A Conversation With A Millennial

Yesterday, my neighbour’s son was over for a visit. He’s a twenty something living in Newmarket, ON and working in construction. He is doing quite well for himself and was recently chosen to be trained as a foreman. We started talking about how frustrated he was with the price of real estate in the Toronto area and how we was considering moving to Manitoba where the single family home that everyone wants was still affordable for a typical Canadian worker.

We also talked about how expensive things are in general from university tuition to food to cars and the difficulty young people have in finding traditional full time jobs.

His main argument was that Millennials were facing an unprecedented financial crunch on multiple fronts and this had never happened before in Canada. While I understand his frustration, I don’t think his view is entirely accurate.

I’m in my early 50’s and I’ve been paying attention to these sorts of issues for about 30 years. I’ve now been a part of 2 real estate booms and 1 crash. I paid university tuition in the late 80’s/early 90’s and have been buying household necessities and cars since then. I also was trying to find my first full time job in the early 90’s during an economic recession.

Looking back over these 30 years, I’ve gained some insight that puts the current conditions that millennials face into perspective. Let’s look at the typical big life decisions and expenses today compared to when I was in my early 20’s and facing the same situation as my young neighbour.

Real Estate

My parents moved to Markham Ontario in 1990. The house they bought was built in 1988, right at the tail end of the last great real estate boom in Southern Ontario. The builder (Great Gulf Homes) sold the house for $650,000 to its first owner (not my parents).

When you remove inflation, do you know how much this house has appreciated in value over the past 28 years? 14% or 0.5% per year (as a comparison, the S&P 500 total return, adjusted for inflation, was 628% or 7.32% per year in the same time period).

This house is almost as expensive today (it’s worth about $1.5 million) as it was in 1998. When you consider that mortgage rates today are about half what they were in 1998, your monthly (inflation adjusted) mortgage payment today would be less than it was in 1998.

So yes, housing is expensive but the baby boomers in the late 80`s faced the exact same issue as today. By the way, this house could have been purchased for under $400,000 in the late 90`s after the bubble burst, 39% less than its original selling price!


My brother’s first car was a 1992 Dodge Shadow. It came with automatic transmission and air conditioning and that’s about it. He paid $9,995 plus tax for this car in the early 90’s. At the time there was nothing cheaper on the market. If we factor in inflation, this same car would sell for $18,000 plus tax today.

So how does this compare with today? A similar sized car would be the Hyundai Accent, but that is where the similarities would end. The Accent today sells for about $15,000 but is much more comfortable, reliable, safe and feature rich. All this and $3,000 cheaper.

University Tuition

In my final year of university my tuition cost $1650. Factoring for inflation, similar tuition today would be $3500 today. Tuition is a lot more than $3500 (closer to $8000/year) so Millennials definitely have it tougher here. However, this doesn’t take into account the 30% discount available for lower income families in Ontario or the new program that begins in Ontario in 2017. Under this program, families with an income of less than $50,000 will pay no tuition.


This one is a bit tougher to compare. 24 years ago you probably didn’t need to be so well educated to find a good job. Manufacturing was a bigger part of the employment picture vs. today. However, I recently watched a program on TV  where the host traveled to Guelph Ontario to meet with community and business leaders. One main takeaway from the program was manufacturing jobs starting at $17/hour and free training were waiting for young people who were willing to work and learn.

Thinking back to the early 90’s, I have several friends who started off in temporary jobs that eventually turned into full time work. Canada was in the middle of a pretty brutal recession with unemployment rates reaching over 12%, which is a full 6% higher than today.

Many of us had the same worries as Millennials have today. Our parents were able to find good jobs without having to spend years in university or college. We weren’t sure if our degrees in psychology or political science would help us or leave us with debt and low paying jobs. There were concerns about Canada breaking up and the destruction of the world’s oceans and rain forests.

Despite these similarities, I will be willing to accept that things may be tougher for the “poorly educated” today, but that is about as far as I’d be willing to concede. Finding full time work has always been a challenge for young workers but I’m not sure it’s tougher now for well educated Millennials.

Cost of Food

This one is a no brainer. The cost of food as a percentage of disposable income has been declining since the 1960s. According to NPR, the total cost of food in 1992 was 12.5% of income. Today, it is below 10%. In 1960, people spent 18% of their income on food.


Computer technology is cheaper today. Same for car rentals, air travel, clothes, music and many other consumer goods. Other items like entertainment, health care (orthodontic care, eye glasses), home renovations may have increased in price in the past half century but many of these items are near luxury wants not needs.

It is because we have more disposable income and greater expectations that we are able to buy more of these high priced services that would have been unaffordable to many a generation ago. It is only our expectations of what we should be able to buy that have changed since I was a 20 year old.


Perhaps it is every young generation’s right to feel worried that they will not be able to have the same quality of life as their parents. If history is any guide, Millennials should eventually overcome this worry and fit in well to our consumer driven society. Perhaps things will be different this time, but those are pretty dangerous words to believe.

One last point: I heard Warren Buffett say he’d rather be a young man walking the streets of Paris with a few Euros in his pocket than an 80+ year old with a few billion dollars in the bank.