I read that a lot, but I've never actually met anyone that does that. If by "consumption to match" they mean "have children", maybe, but otherwise, I don't know. All of my friends that are making good money are putting away significant sums.
Maybe it's a class thing? When you're middle class and you're making twice the average income, you're not immediately turning into a jet setter or by a sports car. If you live a middle class life, you have a whole extra income each month that just sits there.
How would you even know? People won't be telling you they're overstretching themselves. Or they've got huge credit card bills. Or got a ton of loans.
The other thing that's avoiding forcing these sort of problems into the light is low interest rates and a lack of a housing market bubble pop. In the UK they've used all sorts of tricks to make sure the housing market doesn't pop.
If those change, that brings out all the people who over-stretched themselves on things they couldn't really afford.
But it seems to be general policy around the world to penalize savers and reward spenders. That's good for growth, but could potentially cause some serious problems.
Good point about not knowing in general. I believe I know my friends well enough (and long enough) to be certain that they aren't constructing elaborate webs of lies to fool me, so their rising wealth is likely real - as I said, it's hard not to put money aside when you live a middle class live on a higher income. None of those I was talking about own property though, while many of those with children do.
I wouldn't put a house into the category I understood the parent comment to talk about: it's not consumption, it's an investment. Still, you're right that it's something you're committed to and that would make it hard to "just walk away" from a job.
Savers get punished, but so do those that buy insurance, until the day they need it, I suppose.
How is the biggest purchase of someone’s life not consumption? It’s can be both, although, I would argue the investment aspect of a house is minor and irrelevant since you always need somewhere to live.
The mortgage debt has to be serviced, and your kids have to go to the schools in the richest areas (aka best schools). Hence once you have kids, most are innately pushed to stretch themselves so their children have access to the best possible future.
In some markets, finding an appropriate rental at a good price is nearly impossible. So instead of renting, people get a mortgage. Which can be a very reasonable decision as long as the mortgage isn’t a crazily high multiple of your yearly income.
Middle-class people tend to buy the maximum amount of house they can afford. That sucks up the bulk of discretionary income. It also is one reason why home equity one of the bigger sources of savings for the middle class (that owns homes) and big source of nimbyish (since networth is tied to home value).
Maybe it's a class thing? When you're middle class and you're making twice the average income, you're not immediately turning into a jet setter or by a sports car. If you live a middle class life, you have a whole extra income each month that just sits there.