Millennial Avocado Toast Analysis: Permission To Splurge

Millennial Avocado Toast Analysis: Permission To Splurge

“When I was trying to buy my first home, I wasn’t buying smashed avocado for $19 and four coffees at $4 each,” Tim Gurner, an Australian property mogul told 60 Minutes.

“We’re at a point now where the expectations of younger people are very, very high,” Gruner said. “They want to eat out every day, they want to travel to Europe every year. The people that own homes today worked very, very hard for it, saved every dollar, did everything they could to get up the property investment ladder.”

Tim’s words have ignited a backlash from millennials who are offended someone would attack their eating desires. Eating expensive food is a sacred right! The nerve of this guy. Next thing you know, he’s going to dissuade people from buying $300 designer jeans when they already have a credit card balance.

As fate would have it, I just had a $10 bowl of guacamole the other day at Tacoliscious in the Marina district, after spending time doing some ceiling patch work on my rental house. All around me sat a bunch of young and fabulous looking folks who enjoyed the 78 degree San Francisco sunshine. Oh, how I wish I didn’t have a house to do work on. I could have gone straight to brunch!

Bottom line: If you’re a millennial who wants to spend $25 on the finest breakfast consisting of avocados, bacon and crumbled feta cheese, go for it! You don’t need to save for a house because you’re either living with your parents or your parents will eventually buy you one when they can’t stand you any longer. And if they don’t buy you anything, they’ll at least leave you their house when they die.

Millennial Avocado Analysis

I know some of you think I’m being a bit flippant, but living in NYC and SF over the past 18 years, I’ve seen with my own eyes how so many parents are supporting their adult children. Let me share with you some recent encounters and some statistics as to why it’s OK for the majority of you to spend aggressively while young and not save for my favorite wealth building asset class.

Neighbor One: Brendan is 27 years old and lives in the basement of his parent’s house across the street from me. He’s a nice guy who loves to go snowboarding every chance he can get. He told me he went up for a total of 45 days this winter because Tahoe had the most snow in decades. Right on brother!

Just last week he, his girlfriend and two friends got back from a three hour SF Giants game that started at 1:05pm. I was doing some final staining on my planter boxes when they pulled up. They were so happy to enjoy a great weekday victory while his parents were at work. He has a lot of free time because he bartends part-time. With living expenses close to zero, he doesn’t need to work a lot.

Neighbor Two: Jason, the then 22 year old who was living at home attending community college three years ago when I bought my current house is back to living at home after transferring to and graduating from UC Davis. When I asked his mother what he was doing when she sneakily entered my property to get a closer look at my new landscaping work, she said, “random things,” implying he was still looking for full-time work.

Meanwhile, Jason has invited two of his friends to live with him in his parent’s house. His parents no longer live in the house as they have another house up north. They just check-in every couple of weeks or so.

One of Jason’s housemates just bought a new Harley Davidson for about $10,000. He works at the grocery store down the hill. Jason himself has a racing bike and a sports car. Housemate #2, who works at Chipotle, drives a Ford Flex. Why ride the bus and get a full-time job when living costs are completely subsidized?

Neighbors Three, Four, Five, Six, Seven: All either live for free or inherited their houses. They’re all between 35 – 60 and really nice folks who don’t have full-time jobs. For more details, see: A Massive Generational Wealth Transfer Is Why Everything Will Be OK

House buying competition:What percentage of first time homebuyers get help from their parents in the form of a downpayment or total payment?” is a question I’ve asked about 25 real estate agents so far this year. Their answers range from 30% – 70%. Every agent said that parental help is extremely common. The media likes to demonize foreign buyers for making real estate more expensive for locals. But it’s really parents helping their children who make the bigger impact.

For example, the winning bid for the house that I had put an all cash offer for in April was from parents buying the house for their son. He graduated from college this year and is starting at Airbnb. I’m guessing the final sales price is $1.82M, or $321K over asking. Next time you go to an open house, ask the listing agent my same question.

Inheritance expectations: Personal Capital surveyed over 100,000 millennials who use their free app and they found the median amount a millennial expects to inherit is over $1,000,000. Although the inheritance may not come until later in life, if you think you have at least $1,000,000 coming to you, you’re not worrying about spending $20 bucks on glorious avocado toast. Instead, you’ll probably want a $12 mimosa to go along with it!

Who can blame a millennial for quitting a job only after a couple years if it’s not the perfect fit? No longer do young adults have to “take it and like it” as we older folks did when paying our dues. If there isn’t constant recognition from management and a clear accelerated career path, then it’s sayonara suckers.

See: No Wonder Why Millennials Don’t Give A Damn About Money!

Low housing expenses: A recent FS survey with over 2,600 respondents showed that 66% of you spend less than 20% of your gross income on housing. That’s fantastic. Meanwhile, a good 4% of you spend 0% of your gross income on housing because you either have financial support or rent out a portion of your house. With 70% of you doing so well, you might as well splurge on a $180 side of beluga caviar to top off your $12 mimosa and $20 toast. Housing cost is clearly not as big of a concern as the mass media makes it out to be.

Note: There is a poll embedded within this post, please visit the site to participate in this post's poll.

See: Housing Expense Guideline For Financial Independence

Live It Up Early Or Late, It’s All The Same

After the age of 34, I started living the millennial dream life because I had left Corporate America. After a little bit of writing in the morning, I’d play tennis for a couple hours and then have a boozy brunch with other unemployed friends. While I didn’t order $20 avocado toast, I did increase my spending on $25 chirashi bowls (assorted sashimi over rice). Afterwards, I’d give in to food coma and take an hour nap on my couch. Life was wonderful!

I got to know many 20-something and early 30-something year old folks who didn’t work full-time, seemed to love life, and lived at home with their parents. From the millennials with full-time jobs who I met while consulting at some of the fintech firms, I know of several who had parental assistance with downpayments on new property. Given that was back in 2013-2014, they’re now much wealthier because property prices have appreciated 20% – 40%.

Millennials are being completely rational by living their ideal lifestyles before they turn 40 because they CAN. With the internet allowing anybody to be untethered from a cubicle, freelance work has taken off and will surpass full-time employment within a decade. With wealthy parental safety nets, millennials are taking more risks by switching careers at the fastest pace in history. They’re also starting companies, taking more time off to travel, and spending more extravagantly.

Some are just plain envious of the millennial lifestyle, especially those who busted their butts to get to a level which millennials are already enjoying. I wish my parents had bought me a condo when I first moved to NYC in 1999. I wish my parents had bought me a house when I moved to San Francisco in 2001. If they did, I’d be so rich I could have turned into one of those Instagram playboys by age 30!

Though I wasn’t gifted any property, today I do have four properties which I can gift my children so they can live lives of leisure. Maybe they’ll even learn some responsibility as property managers and share some of the rental income with mom and dad. Damn, I wish I were my children!

Final point: Some of you might be wondering what about the importance of pride and independence. By giving an adult children everything, we may rob themselves of self-actualization. While yes, it’s extremely gratifying to achieve success on one’s own. Don’t be so sure that millennials aren’t living incredibly satisfying lives.

Here’s one millennial’s response that sums things up perfectly:

Sam, I didn’t have a choice when I was born or to whom I was born to. There are so many bad people in the world. If I don’t harm others, I feel I’m already way ahead of the game.


How To Get Your Parents To Pay For Everything As An Adult Child

How To Get Girls If You Live At Home With Mom And Dad

Any millennials out there want to share why they are offended by some random person in Australia who says you shouldn’t spend so much on avocados? Given there’s such a massive wealth transfer underway, isn’t it completely rational to live a life of leisure if you don’t have to work as hard to build your own wealth? Are older people simply jealous of the millennial lifestyle?

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