Thursday , June 24 2021

The millenarians earn more than their parents, but owe much more

Milenians make more money than previous generations in this demographic cohort, but they are also burdened with much more debt, even adapted to inflation, according to new data from Canada's Statistical Office, which confirms the long-awaited.

The data agency analyzes revenue, wealth, and debt levels for the different Canadian generations across time frames to see how they handle it, compared to others.

Among the main findings in the report are young people who are richer than previous generations and are at the same point in their lives.

For the purpose of this study, the Statistics Office of Canada considers that the millennia are between the ages of 25 and 34 in 2016. The agency then compared them with the same age group in 1999 (generation X) and young people in 1984 who are today's baby boomers.

The millennium cohort had an average household income after taxing $ 44,093 in 2016, according to the calculations of the Canada Statistical Office. This compares to $ 33,276 for gen-Xers and $ 33,350 for boomers of the same age. And these figures are corrected with inflation, which means it is a comparison between apples and apples.

But while their income was higher overall, their total debt burden was much higher for the last generation.

The cost of education is one of the reasons. Almost three-quarters of the millenniums are pursuing some higher education after high school, which is higher than just over half of the generators. And almost a quarter of them carry student debt in 2016, with an average of $ 12,000.

"This is equivalent to 14.8% and $ 9,675 for generations of X families of the same age in 1999," Statistical Canada said.

Financial adviser Jessica Murhouse says education has become a two-edged sword: it is seen as the key to wealth, but it also costs more to get – and as a result there is no guarantee of high paid work.

"While we are earning more money, we have to pay much more," says Millennium Expert Jessica Murhouse. (John Greenson / CBC News)

"When we grew up, they gave us a plan on how to be a successful adult based on what our parents did," she says, walking around the typical path of hard work in school so you can go to college, because that makes you so. to get a good job for a lifetime with a pension.

"But we did all these things and none of that works," she said. – The whole game has changed.

Household ownership is also seen as the key to generating wealth for millennia, and where the current generation is more indebted than the previous generation.

The average monthly home mortgage loan is $ 218,000 in 2016, according to Canada's statistics – more than 2.5 times the average annual income for a young family who owns a home this year.

For the previous generation, the typical mortgage of this age is $ 117,481. For the boomers it was $ 67,802 – just above the typical $ 64,800 tax income for a young family who owns a home.

"Higher values ​​for primary dwellings mainly explain the increase in net worth from one generation to the next, but they are also combined with more mortgage debt," said Canada.

Income inequities are also getting worse

The impact of housing prices on millennium wealth levels is so great that it causes wider than the usual bay within the same generation – between those who own their homes and those who do not.

Milenians aged 30 to 34, who have a home in 2016, averaged $ 261,900. Those who did not have a net worth of just $ 18,400. Only eight percent of thousands of tenant tenants had a net worth greater than the average net value of homeowners in the same age group.

The old rules for generating wealth do not work the way they are used to, "says Murhouse. (Shutterstock)

Not surprisingly, Millennials in Toronto and Vancouver are generally much richer than their peers in other parts of Canada, largely due to higher house prices among the few lucky people they have been able to buy.

That's why the millenniums are often said to have the financial sense of moving to smaller cities with cheaper real estate but Mooreau notes that these cities usually come with much lower wages and worse labor markets, which denies some of these theoretical benefits.

House prices are an important factor in increasing the income gap in the current generation. The poorest 25% of the Canadian millennia cost $ 9,500 in 2016, and the richest quarter of them cost $ 253,900.

A generation ago, this difference was much smaller – from $ 6,220 for the poorest gen-Xers to a net worth of $ 126,900 for the richest.

For Moore, the widening of the gap between the rich and the poor is one of the most interesting parts of the data.

"In this millennium, there is a lesser middle class, where we go because, although we earn more money, we have to pay much more."

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