Why Gen Z buys matcha but not houses: the lipstick effect

Transcript

Ask a Gen Z kid why they'll spend $7 on a matcha but won't put that same money toward a house and they'll say it's just a treat, a little self care. They believe that but the real reason runs deeper than they realize. Deeper than the avocado toast lecture their parents keep repeating. In 2017, a property developer went on national TV and blamed an entire generation's housing crisis on smashed avocado and $4 coffees. He had it backwards because there's a name for what's actually happening. In 2001, the chairman of Estee Lauder noticed that in the depths of a recession, lipstick sales went up. He called it the lipstick effect. When the big purchase becomes impossible, people don't save the difference. They pour it into small luxuries that still feel like winning. Researchers confirmed the pattern in 2012 and the big purchase really is impossible. In 1985, a home costs three and a half times a year's income. Today it's over five, past 10 in San Francisco. Since 1980, house prices climbed 551%. Wages, 373%. If pay had kept pace with housing, the typical household would earn $115,000 a year. It earns $83,000. So run the math on the matcha. Quit it entirely, bank every cent, and you reach a down payment in about 38 years. By which point the house costs several times more. The matcha is $7. The gap is $32,000 a year. Here's what nobody says. The matcha isn't why they're broke. It's the only thing in the whole equation that actually pays off. The house gives them nothing today, maybe nothing ever. The matcha delivers every single morning. That's why an entire economy now runs on selling small dignities to a generation locked out of the large one. The latte was never the obstacle. It's the consolation prize. Priced and sold as the one luxury, they're still allowed to win. That's NIIK.invest. Next, who's actually getting rich off the house you'll never buy?

Transcribed automatically from the video, so small errors are possible.