Millenials' Finances - (Grumpy Old Man Takes)

[Flieger]

I really believe one of the biggest problems today, in many if not all things, (financial situation, political situation, outlook on life) is that so many have Dichotomous Thinking/Manichean Worldview.

It's either the world/country (or whatever topic) is perfect, or it is evil. There is no thought of the gray area of "imperfect but ever improving", same in the financial/economic sense. I also sense that a person with this dichotomous thinking applies it to everything they see and evaluate.

I would hate to go through life that way.

Flieger

 

[G-Money]

Trades continue to be a lucrative option for those without a college education, but for some reason there are fewer and fewer young people going into the trades.

Trades make very good career paths.

I don't speak for everyone in my generation, but one of the common sentiments expressed by my generation in discussions about trades is the unwillingness to give / spend one's own body on a job. In our generation we know too many older people sidelined by injuries and people wearing out their bodies long before their years and coming up short. And when those people are asked, was it worth it? The answer is often some angry and resentful form of "NO" because their career cost them their mobility and/or health, nor did it make them rich enough to overlook those things.

Not that jobs requiring higher education or traditional "white collar" work doesn't have its drawbacks, I'm not saying that. But the data do show that higher education and non-trade pursuits generally lead to higher lifetime earnings and generational wealth.

Guys I know in the trades who are my age or younger are VERY much about staying healthy. They're careful about their hearing (preventing loss). Wearing protective gear and PPE. Not just because OSHA mandates it, but because they know better. Proper lifting, proper movements, and keeping themselves strong. It's a great way to work IF you can do all that and reach a point with your work where it isn't ultimately costing your health and mobility...

 

[Flieger]

Keep flattering yourselves...you had it just as hard if not harder than Millennials.

Your own numbers in post 90, as outlined by Texa Proud in post 94 argue against your statement.

Flieger

 

[jsncpa]

I get the impression from what I read more parents today are/will be faced with that predicament than ever before. Tough choice to be sure.

That's an instructive comment. If the views on this subject could be neatly divided into two camps, one camp would see no parent predicament whatsoever.

 

[Gumby]

I don't know whether it's harder or easier today than when I was starting out. I do know that being smart about the need to figure it out for myself, having a positive attitude in the face of adversity, delaying gratification in service of a larger goal, and flat out working my ass off in always difficult and sometimes dangerous conditions, were the things that got me to where I wanted to be. I suspect that those who have the same qualities will do well today.

 

[jsncpa]

I don't know whether it's harder or easier today than when I was starting out. I do know that being smart about the need to figure it out for myself, having a positive attitude in the face of adversity, delaying gratification in service of a larger goal, and flat out working my ass off in always difficult and sometimes dangerous conditions, were the things that got me to where I wanted to be. I suspect that those who have the same qualities will do well today.

Exactly. So many people above are conflating external conditions and internal attitude. As a wannabe Stoic, I feel faintly embarrassed having to point it out.

 

[MRG]

I don't know. We had it hard, not much education and were hungry for food and a better life.

When I started coding in the early 1980s I met a guy who also had a different start. We both figured if we did things others said were impossible we'd get ahead. He was a dreamer and I could see his vision. We spent a lot of late nights together, and were rewarded.

I'm not sure I followed a traditional approach. Megacorp was a huge influence in allowing me to RE.

 

[Midpack]

Your own numbers in post 90, as outlined by Texa Proud in post 94 argue against your statement.

Flieger

Not really, no one would accept 12.4% mortgage interest for 30 years - an intellectually dishonest example. And you haven’t provided anything other than a personal anecdote. But you’re going to believe as you wish.

 

[Flieger]

Not really, and you haven’t provided anything other than a personal anecdote.

That personal anecdote can be multiplied by a large number of people over time.... and...

AND adding number to this shows that 1985 was WORSE..

The payments for 1985 are 877.27 x 12 is 44.5% of the salary shown...

The payments for 2025 are 2717.88 x 12 is 39.2% of the salary shown...

So people in 1985 were paying a higher percent of their salary for their home than what people pay today...

Now, is it the same for other costs? I doubt it, especially college a health costs.. but the continued talk of they have it harder today than we did just does not make the cut..

OH, and BTW, the avg cost of a home in Texas is just over $300K today vs $93K in 1985 so they can even get in cheaper!!!

Numbers are numbers, but...

I really believe one of the biggest problems today, in many if not all things, (financial situation, political situation, outlook on life) is that so many have Dichotomous Thinking/Manichean Worldview.

Flieger

 

[Teacher Terry]

I see the younger generation prioritizing travel, eating out and nice cars over owning a home and saving for retirement. Totally different mindset.

 

[Mr T]

maybe because they expect to inherit from their Boomer parents

 

[Diogenes]

Perhaps the view of whether the "system" is rigged or not is based on seeing America (and other "first world" countries) as either a "land of opportunities" or a "land of guarantees". Opportunities take time and carry risk, but have no limit. Guarantees are immediate and have no risk, but have limits. Maybe many are more willing to settle for short term guarantees in place of long term opportunities.

What I'm speaking about, isn't a statement about American society or the American system - good, bad or indifferent. I'm talking about immigrants' cultural background in lands from which they came. If you experienced machete-wielding marauders massacring your village when you were 12, then came to America or to Canada or to England or whatever when you were 30, then your reaction to crime reports on the evening news will be starkly different, from those by a person who had a peaceful and prosperous childhood. That's just to give a non-economic example.

Values get passed on from parents to children, yes? Immigrants from the USSR would naturally tell their US-born children to never discuss sensitive issues before turning on the kitchen faucet and putting a pillow over the telephone. It sounds silly in America, but that's what households in Leningrad used to do. It was normal.

So, when these kids are learning about work, Social Security, income taxes, savings, banks, 401Ks, equity index funds and so on... they have to overcome a childhood of anti-institutional prejudices absorbed at the kitchen table.

 

[Texas Proud]

Not really, no one would accept 12.4% mortgage interest for 30 years - an intellectually dishonest example. And you haven’t provided anything other than a personal anecdote. But you’re going to believe as you wish.

And you would be wrong... many people took that high or higher interest rate.. my first home was 13.5% and it was from a housing authority that had cheaper interest rates for first time home buyers...

 

[Pointby2]

I’ve been reflecting on how our generation approached financial independence compared with what I see among younger adults today, and I’d be interested in hearing how others here experienced it.

Being retired, I am looking at a pretty limited pool of individuals. I suspect that's true for most on this board.

Speaking for myself, the path to FI was pretty traditional: I kept non‑mortgage debt to a minimum, avoided carrying credit card balances, took relatively few overseas vacations, and treated help from my parents as a true last resort rather than a regular part of my budget. My parents’ generation had modest lifestyle expectations, and that rubbed off on me; spending was something to justify, not assume.

For sure, we kept our debts at a minimum, paid off car loans and mortgages asap. Never carried cc debt and took cheap vacations. Our parents lived modestly as well and I'm sure that rubbed off on us. We didn't take overseas vacations until we were in our fifties and our NW was growing.

What I observe now in younger colleagues and relatives looks very different. There’s more willingness to lean on credit cards, travel frequently, and draw on parental support for day‑to‑day lifestyle, followed by a lot of frustration around student loans, housing, and general financial stress. Of course, they’re operating in a tougher environment in some respects—higher housing costs relative to income, substantial student debt, and different social norms around experiences and travel—but the comfort with ongoing financial help from parents seems like a notable cultural shift from how many of us were raised.

We don't know anyone that is paying off student loan debt. The youngest people that we know well are in their 40's or later. In that age group there's a wide range. Some save like crazy, others spend way more than we know they should, like keeping their season tickets to the Rams games, taking nice vacations while at the same time losing their home.

For those of you here who are FI baby boomers, how much of your success do you attribute to disciplined saving and debt avoidance, and how much to the era we came of age in—things like tuition levels, housing affordability, job stability, and the financial habits we learned at home? Did you, like me, rarely if ever ask your parents for money once you were launched, or was family support a bigger part of your story?

I think we had an easier time of it. Since we lived in the Midwest, we could live in a mobile home, drive old rusty cars and still save money. College was cheap and didn't require a big loan. Still, we really didn't start saving until after we were 40 years old. But we had a big boost by participating in a LLP that gave us a 300K payout. Now, more kids are getting ahead via stock options. But for the vast majority of younger people they are struggling. I can't imagine living in a city like LA, being poor and trying to go to college.

We never asked our parents for money, although we borrowed 10K briefly once for a deposit on a home we bought. Paid it back in two weeks.

I’m not looking to simply bash younger generations, but rather to compare notes on how our attitudes toward independence, debt, and parental help shaped our retirement outcomes, and whether we think those attitudes still make sense in today’s environment.

I blame social media for telling us that the younger generation is entitled. I don't really believe it tells the full story. I mean, I can go on Reddit and read the "anti-work" forum and get really depressed, if I wanted to. The younger generation that is making it work isn't posting on social media or out protesting.

I also think having "boomer" parents with a nice home and wealth makes it more difficult for them. Our generation with our relatively poor parents gave us a different frame of reference.

 

[Texas Proud]

As another data point about 'did we have it better'... well, I am taking the time frame of my investments starting when I was 30 to 50.. the main investing time IMO...

The Dow grew from 2224 to 12268 in those 20 years.. or a 5.5X..

Someone who if 50 now, so they investing in their 20 years the Dow went from 5529 to 52900 or 9.5X

Now, I have really enjoyed these last 20 years but again, who had it harder between their 30s and 50s?

 

[jsncpa]

Not really, no one would accept 12.4% mortgage interest for 30 years - an intellectually dishonest example. And you haven’t provided anything other than a personal anecdote. But you’re going to believe as you wish.

"No one would" and "everyone would" are almost always illogical setups. I've read scads of your posts without noticing an illogical bent.

This is a personal and emotional issue with you. I understand if you don't care to do so, but I'm genuinely curious as to why, if you'd be willing to share.

 

[N02L84ER]

Not really, no one would accept 12.4% mortgage interest for 30 years - an intellectually dishonest example. And you haven’t provided anything other than a personal anecdote. But you’re going to believe as you wish.

In 1985, we had no way of knowing that the current mortgage rate was going to drop. We did not expect it to drop so we paid extra each month on the mortgage. We were able to pay extra because we did NOT purchase the maximum amount our income "could support". The RE agent and mortgage broker told us we could afford a more expensive first home, but we deliberately purchased a home that was below the median value. Anecdotal, I agree, but there is no reason a young person today MUST purchase a home at or above the median value. I would posit that established home owners would be buying their second and later homes at the higher prices and first home buyers should focus on below median price homes. Smart financial choices should be made by first time home buyers.

 

[Flieger]

In 1985, we had no way of knowing that the current mortgage rate was going to drop. We did not expect it to drop so we paid extra each month on the mortgage. We were able to pay extra because we did NOT purchase the maximum amount our income "could support". The RE agent and mortgage broker told us we could afford a more expensive first home, but we deliberately purchased a home that was below the median value. Anecdotal, I agree, but there is no reason a young person today MUST purchase a home at or above the median value. I would posit that established home owners would be buying their second and later homes at the higher prices and first home buyers should focus on below median price homes. Smart financial choices should be made by first time home buyers.

Agree with all, but especially bolded. I think someone else mentioned Millennials, etc may be impacted by seeing their Boomer parents. I think that may be true, based on "anecdotal observation" that they seem in many cases not want to buy lower, then work their way up to how the Boomer parents are living, as most likely the Boomer parents did it. There are exceptions with generational "wealth" of course, but it is just that, exceptions.

Flieger

 

[Gumby]

The young wife and I lived in apartments for the first nine years after we married. I was 34 when we bought our first and only home, the one we still live in 33 years later. At the time, we were careful and took a mortgage for less than half the amount our income would have qualified us for. The house was old and needed a lot of work, but we were willing to take it on because we wanted to live right here. We had an in-law apartment and a tenant for the first ten years, which also helped us pay our mortgage, but meant we had someone in very close proximity.

To furnish our home, we went curb shopping on big trash day, as we had done while we were tenants. It was years before we actually bought new furniture. We worked on the things that we could do (like painting), and as our financial position improved, eventually we were able to stop renting out our in-law apartment and pay a contractor to make the big changes that were needed, including expanding the kitchen, reuniting the apartment with the main house and adding a two car garage.

We had many friends who, around the same time as us, also bought houses. They typically bought a new construction house at the top end of what they could borrow (some of them with the help of parents), paid someone to paint all the walls before they moved in, and proceeded to immediately buy all the swanky furniture to fill it up. Consequently, our free cash flow was generally higher and we were far more able to save for retirement.

We and our friends were, of course, all boomers. Some of us made good financial choices. Many did not. I don't think that is a generation thing. None of us, then or now, can immediately have everything we want. But eventually, if we work both hard and smart, we may find ourselves quite satisfied with life.

 

[skipro33]

My first 7 years out of high school was in the military. I didn't have any credit cards because no one would give me credit. It was frustrating to wait to have cash to buy anything that was of value; a throw rug for example. $50 took me 2 or 3 months to save for. I had no idea how to save, we were in survival mode. Especially when I was deployed. My wife would go live with her parents, which sucked. They thought I was a deadbeat. Remember back then, no one thanked me for my service, let alone respect the assignments we were performing. I got lucky when I got out, after a few jobs in technology, I got hired on at the local electric company, union job, contract and the pay/benefits/pension was a mindblower. I've always said that it was better than winning the lottery because I enjoyed the work and it paid so well. An older employee recommended I start investing in an IRA. He explained why, even though I had a generous pension and only 29 years old. My motto has always been; take advice when you ask for it and only ask for it from people you respect. I took his advice and was FI by the time I was 45. After retiring at 55, I found no one, zero people, who would ever become financially independent. I learned to shut my pie hole when it came to explaining how I got lucky. People were jealous, some angry even, that they were smarter, more intelligent than me and I somehow was unscrupulous in gaining my wealth because surely, no one with my education, employment background should be able to be FI at my age. I eventually quit telling people I was retired and let them think I was an independent consultant for military contractors and I wasn't at liberty to go into details. After a while, I realized I didn't want to socialize with people I had to lie to in order to be accepted. I know other people; neighbors, church attendees, etc. but not so much I'd call them friends that you have over weekends for BBQ and a beer, or a quick call to come lend a hand when you have a 2 man job and need some help, or to borrow a tool.
Younger generations treat me like I'm a fossil and patronize me, humor me and call me 'pops' not out of respect, but as a slander. A common term, I'm sure you've heard it too, O.K. Boomer. Especially frustrating when they whine that we had it easy, they have it tough and are not at all interested in learning what I know to get to where I am. Afterall, it didn't take any effort like they have to do. So I keep my mouth shut, including or should I say, especially when it comes to politics.

 

[G-Money]

It's nothing but the sound of rocking chairs now and about 3-4 boomer-aged members nodding in agreement while intellectually stroking each other as they share their stories of how they had it harder and kids today just don't want to work for it. Sounds like a bar that's no longer worth spending time in because it's the same folks saying the same old things and they think they're right.

 

[Montecfo]

After my parents (mom and stepdad) shocked me by reneging on what I understood to be an agreement to pay my way through college, I really had to scramble to get it done.

But I worked my butt off which was not new. I worked fast food (was even a manager) bussed tables, washed dishes, waited tables (theme restaurant, my favorite job), worked in auto parts warehouses, unloaded trucks, and worked in a pet shop.

One summer I had three jobs at the same time:Honda parts warehouse parts picker/packer, shift manager at fast food and security guard at a chemical plant! So other than $500 a semester from parents (relationship pretty strained) I paid all my college costs and living costs and was independent of my parents at age 17.

I never asked them for money, ever. Never wanted to be indebted to them.

On the other hand, my dad asked to borrow money from ME when I was in college. And I loaned it to him-twice.

But I made my way partially being steeled by my experience and otherwise just being motivated and positive.

We (many of us) have been blessed with more financially than our parents experienced. Our children are of a wealthier class. Our perspectives are different even though many of us had our kids work hard physical jobs to build resilience. We never ordered DoorDash or got lattes from Starbucks every day. And our generation did not really have such conveniences as readily available. And we did not have video games or cell phones. We did have big long distance phone bills! But they have not had to work as hard and had more resources (e.g., college paid for )

But as someone said, the kids are alright. Our son does not expect or receive money from us for regular expenses but we are generous around holidays. And he has an impressive 401(k) and he tends to be frugal and value oriented.

And though there are plenty from his generation living in their parents' basements we had our own slackers too. That just wasn't the folks on this board by and large.

So some perspective is needed I think.

 

[Flieger]

It's nothing but the sound of rocking chairs now and about 3-4 boomer-aged members nodding in agreement while intellectually stroking each other as they share their stories of how they had it harder and kids today just don't want to work for it. Sounds like a bar that's no longer worth spending time in because it's the same folks saying the same old things and they think they're right.

It may be time to move on.

Flieger

 

[pjigar]

While we discuss this, it is important to keep in mind that we are a very small minority of the general population. We are the outliers. There will always be outliers who will take their piece of pie by hard work and grit. Yes, the times are tough for this generation in general but there are still dreamers who are bound to succeed (I know a few). YMMV.

 

[jollystomper]

What I'm speaking about, isn't a statement about American society or the American system - good, bad or indifferent. I'm talking about immigrants' cultural background in lands from which they came. If you experienced machete-wielding marauders massacring your village when you were 12, then came to America or to Canada or to England or whatever when you were 30, then your reaction to crime reports on the evening news will be starkly different, from those by a person who had a peaceful and prosperous childhood. That's just to give a non-economic example.

Values get passed on from parents to children, yes? Immigrants from the USSR would naturally tell their US-born children to never discuss sensitive issues before turning on the kitchen faucet and putting a pillow over the telephone. It sounds silly in America, but that's what households in Leningrad used to do. It was normal.

So, when these kids are learning about work, Social Security, income taxes, savings, banks, 401Ks, equity index funds and so on... they have to overcome a childhood of anti-institutional prejudices absorbed at the kitchen table.

My immigrant parents, and DW's parents or DW's never dwelt on what happened in their native countries. Instead, they dwelt on the opportunities one could have in America. They *knew* that America was nothing like where they grew up. And that was common in my community. The summer before I went to college, My dad and about a dozen other men had a "send off" for me and other young men, all immigrants or children of immigrants, who had graduated and were off to college, the military, or work. There message was "you have a great opportunity. You do not have to deal with what we had to deal with. Don't blow it". Even with racism being much worse at that time than it is today, they emphasized not using that as an excuse to become a victim, it would cause you to miss opportunities.

If immigrant parents are "looking backward" at what they had to deal with, instead of looking forward at opportunities, they are doing the children a great disservice. Maybe the media has something to do with this, as generally reporting on the negatives and tragedies draws more eyeballs that reporting on successes, and that is what these parents are absorbing. As I said earlier, looking at America as a "land of opportunities" vs. a "land of guarantees" can make a lot of difference.