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I think the saddest thing in the USA is that our young adults have essentially been written
off, enmasse, from accumulating wealth.....and this in so many ways I find it hard to even narrow them all down..
This goes far beyond paying off student loans........and has repercussions that can very much tarnish America's future...
What we have now bolstering our economy are the wealthy, the part of the middle-class that is still solvent, and seniors......
From about age 55 down, the average wealth of individuals and familes plummets....hugely.....
Here is how it lays out....
The age group that currently is 65-74 is the wealthiest group, with an average family net worth of 220K...and that, keep in mind, with no kids to raise. The age group that is 75+ has an average new worth of 195K....
That being said, it drops down for the boomers, per the younger ones that are 55-64.....they have a lot of debt, but still have a reasonable share of savings.....on average 170K a household.....
Here is the big dropoff...I am 52, so this is my generation cohort..X.....we older X's(45-54ish) have an average family net worth of 92K(half of the younger boomers)....the younger ones(35-44) have an average family net worth of 33K(1/5th of the younger boomers who themselves are finished raising kids for all intents)....keep in mind these are the age groups that should be the main spenders/drivers of the US economy.....and they don't have that ability....all the money is locked into the older boomers and the seniors by far...not unlike a company sitting on cash in another country that is hoarding the same....
And finally we have the very bottom....Millennials..those under 35.....their average net worth is close to zero, and is below zero(negative) in some surveys/stats.....
This is the worry.....
We have an entire generation of young adults, from around 18-34, who have little chance of ever raising a family, let alone aquiring a lifetime of wealth. And I mean little. As I mentioned earlier, this is far from just a student loan thing. This is the first generation of americans to face outsourcing of living-wage jobs enmasse, especially the formerly working and lower middle-class ones. This generation has to fight for poor-paying retail jobs, and pray they get enough hours each week. They with certainty will never save much money at all, if any.
Here is where the repercussions kick in. The wealthy seniors in our topsy-turvy world will die off eventually, and leave the money to the boomers. The boomers will spend it all, as they are struggling as well, and health care will siphon the rest.......the Millennials are going to be left with nothing per wealth passed on, zero, with no way to gather it for themselves in volume career-wise.
This will for all intents mark the end of the housing market. The Millennials will be a generation of renters for a lifetime, not by choice. The few who are able to raise family and buy homes will never accrue wealth by the same like the silent generation(born 1928-48), or the older boomers(born 48-60).......
This does not have to be, but looks like it will play itself out like this.......We have an US economy driven by spending(70% or so)......prob is, all the savings is tied up with seniors and older boomers in the US that are far past the age of spending, and will hold onto every penny per retirement issues, outside of small spending on perhaps a vaca or two at most, perhaps a few dinners out..........The age cohort that traditionally are the big spenders(29-42 raising families), and the younger ones(18-28) are broke, and have little to nothing to spend.....
That is not a great omen for the future of the US economy, or the future of the younger generations...
Any opinions on this?
Here are a few articles on this....This is a huge issue we are ALL living with, and will for many years...
When did the 18-34 cohort ever have a high net worth?
Why would anyone think that cohort would have a high net worth?
Why shouldn't the oldest cohort, who spent their lives working and accumulating wealth, have the highest?
I think this is missing the point, which wasn't saying that the 18-34 age group should be the wealthiest age group, but just that they are having a much harder time getting off their feet than someone who was 18-34 years old in the 1970's would have.
Decades ago, before NAFTA and so many other structural changes in the economy, the average Joe (or heck, the below average Joe), could finish high school (or maybe not even finish), and land a unionized blue collar job that would buy him a nice ranch house on a 3 acre plot of land. And his wife would have the choice of staying home as a homemaker if she didn't want to work, and they still would have a nice middle class lifestyle. That's not the world of 2015.
When did the 18-34 cohort ever have a high net worth?
Why would anyone think that cohort would have a high net worth?
Why shouldn't the oldest cohort, who spent their lives working and accumulating wealth, have the highest?
It's not that they have no net worth...its that they have little to zero chance of ever accumulating any, unlike any prior generation. I'm sure you have heard that this is the first generation to not do as well as their parents......this is taking place in Europe as well, where, for example, in Greece, close to half(49%) of all adults between 18-34 are unemployed.
That means few will have a chance to buy a home, and most will struggle to even raise a family....put another
way, most are struggling now just to support themselves, whether they are still living at home or not, and this into their 30's.....
That being said, the 18-34 cohort in the 60's and 70's were already buying homes and raising families in that cohort(18-34)....so the answer to your first question would be, as recently as the 70's most of that age cohort was raising families, and many were buying their first homes....
My parents bought their first home in 1966 in a Chicago suburb, when they were 24 and 23......
Your answer to the other question, "Why shouldn't the oldest generation have the most cash?"......That was not always the case....up to as recently as 1963(just before Medicaid), seniors were the poorest generation, and saved little.....they made little, few lived as long as now, and med bills, pre medicaid, ate up their savings......People told jokes about old people eating Alpo dog food back then(which many did as they could not afford regular meat)....
It is unheard of for seniors to have more savings than other cohorts, as they generally outlive their saving, and cannot work to generate more income anymore, thru history, till the 70s, when that started changing.
Now, we live in a topsy-turvy world, where the age groups that are traditionally the biggest spenders, the young adults, and middle-aged ones raising families, have the least net worth, and seniors, traditionally the tightest with their savings for good reasons, having the most...
If people lived today like families in the 50-70s they'd get ahead too. One car per family, one TV, home phone(you could sub a single cell phone) at dinner at home every night, bought a 1200 sqft house that was 3/1 etc
I think this is missing the point, which wasn't saying that the 18-34 age group should be the wealthiest age group, but just that they are having a much harder time getting off their feet than someone who was 18-34 years old in the 1970's would have.
Decades ago, before NAFTA and so many other structural changes in the economy, the average Joe (or heck, the below average Joe), could finish high school (or maybe not even finish), and land a unionized blue collar job that would buy him a nice ranch house on a 3 acre plot of land. And his wife would have the choice of staying home as a homemaker if she didn't want to work, and they still would have a nice middle class lifestyle. That's not the world of 2015.
That is exactly how it was in the little suburb of Chicago, Dolton, I grew up in.....
It was working class, and most parents worked at factories and such....to make a specific point, my neighbor worked at SEARS in the catalog department, in shipping and receiving, and bought a 3-bedroom tri-level, while the wife stayed at home as a homemaker(raised 4 kids as well)......try imaging that happening now...you would struggle to rent an apartment now, even with the wife working, if you were in retail now...
Here is a video of my town growing up.....keep in mind this was a factory town, and look how prosperous it was..
Well boo f'n hoo. Funny you don't mention the number of over 50 professionals with education and experience that can't find a job at all. And there are a number of them struggling to survive. And you think it's wonderful for all over 50? Everyone is rich and happy over 50, give me a barf bag. Man, why do you start this type of thread.
If people lived today like families in the 50-70s they'd get ahead too. One car per family, one TV, home phone(you could sub a single cell phone) at dinner at home every night, bought a 1200 sqft house that was 3/1 etc
Low, no doubt it would help, other things being equal, if people were more frugal.....problem is, there is nothing left to be frugal with for so many millennials.....you cannot create future net worth when your wages themselves are not even living-wage...in that case, all of it is accounted for, and you are left struggling just to create a tiny rainy-day fund of $500-1000 dollars, if that, for car breakdowns and such.
I absolutely agree that people back in the 1960's and even 1970's were more frugal. They grew up faster.
You were excepted to be raising a family by the time you were 23-25, not living in your parents' basement
surfing the web all day......That being said, the issue/problem is that those millennials that are willing to work hard have absolutely FAR FAR fewer chances to earn a hard-working living wage, unlike the 50's-70's, where
you could get one of those right out of any high school(often even without a high school degree even)...
something from nothing = nothing.....you simply cannot save or grow net worth when you are not even making a living wage, let alone rent(God Forbid buy one or raise a family solo) on one....
Agreed, frugality and maturity does help out though, and is lacking.......But that does not amount to a hill of beans without living-wage jobs......
God save us if our entire generation of Millennials ends up working retail enmasse permanently......that would bring us down to China/Mexico wages before long.....China's could be higher by the 2020's....seriously..
When did the 18-34 cohort ever have a high net worth?
Why would anyone think that cohort would have a high net worth?
Why shouldn't the oldest cohort, who spent their lives working and accumulating wealth, have the highest?
Exactly. It doesn't take a genius to see that it can take decades to accumulate wealth.
Good grief, enough with the class envy.
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