When I bought my previous home 10 years ago my 68 year old neighbor stopped by to say “hello.” He was the godfather of the block, having bought his building back in the early 70s. He gave me the inside scoop on all the neighbors, and one neighbor stood out in particular.
He said the house across the street was purchased a year before mine by a family who wanted some place for their son to live as he attended UC Hastings School Of Law. The purchase price? $1.45 million for a 2,100 square foot three bedroom, three bathroom house. The son would host at least one fraternity-like party every year, but other than that, the house was pretty tame. The son continued to live in the house after law school and now it looks like they might sell.
For 10 years, the son not only lived for free, but he probably made rental income as well thanks to his two roommates. His $120,000+ law school tuition was also probably full paid for by Bank of Mom and Dad and I’m not sure how he paid for his $60,000 Audi S4 unless you make a lot of money as a law student? If the house ever sells, I wouldn’t be surprised if he gets to keep the $1 million+ in profits.
It’s clear to me that my neighbor is going to be quite alright, even if he doesn’t work for the rest of his life. If you’re willing to accept so much assistance that’s beyond what you can afford, then why bother working at all? Just mooch off your parents forever!
My Other Neighbor
About two years ago my 32 year old next door neighbor came home in a brand new, $48,000 Toyota 4Runner Limited. I thought it was a quizzical purchase because the car couldn’t easily fit in his garage. I saw him struggle for five minutes just to get the beast in.
Even so, I was intrigued and wrote a post about it called, “Dealing With Money Envy” because I was jealous. He’s lived in his parent’s flat for the past 11 years since college while his parents lived in their other home in the South Bay. With the average SF rent for a two bedroom at $3,800 a month, of course he could afford a new 4Runner. He’s saved $400,000 in after-tax money by not paying rent for 11 years.
My neighbor is a nice fella who now works in real estate with his father. For 2.5 years he got to travel around the world in his 20s without holding down a job because he could. His mother would stop by and share with me how his son was having so much fun. Meanwhile, I worked my ass off all throughout my 20s just so I could be able to afford the house at age 27. His carefree lifestyle is what made me the most envious. The car was just an extra kick in the nuts.
When I was moving out he asked whether I’d like to sell my house to him (to the family really). If he could really afford my house at $1.7M, then his finances must be in great shape because valuations have gone a little nuts as you can see in this chart. Then in mid-2017, when I texted him to know I was considering selling my house to simplify life, he gave out an offer of $2.1M. It was a low ball offer because I believed the market value was at least $2.4M – $2.5M, but it just goes to show how much money his parents have to help him buy!
The Ren Min Bi (RMB) has a managed peg to the USD which currently stands at roughly RMB6.2:$1. The RMB has appreciated by a couple percentage points every year for the past decade and there are no signs of such appreciation abating. You know how I always write that everything is relative in finance? Well, the relativity of a massively depreciating Yen and a continued strengthening RMB has never become so apparent as it is today.
A weak Yen and a strong RMB pose a problem for China because Japan is its largest trading partner in the region at 7% of total exports. The largest export partners for China are the US at roughly 17%, the EU at 16%, and ASEAN at 10%. China has two main goals: 1) to ensure strong domestic economic growth to provide enough jobs for its 1.2 billion population which continuously migrates to urban centers from the countryside, and 2) to be taken seriously by the world. I cannot tell you how important respect is in eastern culture.
As a Communist country with millionaires and billionaires, managing social happiness is priority number one. Although an annual 7.7% GDP sounds wonderful compared to a 2% US GDP growth rate, such high levels of growth are necessary to prevent social unrest. Take what happened at the height of the Occupy Wall Street movement and multiply the anger by 100 to get an idea of the repercussions of a growing unemployed population that lives at home with their parents until marriage.
For two decades I’ve been managing my own money. It all started when I saved up $3,000 from 
It’s reflection time here at Financial Samurai. I’d like to go over some of the most visited posts by search, the most commented posts, as well as other posts I think are worth highlighting. I wrote over 200 articles in 2012, so there’s a lot to sort through!
Whoever said, “money can’t buy happiness” is either poor or wealthy beyond their wildest dreams. The incessant amount of studies by researchers trying to prove money can’t buy happiness is simply a result of the researcher’s own poverty or unhappiness. Because they are financially mediocre, researchers are trying to console themselves that it’s OK not being wealthy.