akblizzard wrote: ↑
Tue Jul 31, 2018 11:42 am
jehovasfitness wrote: ↑
Tue Jul 31, 2018 10:53 am
theDON2050 wrote: ↑
Tue Jul 31, 2018 9:29 am
As a 27 year old who frequents this website, I am not botching my asset allocations. However, I do find concerning the number of my friends/coworkers who have either little to no ability to save, no concern about their retirement, or just trusting their financial advisor blindly.
Is it really surprising? Real wages have remained flat while housing, healthcare and education have far outpaced inflation. Not much left to save for many.
Until recently I worked with many people in this age group (about 27 yrs old). Most said the mantra above about not being able to save because (enter list of reasons here). I get it, I was 27 once too, raised a family and all that. But I noted these particular people somehow had money for tattoos, cigarettes, Friday night at the bar, vacations, best phones & plans etc.
Edit to add: those folks who did participate in the 401k seemed to just follow whatever advice the plan rep gave them.
While I agree with your general sentiment that millennials spend far too much and save too little, my understanding is that this is true of Boomers and Gen Xers too. It's not a generation specific problem. The big difference in the case of millennials comes from the twin punches of student debt and unaffordable house prices. None of the prior generations have had to deal with that. When you start life out 5 figures in the red, and then look at starter homes you wont be able to afford any time soon, it is easy to give yourself the little luxuries instead. If the prior generation was able to buy the same starter home for $200K with $2K in property taxes / year, and the new generation has to pay $600K with $6K in property taxes / year, the phones and beers and tattoos are a rounding error. Salaries haven't gone up 3x, but it is taking 3x as much to have the exact same roof over your head. You save for the starter home downpayment, you don't save for retirement because it looks like a distant, impossible and hopeless proposition... similar to how a person wouldn't apply for a job or a university that they believe is "way out of their league". It seems so daunting, demoralizing and unlikely, you don't even bother to try. So instead they focus on making the best of "right now". There are many other factors involved too..
I am not supporting that behavior, I think minimizing your spending until you have reached financial independence is the responsible course of action. I am just trying to give a different perspective from the "It's their own fault they don't have anything saved!" narrative. Of course.. they have to deal with the situation they are in, one way or the other .. I think the FIRE community is one such reaction to the situation. They swing in the other direction and are mostly millennials espousing the ideology of rejecting the entire consumerist system altogether. However, they get criticized for being lazy and being okay with living their entire life in poverty. Millennials can't seem to win.
It's not about generations being different, it is about situations being different. No generation in US history (AFAIK) has had to deal with the current combination of high education cost, high housing cost, and low expectations of employment prospects, investment returns and projected economic growth. They are dealing with it in different ways, not all of which are constructive.