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The 'lost generation' of millennials born in the 1980s may never be as rich as their paren
Posted on 5/24/18 at 6:18 pm
Posted on 5/24/18 at 6:18 pm
The 'lost generation' of millennials born in the 1980s may never be as rich as their parents
quote:
Millennials face unique financial struggles compared with previous generations.
Millennials born in the 1980s are at risk of becoming a "lost generation" that accumulates less wealth during their lives, according to a new report by the Federal Reserve Bank of St. Louis.
Coming of age during the Great Recession, this millennial cohort has faced high unemployment rates, an increased cost of living, and mounting debt.
From saving longer to buy a home to facing increasing living costs, millennials are balancing myriad money woes compared with previous generations.
All of these hurdles mean they're at risk of accumulating less wealth during their lives.
Millennials are generally defined as people born between 1981 and 1996, growing up or entering the workforce during the Great Recession. But those born in the 1980s are at the greatest risk of becoming a "lost generation" for wealth accumulation, according to a new report by the Federal Reserve Bank of St. Louis.
"Not only is their wealth shortfall in 2016 very large in percentage terms, but the typical 1980s family actually lost ground in relative terms between 2010 and 2016, a period of rapidly rising asset values that buoyed the wealth of all older cohorts," the report says.
As of 2016, people born in this decade had wealth levels 34% below where they would most likely have been if the financial crisis hadn't occurred, the report found. Those born in the 1970s had wealth levels 18% under where they would have been, and the wealth levels of people born in the 1960s were down by 11%.
While the Great Recession "inflicted deep and widespread losses of income and wealth on the typical American family," and wealth losses affected all ages, families younger than retirement age suffered the most, according to the report.
"The late 2000s recession threw up an obstacle in that dynamic for younger workers," The Wall Street Journal's Michael S. Derby reported, adding that the unemployment rate was nearly 10% in 2009. "People of the 1980s generation started their working lives in a time of troubled investment markets, high unemployment, and persistently weak wage gains."
And they've been scrambling to catch up ever since. The 1980s cohort was the slowest to recover from the Great Recession, according to the St. Louis Fed.
While millennials have benefited from a 67% rise in wages since 1970, according to research by Student Loan Hero, this increase hasn't kept up with inflating living costs. Rent, home prices, and college tuition have all increased faster than incomes in the US, the organization found — and that's not to mention increasing costs for childcare, healthcare, and entertainment.
"Millennials coming of age during the Great Recession faced a rude awakening when the high cost of an education didn't lead to higher earnings," Shannon Insler wrote in an article for Student Loan Hero. "Underemployment and living costs coupled with student loan payments have made it difficult for millennials to get ahead."
In addition to student-loan payments, the 1980s generation carries auto and credit-card debt — debt that the St. Louis Fed deems not "productive."
However, not all is lost.
Because this generation has high education levels and more time to earn and save, "it is possible that the income and wealth trajectories of this generation will be steeper than those of earlier generations, allowing many families to achieve their wealth goals in the end," the St. Louis Fed report says.
Posted on 5/24/18 at 6:21 pm to arp0925
They’ll never know if they don’t try.
Posted on 5/24/18 at 6:22 pm to arp0925
We're doing fine too. The student loan debt thing is a real issue though. The government needs to stop backing those. The cost is ridiculous.
This post was edited on 5/24/18 at 6:23 pm
Posted on 5/24/18 at 6:26 pm to Colonel Flagg
quote:
I am doing fine.
I like dumping on millennials sometimes but mostly specific ones. These overgeneralizations are tiresome.
Every millennial I know (granted, only about 15 or 20) are doing just fine too. I enjoy their company when I see them, is exciting to hear about their plans.
Posted on 5/24/18 at 6:28 pm to arp0925
I'm doing just fine, it's the weak parenting and the everybody is a winner mentality that hurt my generation
Posted on 5/24/18 at 6:28 pm to arp0925
My son was born in 1986. He makes 200k a year as a senior software engineer in Silicon Valley.
Posted on 5/24/18 at 6:29 pm to L.A.
quote:
My son was born in 1986. He makes 200k a year as a senior software engineer in Silicon Valley.
How much of that 200k goes to the state California in taxes and rent/mortgage?
Posted on 5/24/18 at 6:45 pm to arp0925
I’m 32 and make more than my parents made at my age. I’ll pass my Mom’s peak pay soon. Got a ways to go to pass up pops though.
Posted on 5/24/18 at 6:46 pm to Loungefly85
I was born in 84. Make more than my parents already. Though my dad is very conservative and has a grip saved. I have some catching up to do in that department for sure, but I am right where I need to be.
Posted on 5/24/18 at 6:47 pm to arp0925
Those born in the early 80’s aren’t millennials. They are kind of a tweeter generation.
Posted on 5/24/18 at 6:50 pm to arp0925
Sucks for the ones who picked shitty jobs.
Hell, sucked for some of the ones who picked good ones just because their timing was awful.
One particular person I know was going into her senior year with a guaranteed position at a premiere employer in her field. Then shite met fan.
Specifically, her employer was Arthur Anderson and the Enron scandal happened, wiping them out and letting her go between her internship summer with them and her official start date as a graduate.
She still landed on her feet with Reliant right after that, which is where AA had her interning in the accounting department, but it’s a pisser to be at the top of the world and have it collapse through no fault of your own.
Hell, sucked for some of the ones who picked good ones just because their timing was awful.
One particular person I know was going into her senior year with a guaranteed position at a premiere employer in her field. Then shite met fan.
Specifically, her employer was Arthur Anderson and the Enron scandal happened, wiping them out and letting her go between her internship summer with them and her official start date as a graduate.
She still landed on her feet with Reliant right after that, which is where AA had her interning in the accounting department, but it’s a pisser to be at the top of the world and have it collapse through no fault of your own.
Posted on 5/24/18 at 6:54 pm to arp0925
As a millenial, I can say that it’s a double edged sword. College costs more and it was hard to get hired during the recession, even with good grades and good connections. On the other hand, it’s pretty nice being alive in the Information Age. The internet taught me a lot.
Also let’s not forget that some millennials are spoiled by wealthy parents and others have to completely hack it on their own. The latter is MUCH more difficult.
Also let’s not forget that some millennials are spoiled by wealthy parents and others have to completely hack it on their own. The latter is MUCH more difficult.
This post was edited on 5/24/18 at 6:56 pm
Posted on 5/24/18 at 6:56 pm to arp0925
quote:
Millennials are generally defined as people born between 1981 and 1996,
That's a big age range. Someone born in 1981 has very little in common with someone born in 1996.
Posted on 5/24/18 at 7:01 pm to TexasTiger80
quote:
How much of that 200k goes to the state California in taxes and rent/mortgage?
Using DFW-Plano, 200k equals 350k here. COL is 75% higher in SF.
LINK
Posted on 5/24/18 at 7:03 pm to Brosef Stalin
Hardest working generation ever. 85-95 put out some quality people
Posted on 5/24/18 at 7:04 pm to teke184
quote:
Hell, sucked for some of the ones who picked good ones just because their timing was awful.
This. Graduated from USC in '07- just in time to put two companies out of business from recession aftershocks.
What followed was two more years of scraping by on several dead-end, menial jobs. I didn't have a "career" again until '11. I lost four years of earning potential and career advancement, and started all over again at 25/26.
Learned a shitload through the process, but yeah, I lost time. Doing OK now, but I'm not where I wanted to be at this point.
Posted on 5/24/18 at 7:15 pm to arp0925
While I consider myself Gen X (1982), I'm doing well myself. No complaints.
On the college = pay thing. That's just comical . And , if the student thought that, he/she was terribly mis-informed
I feel that most millennials don't want to try and save up for things because they think everyone else is living the good life on Facebook. When in reality , those people posting awesome selfies are just as desperate as the person following them.
I agree with others here, FedGov needs to get OUT of the student loan business .
For work and career, simply showing up to work on time doesn't qualify one for a promotion .
On the college = pay thing. That's just comical . And , if the student thought that, he/she was terribly mis-informed
I feel that most millennials don't want to try and save up for things because they think everyone else is living the good life on Facebook. When in reality , those people posting awesome selfies are just as desperate as the person following them.
I agree with others here, FedGov needs to get OUT of the student loan business .
For work and career, simply showing up to work on time doesn't qualify one for a promotion .
Posted on 5/24/18 at 7:21 pm to arp0925
Meh, to hell with millennials
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