It's difficult to overstate just how badly the Millennial generation are doing relative to their Baby Boomer parents. Regardless of the financial or economic metric you look at, the outlook is grim. A recently released report, using data from the Federal Reserve (and therefore, highly likely to underestimate the magnitude of the problem) is only the most recent confirmation in what is beginning to feel like one of my most frequent complaints about the current financial system.
Net worth is as "good" a place as any to start. Using the Fed's own numbers, Millennials are worth only $10,900 compared to Boomers' $25,035 at the same age. That's almost 150% more for the Boomers, and holy hell is the outlook bad when you correct for a realistic inflation rate. Boomers were probably worth more than triple, or even quadruple, in real goods at the same age as Millennials today.
That's not too surprising when you consider how annual expenses work and look at the difference between Boomer and Millennial salaries in 1989/2013. Boomers made $50,910 annually vs. the Millennial's $40,581 in 2013. Let's not even get into the difference in real purchasing power we'd see if we corrected for a non-hedonically adjusted inflation rate.
"But Lexiconical," you stammer, "aren't the Millenials a better educated generation, going to college and graduate school at record rates? Won't this long-term approach result in the tortoise overtaking the hare in the long race of like?"
In a word, no. This whole "education" story you've been sold recently is a bunch of hooey. Despite the massive amount of student loans this generation has been forced into on the railroaded-path to permanent financial servitude, we are still making substantially less in 2013 than Boomers were with similar credentials. Millenials with degrees averaged $50,000 - better, but still less than the average Boomer, most of which had no degree.
This just drives home a point I was telling students a decade ago - today's Bachelor's Degree is yesterday's High School diploma. Little did I know I was actually under, not over, selling the magnitude of the degree inflation caused by shoehorning endless students with no long-term plan into six-figure debts for Macrame and Gender Studies degrees.
It's no surprise that cryptocurrencies are most popular with the Millenial group. They are the ones most in desperate need of an escape from the fiat-inflation value extraction cycle perpetuated by most corporations mainstream governments.
I guess this is where one might say "buy Bitcoin."
The effects on the global, US $ based financial system when Millenials are expected to take over the crown of "economic core/primary spenders" are going to be disastrous. The money simply won't be there.
It will either be gone, or on a public ledger somewhere, in blockchain form. Bad news for future Bear Stearns/Lehman Brothers 2.0.
Disclaimer: This is not financial advice and I am not a financial advisor.
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Sources: Google, Young Invincibles.org, US Census, US Federal Reserve, Fortune, ZH
Copyright: YoungInvincibles.org, TheCollegeInvestor.com, Reddit