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Your sneaking suspicion is correct for baby boomers and gen X: http://www.pewtrusts.org/en/about/news-room/press-releases/2014/09/18/pew-finds-generation-x-faci

Your sneaking suspicion is correct for baby boomers and gen X: http://www.pewtrusts.org/en/about/news-room/press-releases/2014/09/18/pew-finds-generation-x-facing-an-insecure-financial-future http://www.pewtrusts.org/en/about/news-room/press-releases/2.... "Gen Xers have less wealth and six times more debt than their parents did at the same age," despite having higher salaries. I think you're right to be concerned. Not being able to strike out on your own delays family formation, which leads to some attrition of people who never have children for financial reasons. This decreases the birthrate and then on top of the working generation supporting members within its own cohort, they also have to support an older generation of retirees with an ever rising dependency ratio. It's a negative feedback loop that countries like Japan, Germany, and Italy are stuck in. Both the education and housing problems can be solved. Education can be automated and amateurized using technology, and more housing can be built. Both of these would do a lot to decrease youth debt loads. Medical price inflation is the tougher problem but is less pressing for young people. Eventually we will be old though and then it will hit like a ton of bricks for those unlucky enough to have not accumulated wealth.

ap22213 10y ago
This was surprising: "Among Gen Xers who have exceeded their parents’ income, those with college degrees are less likely to surpass their parents’ wealth, mostly due to student loan debt."
- ryandrake 10y ago
  Gen X here, just turned 40. If you compare how I'm doing with how my parents (who were solidly middle class) were doing, it's not even close. At 40, they had multiple homes, were secure in their savings and retirement through generous pensions, and practically debt free. This was on school teachers' salaries! Me? Student loan debt set me back years, crippling housing costs, and a crappy 401(k) that is probably worth around what I put into it due to multiple deep recessions during my prime working years. I can't even begin to imagine how bad it is for you under-30s! This is not sustainable. All the value captured through productivity increases is being captured by shareholders and asset owners now rather than the working class.
  - ctchocula 10y ago
    If you put your money into an S&P 500 index fund in 2006 and reinvested dividends every distribution, you would have 6.89% annual return even taking into account recent recessions. In other words, if you had $10,000 in your 401(k) in 2006 and stopped adding any payroll to it, it would be worth over $19,000 now. If your 401(k) isn't in an index fund, it might be worth switching it into one rather than keeping it in a managed fund that charges higher expense ratios, but has worse returns.
  - ixacto 10y ago
    Student loans are stupid unless taken for CS or Medicine. Otherwise the military or community college is just fine. Don't follow your passion unless you have a trustfund with >1mm and can pay for college. It's not that hard, you put 23k/yr total in the roth IRA & Roth 401k in VFIAX. I do not work in the tech industry anymore and am still doing this, just stop eating out, live cheap. Compound this over 40-45 years and you and I are multimillionares.
    - Frondo 10y ago
      The military is fine until you're sent to Afghanistan and you're assigned to missions where you end up killing people. They're dead, and you're messed up for a long, long time. Happened to a couple friends of mine. One of them is de facto permanently disabled (though refuses help from the system itself), bounces from one job to the next, spends every waking moment high, because of the things he did over there. As for the rest, asking someone to live cheap until they're 65, as a way to compensate for systemic malfunction, ehh...nope, let's get political and fix the system.
      - ap22213 10y ago
        Many of my friends and some relatives joined the armed forces in the early 90s. The world seemed relatively safe then, trending upwards, and it seemed like a stable path to a middle class life. Then the never-ending wars came. And, many of these people now have serious injuries and most have PTSD. They came back changed. Now, I would never let a relative join the armed forces. Maybe it was a heroic thing to do at one point; I don't know. But, nowadays they're exploited and used carelessly for missions of dubious purpose.
- shams93 10y ago
  Its called loan consolidation, take a set of loans that total say 70k and get talked into consolidation before you develop math skills and with deferments to deal with the regular boom bust cycle of layoffs over 20 years and that blows up into 400k easily, I've seen it first hand. Mine are paid off but if I had free education or skipped it, I'd be wealthy. Instead I'm broke but my loans are paid off. But it took an insane effort over 20 years to do it, that could have gone into starting a successful company instead of feeding the federal government for a service that costs $0 in other countries. My dad didn't have my education or skills, but he got a job working for the federal government and was shielded from the up and down of the economy. His education was paid for, his home loan was 12k. But he had things too easy and now he has dementia lol.

ap22213 10y ago

This was surprising: "Among Gen Xers who have exceeded their parents’ income, those with college degrees are less likely to surpass their parents’ wealth, mostly due to student loan debt."

ryandrake 10y ago
Gen X here, just turned 40. If you compare how I'm doing with how my parents (who were solidly middle class) were doing, it's not even close. At 40, they had multiple homes, were secure in their savings and retirement through generous pensions, and practically debt free. This was on school teachers' salaries! Me? Student loan debt set me back years, crippling housing costs, and a crappy 401(k) that is probably worth around what I put into it due to multiple deep recessions during my prime working years. I can't even begin to imagine how bad it is for you under-30s! This is not sustainable. All the value captured through productivity increases is being captured by shareholders and asset owners now rather than the working class.
- ctchocula 10y ago
  If you put your money into an S&P 500 index fund in 2006 and reinvested dividends every distribution, you would have 6.89% annual return even taking into account recent recessions. In other words, if you had $10,000 in your 401(k) in 2006 and stopped adding any payroll to it, it would be worth over $19,000 now. If your 401(k) isn't in an index fund, it might be worth switching it into one rather than keeping it in a managed fund that charges higher expense ratios, but has worse returns.
- ixacto 10y ago
  Student loans are stupid unless taken for CS or Medicine. Otherwise the military or community college is just fine. Don't follow your passion unless you have a trustfund with >1mm and can pay for college. It's not that hard, you put 23k/yr total in the roth IRA & Roth 401k in VFIAX. I do not work in the tech industry anymore and am still doing this, just stop eating out, live cheap. Compound this over 40-45 years and you and I are multimillionares.
  - Frondo 10y ago
    The military is fine until you're sent to Afghanistan and you're assigned to missions where you end up killing people. They're dead, and you're messed up for a long, long time. Happened to a couple friends of mine. One of them is de facto permanently disabled (though refuses help from the system itself), bounces from one job to the next, spends every waking moment high, because of the things he did over there. As for the rest, asking someone to live cheap until they're 65, as a way to compensate for systemic malfunction, ehh...nope, let's get political and fix the system.
    - ap22213 10y ago
      Many of my friends and some relatives joined the armed forces in the early 90s. The world seemed relatively safe then, trending upwards, and it seemed like a stable path to a middle class life. Then the never-ending wars came. And, many of these people now have serious injuries and most have PTSD. They came back changed. Now, I would never let a relative join the armed forces. Maybe it was a heroic thing to do at one point; I don't know. But, nowadays they're exploited and used carelessly for missions of dubious purpose.
shams93 10y ago
Its called loan consolidation, take a set of loans that total say 70k and get talked into consolidation before you develop math skills and with deferments to deal with the regular boom bust cycle of layoffs over 20 years and that blows up into 400k easily, I've seen it first hand. Mine are paid off but if I had free education or skipped it, I'd be wealthy. Instead I'm broke but my loans are paid off. But it took an insane effort over 20 years to do it, that could have gone into starting a successful company instead of feeding the federal government for a service that costs $0 in other countries. My dad didn't have my education or skills, but he got a job working for the federal government and was shielded from the up and down of the economy. His education was paid for, his home loan was 12k. But he had things too easy and now he has dementia lol.