The generation stuck at home

I’ve been getting so many DMs about last week’s Valentine’s Day special – keep them coming, and share this with a friend who’d love it too! 💌

When I moved to London a few years ago, I earned £55,000 a year as a consultant at Bain. Despite having one of the most competitive jobs out of university and making 17% more than the average Londoner, I saved almost nothing. 

I lived a pretty normal life for someone in their 20s. I shared a decaying 4-bed flat in Camden with people I met online. It was infested with mice and someone blew up a car outside our house during my first week there. 🐭

How did this net out each month?

54% of my income went to basic necessities. After factoring in other normal expenses like dinners with friends, the pub, haircuts, and the occasional trip, I had nothing to show for my 60 to 65-hour workweek.

And I had it better than most. Still, I remember asking a colleague how anyone could possibly afford a house.

His answer? 

Family money. 👑

The few paths to homeownership

In the last two years, financial woes have dominated conversations with friends. Chief among them? How unaffordable housing has become.

If you’re in your 20s, you basically have three paths to owning a house.

Path 1: Live at home and slowly lose your mind for 5 to 10 years. This is the go-to option for many, with roughly one-third of 25 to 27-year-olds still living in their family homes, up from one-fifth two decades ago. 

Path 2: Game the system by working a high-paying (US-based) job while living remotely. This is really only an option for people working in tech. Or just work in private equity.

Path 3: Have rich (and generous) parents to fund your life. Among the small and shrinking population of young Brits who own homes (1 in 10), 57% received financial assistance in 2023 – the highest rate in 11 years.

If you don’t fit in one of the buckets above, you’re likely flirting with financial disaster – Gen Z renters now spend nearly 50% of their income on rent, far exceeding the 30% affordability threshold.

Honestly, it’s probably because we’re all getting budgeting advice from Instagram. 💰

The housing crisis will have a profound impact on society

I’m no economist, but if housing prices continue to outpace wage growth at this rate, I predict three things will happen.

👉 First, there will be enormous wealth inequality among Gen Z, driven by how much support they get from their parents through gifts or inheritance (if any). 

Over the next 20 years, baby boomers will hand over $84 trillion – mostly to their kids – which will be the greatest wealth transfer in history. Of that, Gen Z will inherit $11 trillion, and 1 in 2 of them are banking on that money for their retirement. 

But it won’t be distributed equally, so expect some catfights. And if you’re looking for ultra-fast career growth, consider estates law. 🧑‍⚖️