‘The Millionaire Next Door’ is a Myth to Most Millennials

[jollystomper]

Gen X here. When I started college in 1989, I met kids who had costly lifestyles and hobbies (skiing, Spring Break rentals, buying from J. Crew catalogs) that I had never been exposed to in my lower-middle-class, pre-Internet life. All I knew was LBYM because that's how everyone in my neighborhood lived. Now, it's simple to find videos of lifestyles to envy/emulate - and that makes it difficult for younger people to defer gratification. Thrift is a muscle that needs to be exercised.

+1

This is a GREAT point.

So many folks evaluate themselves on what others have, and their perception on how they got it.

If you are bombarded with info from folks who appear to have more than you - and are showing it off - it is tough not to be influenced by it.

In my younger days, I could only see those folks I encountered in my community, my college, and at Megacorp. At college I was first exposed to rich people. Some of them flaunted their wealth, and were there just to get grades good enough to pass. But many more - at least the ones I got friendly with - did not, and in fact had the attitude of "my family may have but I cannot depend on it", and studied and worked to achieve something. Heck, some these folks I had no idea were from rich families until someone else mentioned it to me, who had wealth was not constantly in the news outlets back then.

With social media addiction, many put up the faced of "I'm so rich without having to work for it". Folks hear about people doing what they enjoy and making money from it (e.g. being paid to attend parties, or to tweet out something), and wonder why can't I do that. There are few "hard work and save" sounds, and they tend to get drowned out by the "everyone else of having a great life, if you are not there is something wrong with you" social media noise.

I do not think millennials have any less of a hard work and save attitude than my generation (mid-baby-boomer) did. But they are more challenged by all the noise that it is old fashioned, you'll never get anywhere, it will take too long and you cannot enjoy today, while you doing that the world is having a great time and passing you by, etc. messages that are far easier to hear than when I was this age.

 

[ExFlyBoy5]

Funny, I would have kept reading if it were 3 times longer than it was. And now that I know there is a new updated edition, I'll be reading that soon as well.

I too loved the original book but beware...the "newest version" is pretty much a rehash of the original (and the other books as well as the blog) stuff with *some* updated numbers. I was very excited to read the new book but was somewhat disappointed at the simple regurgitation of previous information.

Today's millenials wouldn't know difficulty and sacrifice if it smacked them hard in the head. They seem to want EVERYTHING handed to them, because they "deserve" it.

Generalize much?

 

[dirtbiker]

Skimmed the article. Seemed like a bunch of whining (oh, it's just SO. UNFAIR!! that the mean, nasty older generations have things and we don't! - blah, blah, blah) and refusing to accept LBYM to me.

I grew up the son of a frequently out of work electrician, and a homemaker that didn't make ANY salary. At one point, could not attend an event that literally cost ONE WHOLE DOLLAR because Mom said we "could not afford it". (Her exact words, which I'll remember to my death bed were.."I'm sorry, honey..that costs a dollar, and we don't HAVE a dollar"). Got a paper route at 12 and got up at 4 (yes, 4) AM to deliver said papers for ~5 years of peddling my little rusty bike through the snows and rains of SE Michigan. Never whined or cried about how "unfair" it all was. And guess what? I figured out at the ripe old age of 12 that if I wanted things, I'd have to WORK for them.

Worked my tail off. Paid for MY OWN college (no handouts, or parents giving me tens of thousands of dollars so they could pay for my college while I bought the latest XBox, iPhone and Nike sneakers or trotted off to some exotic, foreign location to spend a semester or two abroad).

Today's millenials wouldn't know difficulty and sacrifice if it smacked them hard in the head. They seem to want EVERYTHING handed to them, because they "deserve" it.

Buckle up, snowflakes. There's this little thing called "work" and "sacrifice" that you need to do if you want the cash and prizes. Get to it.

Careful with the blanket statements. Plenty of us millennials work and have worked very hard to get where we are. I got my first job delivering papers at 12 as well. I then worked all though high school. I joined the army national guard at age 17, paid my own way/army benefits through college, deployed 3 times with the military while getting my undergrad degree. Then I took out loans to go to medical school, and then through residency. I did this all as a single father (well, remarried when I started residency) with split custody and child support payments. I didn't have any of it handed to me, and trust me when I tell you how many times I thought how much easier it would be to just drop out and get a job that pays the bills and stop the sleepless nights studying, writing papers, doing research, working in the hospital all night, and worrying about making ends meet as a financially struggling student with bills to pay and mouths to feed. But, hey, I'm a millennial, what do I know?

 

[Aerides]

Today's millenials wouldn't know difficulty and sacrifice if it smacked them hard in the head. They seem to want EVERYTHING handed to them, because they "deserve" it.

woosh, way to write off a generation...

 

[24601NoMore]

Just observing from first hand, direct experience, gang. An earlier version of the post which I apparently didn't include said there are obviously exceptions.

I just get tired of all the class warfare (which seems to be increasingly frequent) and whining. NONE of us had it easy, and all the whining about how our generation apparently had it SO much easier is nonsense. It was HARD - damned hard.

Net, ANYONE can LBYM and "make it". That's the point I was trying to make..we did that. Millenials today can do it. There are no magical advantages the baby boomers had. It'd be nice for the millenials to quit whining and just get it done (although not "every" millenial complains or doesn't get it, obviously). That's what we did. Why's that so difficult, to the point we keep seeing these "it's so unfair!!" type articles?

 

[RAE]

Housing costs are key and likely everomes bihgest lifetime expense item. So I am a border line millennial gen x guy. I saved money on rent by

1. joining the military
2. Having roommates and sublets
3. Moving back home with mom and dad
4. Moving in with girlfriend
5. Buying a foreclosure that 'needed tlc'
6. Taking advantage of that obama era first time homebuyer credit
7. Maintaining best credit for best interest rate
8. Saving enough of a downpayment to avoid PMI
9. Refinancing when the rate dropped more than 1%
10. Putting extra $ towards principle to reduce interest
11. Renting houses instead of hotels without a kitchen. I save by not going out to eat.
12. Buy low in a saturated market and sell high when housing inventory is low or interest rates are moving higher

I guess I could have ignored all of this along the way and made some pretty lame excuses too.

Good for you, but not everyone has the option to move back in with mom and dad (or girlfriend). And joining the military is fine (if that is what you want to do), but this is the first time I've ever heard anyone mention joining the military as a way to save on housing costs.......

 

[Yoheadden]

Many people think that it is impossible to be a millionaire, as they do not understand the work required to reach a higher financial level. It has never been easier than today, as a million is not what it used to be. Everyone is a victim of something, and that gives people an excuse to think they cannot do better.

Far too many people, millennials and others, think that if you just go to work, something magical will happen and they will be millionaires. They think that is what happened to the millionaire that are already existing.

No one makes a million dollars at once They make a million dollars a few dollars at a time. Even big banks make their billions a few cents at a time, on interest on many millions of loans.

Find me a person willing to work 100-hour weeks, and I will show you a millionaire in due time.

In the USA, anyone can be a millionaire if they have the ambition, fortitude and willingness to sacrifice in the short-term.

I couldn’t agree more. It takes patience, sacrifice and a willingness to make an effort. I question how many are willing to do these things these days.

TMND was eye opening for me and is still in my bookcase. I try to teach the HS and college kids that we hire the basic principles and how easy it can be for them. Most just think of retirement as a unicorn, a far away fantasy creature that they can only imagine.

I wish someone had talked to me about TMND & FIRE, but then I wonder if I would have listened either. I know if someone told me then, where I would be now, I probably would just laugh it off.

 

[Aerides]

I guess I find it astonishing/sad that so few of us are willing to admit that at least a part of our good fortune is a result of timing and luck. I know that despite working hard, lbym, and doing our best it could have ended up differently.

 

[ExFlyBoy5]

I guess I find it astonishing/sad that so few of us are willing to admit that at least a part of our good fortune is a result of timing and luck. I know that despite working hard, lbym, and doing our best it could have ended up differently.

Oh no, I chock up my station in life to about 80% good luck/timing and 20% action on my part. And really, I am probably giving myself too much credit @ 20%.

 

[Mmm Rrr]

I guess I find it astonishing/sad that so few of us are willing to admit that at least a part of our good fortune is a result of timing and luck. I know that despite working hard, lbym, and doing our best it could have ended up differently.

I know that my early retirement was completely due to timing in the real estate market. I would have had a comfortable retirement anyway, but because of my timing and luck I got to start it at 52.

I just went out and plugged what I know about my DS's finances into a retirement calculator and he is in great shape despite being a millennial. When he was signing up for benefits from his first "real" job, he called me and said, "So from what I read, I should be saving 20% of my income for retirement, right?" He does that, has saved enough to become a homeowner, and practices LBYM.

Probably half of the next generation in my family follows this pattern, which is a better percentage than the boomers. It amazes and dismays me to hear millennials being dismissed the way they often are. It certainly isn't warranted from my observations!

 

[Amethyst]

Not only that. If, nowadays, everyone around you is determined to live it up to their very last dollar (I'm also thinking 1980's Bonfire of the Vanities here), then just think of the advantage LBYM gives you!

Js.


Net, ANYONE can LBYM and "make it". That's the point I was trying to make..we did that. Millenials today can do it.

 

[24601NoMore]

I guess I find it astonishing/sad that so few of us are willing to admit that at least a part of our good fortune is a result of timing and luck. I know that despite working hard, lbym, and doing our best it could have ended up differently.

Not sure about you guys, but I don't consider any of my "good fortune" due to "luck" or "timing". It was back breaking, constant sacrifice and HARD WORK that enabled me to get to the point I'm at. In fact, if anything, I had consistently BAD "luck" via numerous setbacks.

FWIW, I think it's unfortunate that a large part of our national discourse nowadays is have vs. have-not, with the have-nots ascribing "luck", "advantage", "privilege" or worse to those of us who made it. I had ZERO luck. ZERO advantage. I grew up very poor in the slums of inner city Detroit with ZERO advantages (Dad was a non-union electrician who was laid off more than he worked..Mom took care of our tiny little house and had no income). We moved out of our tiny little, ramshackle house when there was a shooting across the street, and the killer threw his gun into our trash can. Pretty tired of hearing about "good fortune" and "lucK", honestly, as I had NONE of it.

The American Dream (as Mark Cuban will tell all who will listen) is pretty simple - work hard. Sacrifice. Save your pennies. But that's (in my experience) such "old school" thinking that few seem to want to do that anymore. Frankly, I miss that - and what it says about our country overall.

 

[REWahoo]

Late to this thread, my apologies. Way overdue posting this...

 

[Senator]

Not sure about you guys, but I don't consider any of my "good fortune" due to "luck" or "timing". It was back breaking, constant sacrifice and HARD WORK that enabled me to get to the point I'm at. In fact, if anything, I had consistently BAD "luck" via numerous setbacks.

FWIW, I think it's unfortunate that a large part of our national discourse nowadays is have vs. have-not, with the have-nots ascribing "luck", "advantage", "privilege" or worse to those of us who made it. I had ZERO luck. ZERO advantage. I grew up very poor in the slums of inner city Detroit with ZERO advantages (Dad was a non-union electrician who was laid off more than he worked..Mom took care of our tiny little house and had no income). We moved out of our tiny little, ramshackle house when there was a shooting across the street, and the killer threw his gun into our trash can. Pretty tired of hearing about "good fortune" and "lucK", honestly, as I had NONE of it.

The American Dream (as Mark Cuban will tell all who will listen) is pretty simple - work hard. Sacrifice. Save your pennies. But that's (in my experience) such "old school" thinking that few seem to want to do that anymore. Frankly, I miss that - and what it says about our country overall.

Nearly exactly my situation too. Growing up in a single-parent household in the 60s was no path to riches. Our refrigerator was a Coleman cooler. Kitchen table was an old picnic table. My mother worked two full-time jobs, and a part-time job. Every weekend she worked 32 hours straight.

I rehabbed my rentals while working full-time. 100+ hour weeks, working a FT job, mowing grass and plowing snow to make extra money, plus the rentals. Many years of it. No time to spend money except on tools, flooring and kitchen cabinets.

When I hear about people that do not have enough money, I ask if they are working 100+ hours trying to get ahead. If they are not, I discount their plight.

You do not have to work 100+ hour weeks to succeed, but if you are not succeeding with the amount of work you are currently doing, try it. It works.

 

[Walt34]

It sounds like a long list of whining and excuses to me. What do you guys think?

I think it's a long list of whining and excuses. For example:

In addition, Read’s family house cost him $16,000 in the 60s. Adjusted to 2017, that house would be equivalent to a little over $131,000. That essentially rules out home ownership in both coasts of United States. You would need to remain in American heartlands, find a stable job there for 65 years, and purchase a family house that would cost around $130K – a rarity these days.2

The bolding is mine. The solution is obvious - move away from the coasts!

Living in West Virginia for the last nearly 17 years, I can assure the author that there are gobs of very nice homes to be had for $131k, and many for a lot less. While I haven't inspected many of them, I'm fairly confident that few if any have much more than one bathroom, two at the most, and don't have granite countertops or the latest stainless appliances.

Neither DW nor I had any of that when we grew up and we seem to have survived the deprivation.

There are stable jobs here too. One of the guys painting our house today has been employed at the same company for the last eighteen years. I'd call that a stable job.

 

[RAE]

I guess I find it astonishing/sad that so few of us are willing to admit that at least a part of our good fortune is a result of timing and luck. I know that despite working hard, lbym, and doing our best it could have ended up differently.

+1, I find it astonishing as well.

Timing (and some luck) were big parts of it, in my case. Sure, I worked hard and made a lot of good decisions along the way (financial and otherwise), but without someone giving me a chance and hiring me for that first good job right out of college, it could have ended up differently for me, also. And I was able to graduate college with no debt (again, partly due to timing), which was a huge advantage. I think we are kidding ourselves if we think that every person has exactly the same shot at success in America, and that willingness to "work hard" is the only thing that seperates the winners from the losers. It's not that clear-cut at all.

 

[street]

Many people think that it is impossible to be a millionaire, as they do not understand the work required to reach a higher financial level. It has never been easier than today, as a million is not what it used to be. Everyone is a victim of something, and that gives people an excuse to think they cannot do better.

Far too many people, millennials and others, think that if you just go to work, something magical will happen and they will be millionaires. They think that is what happened to the millionaire that are already existing.

No one makes a million dollars at once They make a million dollars a few dollars at a time. Even big banks make their billions a few cents at a time, on interest on many millions of loans.

Find me a person willing to work 100-hour weeks, and I will show you a millionaire in due time.

In the USA, anyone can be a millionaire if they have the ambition, fortitude and willingness to sacrifice in the short-term.

absolutely right!

 

[jkern]

Wow, that is a great NW for her age. What field is your daughter in?

She graduated in 2013 with a Statistics degree from Cal Poly. She currently works as a Sr. Financial Analyst at Cisco Systems.

She's been a saver and investor her whole life. She has had a few things go her way, her mother and I paid for her college. She inherited $10K from her grandfather. She bought a condo early 2014 and has done well with appreciation.

 

[jkern]

Hard work alone is not going to get most young adults a net worth of $450K at age 28 - your daughter's situation is rather exceptional, I'd say. I know plenty of extremely hard-working young people that are doing okay, but have nowhere near that amount of NW at that age. And I also know some young people that are hard-working, but basically struggling to get by (and not because they aren't frugal). I'd also be interested to know what field your daughter is in, and did she incur any college loans that she had to pay off?

Yes, she was fortunate. Her mother and I paid for her college. She worked and saved most of her money. She saved her money as a child (I gave her 100% matching savings). We gave her about $2K in EE Savings Bonds as a child. She inherited $10K from her grandfather. She had $30K saved when she graduated college and saved more when she lived at home for the first 8 months. She bought a condo in early 2014 and did very well in appreciation. She's been saving and investing a lot since graduation. Real Estate equity: $185K, Cash/After tax stocks & Bonds: $140K, IRA/Roth/401K: $100K (at least before today), Personal Property: $25K.

 

[HI Bill]

I have never met a person who only worked a 9-5 40 hour work week and became a millionaire. Every millionaire I know either worked 60 plus hours a week, mutiple jobs, real estate or some other type of deal. One other person here at work is a millionaire and he owns three rentals and got a good life insurance settlement when he lost his wife ten years ago. The 1%ers, 3%ers, 5%ers or whatever are rarely ever "normal" folks working 40 hour weeks and doing nothing else. YRMV

Sorry we haven't met, but if we had, you'd know someone who worked 40-45 hours for his entire 28-year career, with the exception of several weekend days. For 17 of these 28 years, I was exceptionally fortunate to work four tens (four ten-hour days) and take off Fridays.

I focused on quality, not quantity, and made myself as efficient as possible. I took on additional responsibility, but stuck to one job. I only owned one rental, and only for one year. For professionals, who LBYM, and earn a decent salary, and move/live in places where the jobs are, working excessive hours may not be a requirement. I'm in the top 5% for my age, now.

 

[6miths]

Last point on the subject of the "millennial": Not too long ago the DW and I were at a bar having a few adult beverages. We were having a conversation with a law student who was in his late 20's. At some point, the discussion turned to millennial and "their perceived shortcomings". He brought up a very good point on the famed participation trophy...he said, "You know, we didn't ask for them...it was the generation BEFORE us that decided we should all get a trophy!" So, if that generation is so bad, whose fault is it?

I think this is a good point. Adversity builds character and in some respects the millenials may have been kneecapped in many ways by many factors. To this day, I don't really understand how my parents and grandparent lit a fire in me despite pondering it at great length. As a parent of four 'echo boomers' it was a very important question to me. Time will tell how successful we were...

The same self righteous generation that was going to make the world a much better place as hippies, and went on to preside over the longest stretch of government deficits/record debt and more shameless corporate outlaws than generations before. The generation many of us are from, self included. We haven't left the world a better place, we ended the long standing notion of the next generation doing better than we did, and we've left millennial's and their children to pay for it...

True, we probably aren't going to come away with the 'Second Greatest Generation' label unless the asteroid hits in the very near future!

I guess I find it astonishing/sad that so few of us are willing to admit that at least a part of our good fortune is a result of timing and luck. I know that despite working hard, lbym, and doing our best it could have ended up differently.

Absolutely. So many positives in our favor right out of the gate, followed by a great deal of luck.
I agree with many of the points made in the article and think it is much more difficult to become a 'millionaire these days.

 

[HI Bill]

I guess I find it astonishing/sad that so few of us are willing to admit that at least a part of our good fortune is a result of timing and luck. I know that despite working hard, lbym, and doing our best it could have ended up differently.

+1. I agree with your statement, and certainly, the accident of birth plays a HUGE role in our opportunities. That said, as one forum member pointed out to me, for those in the same class, the same major, the same company, the same salary....most end up in debt and working until FRA, and a very small percentage make the choices needed to FIRE. Many people have the opportunity to LBYM, save, invest, plan for the future, and FIRE, but they don't.

I certainly don't attribute my success only to my efforts. My accident of birth, my hometown, my parents, my friends, and many other external factors played a role in my success. Even former Congress members, who wrote laws long ago, enabled me to succeed financially in my chosen profession, although when I entered it, I had no idea that would be the case.

 

[razztazz]

Originally Posted by ExFlyBoy5 View Post
Last point on the subject of the "millennial": Not too long ago the DW and I were at a bar having a few adult beverages. We were having a conversation with a law student who was in his late 20's. At some point, the discussion turned to millennial and "their perceived shortcomings". He brought up a very good point on the famed participation trophy...he said, "You know, we didn't ask for them...it was the generation BEFORE us that decided we should all get a trophy!" So, if that generation is so bad, whose fault is it?
-----------------------------------
I think this is a good point. Adversity builds character and in some respects the millenials may have been kneecapped in many ways by many factors. To this day, I don't really understand how my parents and grandparent lit a fire in me despite pondering it at great length. As a parent of four 'echo boomers' it was a very important question to me. Time will tell how successful we were...

Exactly. Every generation ought to be ashamed of itself. Mostly for being lying sacks.
Don't like baby Boomers? And for the first 50 yrs of my life they were always public enemy #1. Blame The "Greatest Generation" Who did nothing but stand there as far as I cam see. Seeking credit for every little thing while denying responsibility for anything. Slick. Real slick

 

[robnplunder]

There are people who figure out a way to achieve their goals and there are people who make excuses why it is not possible. I think that has always been the case. I think the biggest impediment to millennials is that they haven't ever been without and that they consider luxuries as necessities.

I was going to reply with something similar. If I were to add more to this, becoming a millionaire may have gotten harder but it is still doable for most. I just came back from a trip abroad where it takes money (at least born into a middle upper class) to become a millionaire. For them, it is really, really hard to become a millionaire on your own.

 

[24601NoMore]

+1. I agree with your statement, and certainly, the accident of birth plays a HUGE role in our opportunities. That said, as one forum member pointed out to me, for those in the same class, the same major, the same company, the same salary....most end up in debt and working until FRA, and a very small percentage make the choices needed to FIRE. Many people have the opportunity to LBYM, save, invest, plan for the future, and FIRE, but they don't.

I certainly don't attribute my success only to my efforts. My accident of birth, my hometown, my parents, my friends, and many other external factors played a role in my success. Even former Congress members, who wrote laws long ago, enabled me to succeed financially in my chosen profession, although when I entered it, I had no idea that would be the case.

Disagree completely. Every single one of us has THE SAME opportunity as every other one of us.

If I can crawl out of the Detroit slums by sweat, sacrifice and hard work and RE, anyone can.

Really tired and expaserated by all the "but...other people had "privilege" and "good luck"..and...")

Horseshi!.

We all have the EXACT SAME Opportunity.You're born into the greatest country in the history of the planet, and it is what you make of it. Quit complaining and talking about the "accident of your birth". Seriously? The "accident of MY birth" put me in inner city Detroit, with murders happening outside my front door. Quit complaining and realize you have the SAME opportunities that every single one of us - despite "accident of birth", skin color or what ever perceived "privilege" anyone thinks any of us has. That's total BS, not to mention plain and blatant politics.

ETA - you stated the obvious and not sure you realize it.."many people have the OPPORTUNITY to LBYM, save, invest and plan for the future and FIRE, but they don't"

BINGO. It has SQUAT to do with the "accident of your birth" but instead is all within your own individual control to work hard, sacrifice and make the difficult choices.

Really tired of people hammering on those of us who have made great personal sacrifices to achieve what we have, while claiming some vauge "privilege" or "accident of birth". You simply have NO IDEA what we have done to get where we are at.