And for Asian people in US, since most Asian couples are dual income, why do they have to be miser on everything (except housing and education)?
They buy bigger and more expensive houses, but a very small percentage of Asian people that I know own investment properties. It is a surprise given their income level. I think it is because most can’t tell the difference between expenses and investments.[/quote]
I think you got it wrong.
First it is not that people are misers or non-misers. It is that people see value in different things. Some people do not see any value is driving a BMW or in going out and spending 20 dollars on a dinner. They get much more enjoyment out of staying in a nice home and cooking a meal and sending their kids to a certain school. It is a matter of preference.
I repeat it is not like they are postponing consumption for some later date. They are already happy with their current level of consumption. Even if they had another 10 mln dollrs in the bank, they might live more or less the same life.
Secondly most people (Asians and Indians included) like to show off a little bit to get some recognition from their peers – to say that they have arrived. For someone raised in the USA that means buying a a luxary car or going to Tahiti for a vacation or taking friends to that place where drinks are going for 50 dollars, going to a concert where XYZ is playing or getting that massage/69 firebird/ATV or whatever.
For most first gen immigrants from Asia – the people they want to impress are living in Asia. In the old days, they would get dazzled even if you drove a new Camry – let alone a BMW!
The one thing that always impressed your peers in Asia (and your parents) was buying a big and neat American house in the suburb and having kids that were raised and educated well. By american standards it is a mundane unexciting life – but by Asian standards this was a dream life. I am not sure how long it will stay true though…
In short buying house is more than just dollars and cents and investment returns. It is also about creating a place as your home and impressing your peers. Most people buying today are not bullish, they probably said “good enough” and decided to move on…
