poor.......will be comfortable to be retired poor"...........kind of concept.


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## sags

What hasn't been discussed yet, are the changes to unemployment insurance that have taken place, and which meant a lot of laid off employees no longer qualify for employment benefits.

The Harper government is lowering EI premiums for small businesses..........which is a good thing, but no doubt is made possible by more stringent rules that have disqualified people and reduced the cost.

*The percentage of unemployed Canadians who receive EI dropped to 36.6 per cent in June, when only 501,900 of the country’s 1,369,500 unemployed qualified for benefits.
*
With more people working part time or seasonal jobs, fewer people are eligible for benefits....despite contributing into the program.

This is a wholesale change in philosophy of the function of the Employment Insurance program.....from the past.

The unemployed who don't qualify for employment benefits are now falling onto Provincial welfare programs.

The Employment Insurance program.......should be a stand alone program, and not subject to the political whims of any government. It isn't...........and was never meant to be..........a cash cow for governments to use to balance their books.

Imagine where the CPP fund would be today..........if governments could raid it to fund election promises.

http://www.theglobeandmail.com/news...ponse-to-sluggish-job-market/article20525892/


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## sags

Anyone remember the old Wintario broadcasts.........with Faye Dance and Fred Davis as a hosts ?

They used to broadcast every 2 weeks......and then each week, from a different location, showing the new arena, community center.......or other worthwhile project that was being built from Wintario lottery profits. 

Everybody felt good about that. Hardly a community wasn't improved with Wintario proceeds.

Where does all the money from all the different lotteries and legal casinos go today ?

Into that vast void of "general revenues"...........never to be seen again.

We should have learned a long time ago.........never let anything go into general revenues.

A failure by the boomers............to allow it to begin it's genesis during our time at the helm.

Any government that attempted to claim dedicated funds.........should have been dispatched forthwith and without regret.

http://en.wikipedia.org/wiki/Wintario


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## NorthernRaven

Eclectic12 said:


> So for the boomers that have a while to go before retirement, some of the pensions will be worth more (I'm thinking of those with DB pensions).


The current value of the pension credit would appreciate in the same way a person's investments would - if you were to take the commuted value of a particular pension credit 15 years before retirement, it would be less than if that same person were about to retire immediately (the fund has 15 years to grow the value of the credit). Also, the hypothetical boomer in question will still have a few more years of contributions, which will also make the value at retirement a larger number. 

There's nothing magic about DB vs DC pensions - both are a way of forcing you to save for retirement, although I guess the value of a DC plan is much more obvious. The DB case is selling you an eventual annuity lifetime income stream - and assuming the investment risks to provide it, which is the problem if unrealistic criteria are used. With a DC system the individual must make appropriate investment and eventual liquidation choices - fortunately, most Canadians are well educated in financial planning, and the financial industry designs and sells its products solely to provide the most appropriate and cost-effective portfolios for each individual... 



Eclectic12 said:


> If most of those working are living pay cheque to pay cheque (including the boomers still working) - there can't be growth in net worth.


Not necessarily - a household that is living paycheque to paycheque may be making mortgage payments, converting income into net worth via real estate instead of, say savings deposits. And if they are part of a pension plan, they are building up net worth that again isn't available in immediate liquid form.


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## OnlyMyOpinion

NorthernRaven said:


> - fortunately, most Canadians are well educated in financial planning, and the financial industry designs and sells its products solely to provide the most appropriate and cost-effective portfolios for each individual...


LOL. A potent combination no doubt. What's that Bobby McFerrin song we're all listening to? Oh yes, _"Don't worry, be happy."_
https://www.youtube.com/watch?v=d-diB65scQU&list=RDd-diB65scQU#t=0


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## peterk

sags said:


> Meanwhile, more than a quarter of respondents — 26 per cent — said they probably could not come up with $2,000 over the next month if an emergency expense arose.
> [/I]
> 
> http://www.ottawacitizen.com/busine...aycheque+paycheque+survey/10189535/story.html


More imporant I think is the answer to the question unasked of the 74% - Where would that $2000 come from? 

When asked whether or not someone can "come up with" $2000 how many that said yes actually meant: "sure I could put that on my Master card if I had to" or "I guess I could borrow some money from Dad in an emergency" or "yes I think my line of credit still has some room".... NOT "yes I have $2000 in my bank account that I'm saving just in case"


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## sags

Very true, as it is phrased that they could "probably" come up with the $2,000..........it doesn't sound like cash sitting in the bank.


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## Plugging Along

This was just on the news radio today. Apparently it was $2000 available in savings or cash that 27% didn't have. 

I was surprised the number was that low.


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## Eclectic12

NorthernRaven said:


> There's nothing magic about DB vs DC pensions - both are a way of forcing you to save for retirement, although I guess the value of a DC plan is much more obvious.
> 
> The DB case is selling you an eventual annuity lifetime income stream ...


That's as both types are lumped into one dollar figure, the idea that a boomer will easily blow through the net worth figure in retirement may not be the case. The DB pension being more like an annuity may in fact slow the draining.

Then too, most DC pensions I've been offered have a relatively high cost to the plan member, eating away at their return. The DC plan has far more opportunity for economy of scale and negotiating better rates. In some places I've worked where there is a strong investment team for the business, at almost no additional cost - the returns are being duplicated in the pension (where the company paid to find the investment for the company portfolio, there's almost no cost as the research has already been done).




NorthernRaven said:


> Not necessarily - a household that is living paycheque to paycheque may be making mortgage payments, converting income into net worth via real estate instead of, say savings deposits. And if they are part of a pension plan, they are building up net worth that again isn't available in immediate liquid form.


Yet another reason me to be leery of the conclusions some were drawing from limited info and a limited survey.


Cheers


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## Eclectic12

peterk said:


> More important I think is the answer to the question unasked of the 74% - Where would that $2000 come from? ...


I agree it's a good question. I doubt it's enough information to be confident that responding "it'll go on credit" is the problem.

I expect those saving 6% or more of their pay cheque won't have a problem using credit ... and using the detailed breakdown, this works out to 42% of respondents.

This percentage may be a low number as it includes the responses that they'd "prefer not to", "don't know" and "no response" for the savings question.


Then too, I suspect some of the 934 who report saving 1% to 5% of their pay cheque can also come up with $2K, even if it's not in cash at the moment.


Of course as has been pointed out, with a convenience sample of 3,211 asked to complete a survey - there's lots of room for variation.


Cheers


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