3 out of 4 millennials

[bigblueinsanity_rivals250340]

So many factors at play for young adults and nearly all of them created by incompetent politicians from both sides.

Inflation because of runaway spending. Skyrocketing tuition because of bloated administration hiring at schools and unchecked student loan issuance. Due to politicizing secondary and higher education, they enter adulthood and their careers with zero life or career skills. Corporate offshoring and globalization to save costs but not pass on savings. International tax havens. Letting china eat our lunch for 20 years. Domestic energy policy. Housing collapse and now refusal to stop runaway increases due to letting investment funds drive up prices.

On and on. We're well beyond the tipping point for most, if not all, of these items to be reversed. So it won't be getting better.

 

[Kingseve1]

I empathize with the financial challenges millennials face. I have a daughter, age 25, that falls into the age end of that group. She has a four year degree, has started grad school, as well as just began her first job in her field. Back in 1989, I was almost exactly at the same place in my life . . . college done, grad school, and starting my first professional job. The salary ranges for the two fields are very similar today.

I started at $20,000. She is starting at $41,000. Her income a little over 2x greater.

My grad school cost was around $500 per class. Her grad school cost is around $2,000 per class, which is around 4x greater.

I bought my first starter home for $52,000 a short time later. That same starter home was just on the market last year and brought $185,000. It sold for about 3.5x more.

And lastly, the average new car price in 1989 was $12,000 - $15,000. Fast forward to today and it’s easily in the mid $40k range. Again, 3x to 4x greater.

Millennials face a world where their income has doubled from their parents but the cost of living is by far outpacing the income growth. Many of them will never be able to afford to experience the lifestyle that their parents told them were part of the American way . . . work hard and you can live in a nice home, occasionally buy a new car, and take a vacation every few years. The math doesn’t work. I’d assume that’s the cause of their growing debt.

Pretty cool that she is doing so well, despite the growing income/debt issues in the country. You almost have to start your own business to make big money any more, unless you’re a doctor, lawyer, or brainiac.

 

[Kingseve1]

In my next go round, I’m gonna sell, finance and maintain used cars

 

[TortElvisII]

No worries with the current inflation rate everyone will be millionaires.

Which begs the question, when will being a millionaire no longer be considered rich? I know some say now but I think we're not quite there. We're very close. Let's say by 2030 at the rate things are going.

 

[funKYcat75]

---
High Schools & Universities.....

They explicitly taught students to be financially irresponsible?

 

[Get Buckets]

Pretty cool that she is doing so well, despite the growing income/debt issues in the country. You almost have to start your own business to make big money any more, unless you’re a doctor, lawyer, or brainiac.

What’s “big money”?

 

[BankerCat12]

There is not going to be a foreclosure boom on houses. 2008 happened b/c everyone was on ARM and there were hardly any regulations on qualification purposes. ARM's are not the norm now and guidelines are tougher to qualify,. Said banker is trying to hard to sound like he/she is important and knows things.

 

[bigblueinsanity_rivals250340]

There is not going to be a foreclosure boom on houses. 2008 happened b/c everyone was on ARM and there were hardly any regulations on qualification purposes. ARM's are not the norm now and guidelines are tougher to qualify,. Said banker is trying to hard to sound like he/she is important and knows things.

I agree there won't be nearly the mortgage collapse of 2008. Now there is a different home crisis in that noone can afford a home. Between inflation and noone stopping the investment funds' mass purchase of single family homes; the prices are astronomical. Add in the massive student loan debt from my above post, and all but the independently wealthy are basically prices out of home ownership.

Now let's look at rent. Landlords just absorbed 12+ months of no rent revenue thanks to the CDC. Now they're faced with big passive increases in property taxes from the market value inflation from the investment fund purchases (mentioned above), cities and states raising property tax rates because those entities can't stop setting money on fire, inflation causing the price of upkeep/repair, and tenants who are pinched for money.

There is definitely a housing crisis just in it's initial stages; but certainly well on its way.

 

[Kingseve1]

What’s “big money”?

I’m not too terribly qualified to say, but I hear cooperate friends of mine bitching about being capped at 90k and another at 150k. Big time docs and lawyers can make big money or around 500k plus. It’s hard to make 500k, unless you own your own business. Not impossible, but you better be one of the best in your field

 

[BallerBegok]

My Dad lost our home because of horrible advice from a banker.

Banker scum told me when I bought a house to get the most mortgage I could get and put that money in the stock market instead of in the house. I had about 80% to put down. I laughed at him. The financial collapse happened a year later. I emailed him about his recommendation and never heard back. People need to understand that when it comes to your money, advisors aren’t trying to help you, they are trying to use your money to help themselves.

 

[BankerCat12]

I’m not too terribly qualified to say, but I hear cooperate friends of mine bitching about being capped at 90k and another at 150k. Big time docs and lawyers can make big money or around 500k plus. It’s hard to make 500k, unless you own your own business. Not impossible, but you better be one of the best in your field

What do you consider big money? I have a lot of clients that are not doctors and lawyers making more money that doctors and lawyers.

Here are some rough estimates on incomes I have seen over the years:

Hospitalist/ER.....125k
Neurologist....800k
Ortho Surgeon...800k+
Pharmacist....90-175k
Principal....110k
Humana/Brown Foreman AVP (Finance, HR, etc and not executive level)...$175k+
Residential lender....1MM+ the past few years
Commercial lender at banks....$100k+
UPS Pilot (out of first year)....$210k. Ones there for awhile are $330k+
CEO/CFO of bank....250k+


These are just examples. I have seen attorneys making less than $100k. No way in hell I would go thru medical school and only earn $125k annually.

 

[bbncal02]

So someone who didn't take a student loan, and probably makes less money, should pay for the poor decisions of college grads? Shouldn't college grads be smart enough to budget their payments?

Shouldn’t bad loan practices also be punished?

**** happens. You know what happened as most millennials were trying to get their lives going?

2008- Great Recession.

You act like every person with student loan debts made bad decisions.

I’ve know a couple of friends that have lost jobs and had to take low paying ones. Guess they should’ve budgeted better?

Stop blaming the common man’s and stick a finger i the face of where it belongs. Predatory lenders and the US government.

 

[bbncal02]

---
High Schools & Universities.....

And here comes the typical blame the teacher garbage.

Maybe just maybe….society is to blame here.

 

[bbncal02]

I could not imagine having that much debt (outside a mortgage loan). It would be suffocating. I can see how the younger generations are struggling to accumulate wealth these days even for those who are responsible with their money. I count myself as very lucky to have gone through college when I did (costs were much cheaper) plus being able to afford a home, etc. at that time. It’s def an issue (those living way beyond their current means) but costs on everything have gotten out of control. We make good money with no debt (except mortgage) and we are feeling the heat with inflation. Gov does not care as they continue to spend money we do not have. It’s a major problem that has no end in sight.

Yep. Just for fun I was looking at home costs in Louisville. There were absolute run down properties going. For six figures. It’s insane. Hell my own city valued my less than 1000 sqft parents home for 100k! It’s unjustifiable insanity!

Rent prices. Out of control. Food prices. Getting there. This is going to lead to another depression real damn quick it it keeps up.

 

[Rebelfreedomeagle]

What do you consider big money? I have a lot of clients that are not doctors and lawyers making more money that doctors and lawyers.

Here are some rough estimates on incomes I have seen over the years:

Hospitalist/ER.....125k
Neurologist....800k
Ortho Surgeon...800k+
Pharmacist....90-175k
Principal....110k
Humana/Brown Foreman AVP (Finance, HR, etc and not executive level)...$175k+
Residential lender....1MM+ the past few years
Commercial lender at banks....$100k+
UPS Pilot (out of first year)....$210k. Ones there for awhile are $330k+
CEO/CFO of bank....250k+


These are just examples. I have seen attorneys making less than $100k. No way in hell I would go thru medical school and only earn $125k annually.

Once heard a hospital administrator say that kids really need to consider their finances before going into some areas. He said there’s GPs paying student loans for decades. He claimed being a PA can be a better financial decision.

 

[bbncal02]

Once heard a hospital administrator say that kids really need to consider their finances before going into some areas. He said there’s GPs paying student loans for decades. He claimed being a PA can be a better financial decision.

Same hospital admin now crying when they can’t find doctors.

Sad.

Jimmy: “I want to be a doctor and help people!”
“Oh Jimmy. you can’t afford it. You’re far to poor for that!”

 

[bkingUK]

If that includes home loans, I’d wager the 1/4th not in debt make the least.

 

[ukalumni00]

No worries with the current inflation rate everyone will be millionaires.

Which begs the question, when will being a millionaire no longer be considered rich? I know some say now but I think we're not quite there. We're very close. Let's say by 2030 at the rate things are going.

Consider this. $1M today was the equivalent to around $1.8M just 20 years ago. So, you need almost $2M today to be considered a millionaire in 2002 terms simply due to rampant inflation. I would say there are few posting here who have at least a million on paper in their retirement and/or investments and do not feel rich by any means. I remember a time that anyone who had a million (in cash or on paper) were living large.

 

[BankerCat12]

$100k annually doesn't get you very far now if you are single. Your take home from that per month is going to be around $4000. If you buy a house for $350k with 10% down, the monthly PITI is going to be around $2200. Throw in any debt (car, credit card, student loans) plus your car insurance, groceries, internet, etc, you are hardly saving anything per month.

 

[bigblueinsanity_rivals250340]

Once heard a hospital administrator say that kids really need to consider their finances before going into some areas. He said there’s GPs paying student loans for decades. He claimed being a PA can be a better financial decision.

It's absolutely a better financial situation. Much shorter school and far less in loans. Plus they can and typically get their loans paid for (depending on geographic area). Far less expense because their managing physician carries all the expense and liability risk.

Plus medicine is intentionally pinching the gas and pushing them out by going with the cheaper mid-level rural clinic approach.

More or less, if a young person wants to be an MD they need to consider a specialty/subspecialty if they want to earn real money.

Part of that is being driven by the health insurance industry. There is a massive amount of prebill and post Bill audits where these companies (including medicare/medicaid) won't pay above mid level reimbursement even if the patient was seen by an md.

 

[Kingseve1]

$100k annually doesn't get you very far now if you are single. Your take home from that per month is going to be around $4000. If you buy a house for $350k with 10% down, the monthly PITI is going to be around $2200. Throw in any debt (car, credit card, student loans) plus your car insurance, groceries, internet, etc, you are hardly saving anything per month.

At 100,000 A year in gross salary, your grossing 8,400 a month. Why would they only take home 4,000 of that? That tax bracket probably averages under 24%, so 2,000/month comes out for taxes. So, even withholding taxes, that person still has 6,400 take home. Shirley, their isn’t another 2,400 that comes out?

https://taxfoundation.org/2022-tax-brackets/

 

[ukcatz12]

Just wanted to point out OP's "in debt" assertion is not accurate. Being "in debt over $100k" is not the same having debts of over $100k. Anyone with a mortgage probably has a debt of at least $100k, but that doesn't mean they're in debt. They (hopefully) have equity in their house and other assets that bring their net worth about the amount of their debts. I feel like the assertion of this post was that 75% of millennials have a net worth of -$100k.

 

[Laparkafan]

Just wanted to point out OP's "in debt" assertion is not accurate. Being "in debt over $100k" is not the same having debts of over $100k. Anyone with a mortgage probably has a debt of at least $100k, but that doesn't mean they're in debt. They (hopefully) have equity in their house and other assets that bring their net worth about the amount of their debts. I feel like the assertion of this post was that 75% of millennials have a net worth of -$100k.

Cost of a house isn’t just the mortgage - insurance/prop taxes/repair/maintenance - some of that offsets the “equity” when you look at the life of home ownership

 

[BankerCat12]

At 100,000 A year in gross salary, your grossing 8,400 a month. Why would they only take home 4,000 of that? That tax bracket probably averages under 24%, so 2,000/month comes out for taxes. So, even withholding taxes, that person still has 6,400 take home. Shirley, their isn’t another 2,400 that comes out?

https://taxfoundation.org/2022-tax-brackets/

it might be $4500 but its definitely not $6400 monthly. You have health insurance and maxing 401K included in the $4000 monthly. Cash on hand doesn't exist in this situation.

 

[HymanKaplan_rivals48997]

Jobless benefits are probably down because they've been used up. And you can make the unemployment rate whatever you need it to be.

Good economy. LOL

 

[cricket3]

Maybe if you’re single. If you’re married with kids it’s closer to 6k than it is 4k.

 

[Dig Dirkler]

Good economy. LOL

Oh, it’s going to get waaaaay better. Paul Krugman says so.

 

[HymanKaplan_rivals48997]

Paul Krugman probably writes his name on his underwear, has an R on the back of one hand and an L on the other, and dips all of his food in Ranch dressing...

 

[WayneDougan_rivals170043]

There are quite a few journalists I’d like to meet in the Octagon. Krugman is near the top of the list.

 

[gobigbluebell]

3/4 millennials about to be IRS agents?

 

[jlynn323]

I'd be fine with doing a partial student loan forgiveness if - and only if - it completely changed the game when it comes to student loans. Meaning you could declare bankruptcy, interest rates would be tied to a risk adjusted ability to pay it back, etc. Let these potential students see their interest rate jump to 15% and tuition prices would drop with a quickness.

Also, colleges should either drop liberal arts and social science degrees or drastically reduce the prices for them because baristas aren't able to pay back their loans.

 

[WayneDougan_rivals170043]

Also, colleges should either drop liberal arts and social science degrees or drastically reduce the prices for them because baristas aren't able to pay back their loans.

I disagree with this statement. Let it just be risk adjusted in terms of getting a loan. For example, if I am an average student who gets a history degree from State U, my borrowing costs will be high. However, let's say I'm a top tier student who wants to go to Yale to major in English. There's a great chance I'm going to go on to Law School or just move into some sort of profession that is lucrative. Right now there's no risk adjustment which is complete crap.