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Old 04-17-2016, 05:56 AM   #21
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The *real* point of comparison is to ask if the results would have been significantly different when boomers were in that same age bracket? I suspect not...
I agree with this.
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Old 04-17-2016, 06:37 AM   #22
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There is a bigger concern here as
1. Tradition pension are nearly extinct in the private sector
2. Firm contributions to retirement accounts have dropped significantly..

Hence if the younger generation is to have any chance at a well funded retirement they will have to save early and save more.


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Old 04-17-2016, 07:13 AM   #23
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Originally Posted by dixonge View Post
The *real* point of comparison is to ask if the results would have been significantly different when boomers were in that same age bracket? I suspect not...
Hard to say, but the marked differences between boomers and millennials surely would have had some impact.

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Hence if the younger generation is to have any chance at a well funded retirement they will have to save early and save more.
Yet they have less of a choice about incurring significant debt at the start in order to remain competitive for jobs that pay enough to pay their own way and secure their own future. It's a Catch-22.
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Old 04-17-2016, 07:41 AM   #24
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Actual numbers for income by age, is hard to come by, and of course reasons for the disparity are subject to interpretation. That said, a look back at historical household income may shed some light on the subject. (individual median income by age is not easily found in government statistics)

This website gives an overview of statistics according to simple criteria from several different aspects, and in some simple comparison charts.
Median Household Incomes by Age Bracket: 1967-2014 - dshort - Advisor Perspectives

Below is one chart that shows some interesting statistics for "old men"...

As an interesting aside, looking at the comparable assets/debt for a college graduate from my era (circa 1958) vs. a current graduate from the same school. Annual college costs for me was $1400. Using the CPI, this would put today's cost at $11,500. The actual cost for 2016 is $65,000. Just food for thought.
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"Old White Men?" That's me,I guess
Old 04-17-2016, 07:48 AM   #25
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"Old White Men?" That's me,I guess

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Originally Posted by bUU View Post
Yet they have less of a choice about incurring significant debt at the start in order to remain competitive for jobs that pay enough to pay their own way and secure their own future. It's a Catch-22.

I'm not sure I agree 100% ...
A young guy comes into my office an intern... We get to chatting ..he tells me when he gets his well known university degree (think basketball giant) he will owe $200 grand. I thought to myself my god man what have you done to yourself?

My daughters total cost for 4 years at another well known university will be under $100k. (I was able to fund it so no debt.) Had she stayed home and attended the local university (15 minute drive away) the total cost for for years would be roughly $50k.

Had she started at the local community college we could probably knock it down a few thousand. Throw in a part time job... That's how I did it.

My point being college expense and resulting debt is quite a bit about choices. No one needs to spend $65k a year, they choose to.



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Old 04-17-2016, 08:11 AM   #26
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It is easy to say to do things differently, but the very same could have been said about we were in college. So in an apples-to-apples comparison, there is no way to talk around the fact that students are graduating with twice as much debt as twenty years ago, and probably three or four times as much debt as those of us here had, on average.

By the way, part-time jobs aren't the same as when I was in college. I typically had my pick. There were many more opportunities, especially as I got closer to graduation. Now, my niece is competing for such opportunities with people who need those jobs to feed and clothe their children, and perhaps have been doing that job for years, given the dearth of other opportunities, so why should they consider a transient... a college student looking to move onto a real job in a year or two?

My niece is moving in with us in several months, after she finishes her senior year in college, and is looking forward to the few babysitter jobs that my spouse has lined up for her. It's a very scary time to be entering the workforce.
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Old 04-17-2016, 08:26 AM   #27
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I have a neighbor who will never invest in the stock market. All his 401k money is in a Target fund

I suspect he is not the only one who is confused by stocks versus equities versus mutual funds versus index funds.
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Old 04-17-2016, 08:34 AM   #28
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Originally Posted by rayinpenn View Post
There is a bigger concern here as
1. Tradition pension are nearly extinct in the private sector
2. Firm contributions to retirement accounts have dropped significantly..

Hence if the younger generation is to have any chance at a well funded retirement they will have to save early and save more.


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I would add one other concern: career advancement and salaries have stagnated since the great recession, due to lack of jobs and very low inflation, and compared to the opportunities that baby boomers had, its a totally different world today for many college grads.
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Old 04-17-2016, 08:39 AM   #29
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The article in the OP is fluff. A blog writer does this for sensationalism, and clicks.

This pdf - Understanding Human Capital - complements imoldernu's graph. It is for the individual to decide whether a Masters from Duke will pay off or not.

I have a nephew who lives in the land of startups and VC. He has done very well, even with college debt. It's not something I strove for, but he provides very well for his family.

https://corporate.morningstar.com/us...lFactSheet.pdf
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Old 04-17-2016, 09:02 AM   #30
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I have a neighbor who will never invest in the stock market. All his 401k money is in a Target fund

I suspect he is not the only one who is confused by stocks versus equities versus mutual funds versus index funds.
I suspect you are right, because depending on the year targeted for retirement, most target funds do contain significant stock holdings.
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Old 04-17-2016, 09:19 AM   #31
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A few years ago we had convinced my son, then late 20's that he should open an IRA. Unfortunately when he went to his bank to do so, the financial "advisor" told him not to do so - he should finish paying off college debt (he was already close, so payments were bringing down principal at a good rate), and save for a new car and a new house first.

It was several years later that I learned he felt the banker wouldn't "let him" open an IRA, and didn't seek more advice on where and how to do so. He turned 30 last year and does now have one, but if these kids are being told not to invest, its easy to see how they can be confused.
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Old 04-17-2016, 09:33 AM   #32
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Originally Posted by rayinpenn View Post
I'm not sure I agree 100% ...
A young guy comes into my office an intern... We get to chatting ..he tells me when he gets his well known university degree (think basketball giant) he will owe $200 grand. I thought to myself my god man what have you done to yourself?

My daughters total cost for 4 years at another well known university will be under $100k. (I was able to fund it so no debt.) Had she stayed home and attended the local university (15 minute drive away) the total cost for for years would be roughly $50k.

Had she started at the local community college we could probably knock it down a few thousand. Throw in a part time job... That's how I did it.

My point being college expense and resulting debt is quite a bit about choices. No one needs to spend $65k a year, they choose to.
This may depend on what career the student is most interested in, and the type of company they hope to work for. Our MegaCorp only recruits from a couple dozen universities. All others can apply through the black hole of the careers website and then find an actual job elsewhere. I suspect this is true across a variety of careers, otherwise the whole allure of ivy league schools or the MIT's of the world wouldn't make a difference. Even in Silicon Valley you are much more likely to land a job at an interesting startup if you came from Stanford compared to the community college.

Financially you may have a point. While a $200K degree may land you in a more prestigious company, unless you got a free ride, that additional 100K plus student loan interest may not be overcome in a typical career.
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Old 04-17-2016, 10:48 AM   #33
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I agree that young people today are probably no worse at investing than we were. Heck, I didn't buy an equity until my late 30's and didn't really start investing until my late 40's. My parents weren't of any help as they certainly didn't understand any of this stuff either. Having said that I think young people have a tougher time getting established in their careers and generating excess cash flow for investing.

My solution for my daughter (aged32) is to help her financially get established, pay for her education, and gift her enough to get started with an investment portfolio. I feel sorry for kids who graduate with significant student debt. I have a very lucky daughter indeed.
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Old 04-17-2016, 02:46 PM   #34
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save early and save more.


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Sounds exactly like my early plan. It worked well.
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Old 04-17-2016, 02:53 PM   #35
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I have a neighbor who will never invest in the stock market. All his 401k money is in a Target fund
All Target Date Funds I've seen have at least some, and in many cases, quite a bit of, assets in the stock market. For passive investors, Target Date Funds are a relatively safe, often inexpensive, and prudent way to save for retirement.
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Old 04-17-2016, 04:39 PM   #36
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"millennial women, defined as those between the ages of 18 and 34, don’t understand investing. More than three-quarters of the women surveyed, 76 percent, found investing confusing.
Millennials in general are not investing in equities, according to Stash. Seventy-nine percent of the survey’s respondents said they are not currently investing in the stock market,"

Meh. I didn't buy my first "equity" until my late 30's; and Mr. A. who is much older than I am, was learning right along with me. We made all sorts of investing mistakes.

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Old 04-17-2016, 04:49 PM   #37
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Pretty much everything I know in life is only because I screwed it up at least once before.
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Old 04-17-2016, 05:21 PM   #38
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Pretty much everything I know in life is only because I screwed it up at least once before.
Pretty good title for a book.
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Old 04-17-2016, 07:02 PM   #39
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In my mid twenties I knew nothing about investing.

When my employer terminated defined benefits program, converted to defined contributions, a nice lady Phd from Marine Biology lab and another from Geochemistry, who had lunch next to me at the long table in the cafeteria mentioned that the offering of TIAA CREF was a good thing and putting money in there would be relatively safe. So I did. They were right. If I ever meet them again I'll offer my thanks.

I learned about investing in college which I started around age 35, in economics, business finance and Federal Taxation courses.
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Old 04-17-2016, 07:25 PM   #40
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Eh
I'm a "gen Xer" and the same stuff was around then.

Most of my friends in the late 90s were either not saving or investing in tech stocks (oops). After the 2000 crash many swore they'd never go in the market again (oops).

None of that is different today.

College IS different. My tuition was around 6K/year (1993-1997). Lived at home. Decent state school.

When I run the numbers today I'd probably NOT go to college and instead try to learn as much as I could from the massive number of online learning (I'm a computer programmer) and then try to build up work on freelance sites and personal projects. I think in tech a degree is not as critical as it used to be compared to proving you can do stuff. Unfortunately I think "degrees" are the "everyone should own a home" idea all over again.

As for financial advice I agree with you guys. I didn't get it from my parents when I went looking for professionals they made what was simple very complex in order to get their cut.

It took me many years to realize it's actually very simple... although the behavioral side takes a lot of effort to get going.

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