The earliest realizations I had when I was increasing my financial literacy points was that no one working a 9-5 job ever became rich. No old person ever said they were happy about their monthly pensions after retirement. And even the most intelligent achievers in academics fall behind life.
Study hard, graduate, get a stable job, work hard and get promoted to work even harder until you succeed at life and die contented.
This is the worker bee mindset perpetuated through the generations. And I think it's a necessary hope to instill to the younger generation than let them realized the full weight of being an adult in today's current society.
A lot of the financial struggles faced by the common folk have already been decided by their grandparent's financial decisions. Assuming the ones reading this post belongs to the Millenials or Gen Z category, your grandparent's financial decisions already determined the course of your financial health today.
Your grandparents may have bought their house through settling their mortgage but this was a great financial risk for any middle class to commit and it paid off because the housing market today appreciated in value. Your grandparents may have bought the house at 2% interest rate (for example's sake) but inflation rate rose to 4% along with the wages, so not only do they get to keep the asset bought when it was 2%, they also are rewarded for taking the risk. Because everything trended up, it was enticing to take on loans early to buy in assets that appreciate fast in value.
You can't do that today without taking even greater financial risk because the wages didn't keep up with inflation, there is more money circulated in the system that devalued your currency, and there are less cheap house in supply while the rich drive up the prices for these assets cause they can.
The house gets handed down to the children or children opts to buy a house somewhere else. For children that inherited their parent's home, they are left with the choice of selling the asset or living in it which is rent free. Having a house without needing to worry about mortgage reduces the living costs of starting a family and therefore diverts that spending into either buying more assets, essential goods and services, and luxuries. The gamble your grandparents made paid off. Now imagine more families did this and their grandparents had multiple mortgages, the current generation would be considered wealthy by now. This is just simplifying things but imagine if the grand parents were already rich to finance multiple properties and still opted to take in loans, what will happen to their succeeding generation?
I earn more than my dad and grandparents when I was their age and still couldn't afford to buy a home. My peers either bought their homes with mortgages or had wealth handed down by their folks. I'm a one of the top performers in class and in a profession that's ranked 5th or 6th as the top paying profession, my lifestyle is about being thrifty and I still couldn't find it practical to raise a family in today's economic conditions IF I want my kids to have the best. SO imagine a family below the poverty line or middle class just toughening it out.
Whenever my peers ask why I'm still not interested in starting a family, my response is me currently living what is close to financial freedom. I lived with parents that struggled financially and that poverty mindset isn't a healthy mindset to teach kids. My grandparents didn't do well and relied mostly on their government with a stable paying jobs and secured retirement benefits which only felt like egg on their face as their promised benefits couldn't keep up with today's living standards.
A lot of the government employees are like that, the stable job they have and promised benefits gives them a false sense of security. But this is what old people tell the younger generation, work hard and hope by repeatedly head banging the wall of inflation and economic reality would somehow work out for them.
In today's market conditions, savers are being punished because their currency is being devalued. Working hard is slowly losing its significance as society starts banking on a future where AI makes everything efficient that repetitive labor tasks get automated.
A street vendor can sell for an entire day and even open for extra hours into the night and still little. I don't think a lack of hard work is the reason. I think lack of knowledge and available economic opportunities for most people contribute to the wealth inequality. I could just type random garble posts like these for less than 30 min and the potential payout would be equivalent to someone's weekly pay somewhere in a developing nation.
Thank you for your time.
