The graph above is showing the value of the land/property and the general income for a person who start to work over a few decades. We can see that the average income for a person increase in a linear form while the same piece of land with same size increase in exponential form.Urbanization has attracted a lot of younger generation give up the living in country side to seek for higher pay in the big city. This cause the land in the city become scarce and increase dramatically over decades. However, as year goes by, the basic salary for fresh is not much different. Merely there's increment in our salary.
The land prices keep on increase. The value of money keep dropping due to inflation and the basic salary for employees hardly increase. This make the younger generation like me have to purchase a house at a higher value compare to my parents during their time. If the price of the real estate at the same location do not change, then your size of your house definitely change. Your parents may be purchasing a 1000 sq ft house at 80k. Now, 1000 sq ft at the same location, you might be paying up to 150k. In the other way, you maybe paying 80k for 700 sq ft only. This is definitely not a good sign. We are taking longer years and larger portion of our salary to pay the housing installments.
You might think that I am wrong. You still can get a 1000 sq ft house with 80k but do you think that the area is near to town or near to your work place? In the end, you are actually paying more in your transportation fee in order to reach your work place. This is a horrible truth that I can not accept yet still need to face it.
In future, your children might be even worse if this "crisis" keep going. Higher living cost, higher housing installment, merely increase in basic salary/income, lower value of money will definitely become the facts that all middle class and lower class have to face now and the future. If you can not bare it, then just work until you die; work until you next generation have to carry the burden to cover the debts you left for them. Thats the reality and truth which non foresee and take it into their consideration.
Note: This not only apply in real estate. Education and crude price in every aspect as well.
2 comments:
That's one ugly truth which we could not deny. Kudos for the good article, and your thought outside the box. Its good to realize now. I believe working to death and taking long to pay off housing loan sounds like be in a rat race, just like what Robert Kiyosaki says. That's why I think that merely working hard is plain dumb, we need to work smart look for more income through methods that need less time, such as investments. Of course, to invest, we need to do homework. Well, humans are dynamic. Just take for example the ozone thinning problem last time, now its not much of a big threat anymore. Although not all problems can be solved, and not all that is done can be undone, but I believe that this economy problem is something solvable.
True.. need to think smart and think out of the box. But somehow, people are reluctant to make the first move. People are lack of motivation. People are just being lazy and didn't want to make anything that would.. possible change either in good way or bad way.. but at least u get the taste of it. so.. People.. act soon.. do your homework.. and take this new experience by investing.. sigh.. I'm saying that all to myself. Help.. Help.. In US, I read a magazine which shows a study about young investor.. people out there have started to invest in the age of 16..in average la.. So people.. stop playing games and start investing.. the best way is to treat investing as a game... though you'll have to take it seriously.. cuz it's on you to play with your real money. Please motivate each other~ peace.
Post a Comment