During the financial crisis, the media trashes the Millennial Generation as if we’re Cinderella. Living under the wrath of a cruel stepmother and devious stepsisters.
Most recently, an article written by The Wall Street Journal is slamming Millennials in regards to our finances.
I respectfully disagree.
No matter where you are in life, there are always going to be haters that are pushing you down. Now, we’re in the point in time where the Millennials are the scapegoat of America.
Here are 4 reasons why Millennials aren’t in as poor of a situation as people make it seem:
1. The Virus is Affecting Everyone.
Whether you’re 22 or 122, this “new normal” is affecting everyone. Whether it’s an upcoming wedding or being let go from a job, everyone is feeling the pressure. Despite the challenges of 2020, eventually, a vaccine will be discovered, unemployment rates will normalize (over time), and the world can continue advancing.
Recessions are normal, they ensure the economy is like Goldilocks and the 3 bears. The economy can’t grow too fast, it can’t grow too slow, we need to grow at a rate that is JUST right
2. MILLENNIALS HAVE MORE TIME TO MAKE UP THE SHORTFALL.
Being that Millennials have a longer time horizon, they can assume more risk to make up their current savings shortfall. Millennials are classified between the ages of 22-38, which means some of us are just entering the workforce, while others are entering their peak income-earning years.
In short, this will give the opportunity for the younger Millennials to find a career they’re passionate about and give the older Millennials an opportunity to increase their savings while taking advantage of a down economy
We’ve all heard the quote,
“buy low, sell high”
3. Millennials Have Less Money than Older Generations.
Assuming that someone who is retired has more assets then a Millennial, the fluctuations of the stock market will affect them greater than Millennials. It’s much less painful for a Millennial who loses 50% of their $10,000 retirement account than a retiree who loses 50% of their $500,000 retirement account.
$5,000 is much less than $250,000.
4. Retirees on Fixed Income are Suffering the Most.
Entering into retirement, most portfolios are deleveraged to have an allocation that is less than 100% invested in the stock market. With interest rates being pressed down to historic lows, this presents a problem for retirees living on a fixed income. They aren’t able to make up the entire shortfall on bonds alone, so this may force them to take extra risk by having to invest in the stock market.
Despite being in a more “secure” financial situation than their Millennial counterparts, being they are retired, puts them into a quagmire. Do they invest in the stock market? Do they invest in the bond market? Do they sell everything and stuff it under their mattress?
Joshua Krafchick, AKA “CHACHI”