Depending on who you’re talking to lately, the economy is either about to crash the likes of which we haven’t seen since the Great Depression, or it’s going to moon beyond all conceivable abundance.
Here in the United States — again, depending on who you’re talking to — people are either living in hopeless, desperate, penniless squalor, or they are all land-owning, yacht-floating, tax-avoiding millionaires and billionaires.
Like nearly every subject these days, both are lies. The truth is in the middle.
I am no longer young. I am closer to forty than thirty. I am also not old. I am solidly, squarely, undeniably an adult. I haven’t been able to handle more than two beers for years now, but I’m also 24 years from being able to withdraw from my IRA.
This purgatorial age of neither old nor young gives me the unique ability to call it like I see it, without the ignorance of Gen Z or the arrogance of a boomer. I’ve been working for enough years that I’ve seen consequences, but I’m not yet jaded enough to forget the struggle.
Sometimes I look around at folks in their early twenties complaining that they’ll never be able to afford a house, and it makes me chuckle. When I was in my early twenties, I also couldn’t have afforded a house, even though looking at historical prices makes me wish I did. Or I see a 26-year-old saying something about work/life balance, and I snort. You’ve haven’t earned your rest yet. You’ll never have as much energy as now. Wouldn’t you rather work while you can?
And then I look at folks in their late seventies complaining that the young folks just need to “put back some” towards retirement, and I also chuckle. When you’re young, you have to pay rent, buy groceries, have kids, and save up for a new beater car. There’s rarely anything left over for “retirement”. The world is different today. It’s been globalized. Jobs are harder.
Both sides are simplistic. Life isn’t easy (systemically). But neither is it hard (systemically).
You should listen neither to the 26 year old or the 76 year old. You must look at the 36, 46, and 56 year olds.
The reality is a compromise between the poles. And when I look around at peers, there are a few things that come to mind.
First, encouragement to the young folks:
You would not believe how many morons I know who make well into six figures. If they can do it, you can too.
You will eventually own a house. If you want one, they will be there.
It is not expensive to own a reliable car. You may need to settle for something a couple years old with 40,000 miles on it. It may not be a 2025 Escalade, but it will have Bluetooth.
Twenty-four million households in the US are millionaires. Many of them were mechanics or general contractors. And all they did was make consistently good decisions.
Second, a bit of a request for understanding from the old folks:
The corporation you worked at for 4 decades no longer honors the “lifetime contract”. They outsource and lay off every year.
The union that kept your fancy blue-collar job for you, now exists to keep other folks out of a blue-collar job.
That $2 million you have in your bank account is decaying from inflation, so while you may be just fine because you’re old, the young person needs to save $8 million just to be in your position by the time they’re your age.
Like everything, the reality is more nuanced, complicated, and changing than either side of the question likes to assume.
I graduated from college in 2011, nearly 15 years ago, in the rock-bottom of the Great Recession.
The national debt has gone from $15 trillion in 2011 to $38 trillion today.
But here’s the thing: 15 years before 2011, the national debt was over $5 trillion. 15 years before that, in 1981, it was under $1 trillion.
Do the math, and 1981-1996 was a 5x, 1996-2011 was a 3x, and 2011-2025 looks to be 2.5x. Inflation might make those numbers even better.
As bad as the national debt is (and it’s bad, no denying it)…the reality is that it keeps chugging along. In those 45 years several generations of Americans have gotten rich and retired.
In the middle of all of this, there have been dot-com busts, 2008 crises, 2020 shutdowns…
If I am being totally honest, I do not think there will be any material change in this pattern.
It’s easy to give up hope, as a young person, because everything looks bleak and you’ve never experienced money, career, or consequences.
On one side: yes, it’s hard work, and you can’t make any stupid financial decisions like A) spending all your money, B) sacrificing high income early on for “work life balance, C) divorce, or D) losing it on get-rich-quick schemes.
On the other side, if you just keep your head down, keep working, live moderately, it’s pretty simple: you’re going to be okay.