Half of Millennials Are Delusional About Money

[DSmith21]

• New study finds that 53% of Millennials believe they will one day be millionaires
• Nearly 1-in-5 report that they they still rely on their parents for financial support
• They expect to retire at 56, though won't start saving for retirement until age 36

Today there are only about 10 million millionaires out of a population of 300 or so million. So that is 3%-4% who have a million dollar worth (not +50%). Further, 80% of millennials aged between 25 and 34 have less than $10,000 in savings and 40% have none. These people better pick up the pace or that $1 million is never going to happen let alone retiring at age 56.

http://www.dailymail.co.uk/news/art...millionaires-someday-according-new-study.html

https://www.cnbc.com/2017/09/14/how-much-money-the-average-millennial-has-in-savings.html

 

[dgtatu01]

As responsible as other generations of Americans are about saving money this is really shocking to me.

 

[Sawnee Cat]

Proof the dumbing down of America is a fact

 

[Rex Kwon Do]

yikes

 

[TruBluCatFan]

Proof the dumbing down of America is a fact

Maybe. Most young people, in most generations, overestimate the amount of success they will have.

 

[WayneDougan]

I would hope most young people think they will be millionaires. Can you imagine being in your early twenties and thinking, “boy, I bet I’ll be making $40K per year for the rest of my life”?

People have dreams; nothing wrong with that at all.

 

[Rex Kwon Do]

I would hope most young people think they will be millionaires. Can you imagine being in your early twenties and thinking, “boy, I bet I’ll be making $40K per year for the rest of my life”?

People have dreams; nothing wrong with that at all.

I agree with what you’re saying, but it’s kinda more the attitude that millionaire status is going to fall into their lap that’s off putting. For most of them, what’s their plan?

 

[CatOfDaVille]

It's all about compound interest. If they make $50k/yr and start saving for retirement at 25, they'll get to a million no problem.

The issue of course is that by the time they retire, a million won't be worth as much as it is today. I'm hearing more and more that 2 million is becoming the new magic number for retirement.

 

[ukalumni00]

Hate to say it, but it is not just Millennials who have money issues. Large number of Americans are flat out broke and in debt. Most of my family (all age brackets) have nothing in savings, hardly anything in retirement, and have massive debt (car, credit cards, etc). Several of my friends are in the same boat.

Seeing that Social Security is looking to implode in about 16 years, going to be a day of reckoning for a lot of people down the road.

 

[kev69]

The Millennials continue to confirm they're the worst generation.

 

[DSmith21]

It's all about compound interest. If they make $50k/yr and start saving for retirement at 25, they'll get to a million no problem.

The issue of course is that by the time they retire, a million won't be worth as much as it is today. I'm hearing more and more that 2 million is becoming the new magic number for retirement.

Except according to the survey, they don't plan on starting to save until their mid-30's and they plan to retire a full decade before they reach social security age. Add in their high student debt load and the vast majority of this generation will not get to $1 million compounding interest or not.

 

[qwesley]

People have dreams; nothing wrong with that at all.

Depends on the dreams and who is paying for them.

 

[BankerCat12]

Its very sad. In my line of work, I see it all the time. Millennials cannot save anything if their parents did not help or pay 100% of their college tuition. Obviously there are few that are doing very well but its few and far between. Imagine coming out of school with good credit but some debt.

$40,000 annually = $3333 gross monthly.
To buy a house, the DTI typically needs to be 45% or less. This example gives you $1499 in total debt.

Loan on car..$300 a month
Student Loans..$200 a month
Credit cards...$75 minimum monthly
$575 in current debt monthly

You cannot qualify for a mortgage unless your monthly payment is $924 or less. This will allow you to buy a house for $125,000 with 5% down. Not sure where everyone here lives, but the Louisville market is insane right now and the areas you can find houses at this price point you don't want to really live there.

Keep in mind, you can use 45% of your gross pay. So these kids still need to pay for car insurance, cell phone, groceries, etc after their taxes are taken out of each pay check. They cannot save a penny right now.

Its a great time if you can find a good deal to get into investment properties. Hard to find a good deal but millennials make it easy to rent.

 

[GonzoCat90]

1. Who taught them?

2. Who created the financial world they're living in?

3. Everyone thinks they're going to be successful when they're young.

4. How much does the average 50-year-old have saved up, what's their debt, etc? Most people are stupid and awful with money.

I hope the next thing millenials "kill" are these stupid articles written about them every week.

 

[CatOfDaVille]

Except according to the survey, they don't plan on starting to save until their mid-30's and they plan to retire a full decade before they reach social security age. Add in their high student debt load and the vast majority of this generation will not get to $1 million compounding interest or not.

Missed that part. Yeah, they're pretty delusional then.

 

[WayneDougan]

I agree with what you’re saying, but it’s kinda more the attitude that millionaire status is going to fall into their lap that’s off putting. For most of them, what’s their plan?

Yeah, but even this isn't something unique to millennials:

• When I was ten, I "knew" I was going to play Major League baseball.
• When I was 18, I was sure I was going to be a millionaire when I was 25.
• When I was 23, I was sure I was going to be a big-time CEO

I'm in my late 30's now, and I still have big dreams for my career. But I've learned how to set goals and plan for making them. It took me a while to learn how to do it. I assume the same will apply to them.

That said, there are fools in every generation who don't realize a good career path when they find it, and float around until they're 35 and realize they have no skills. Perhaps millenials do this a little more than previous generations.

 

[gobigblue812]

It's all about compound interest. If they make $50k/yr and start saving for retirement at 25, they'll get to a million no problem.

The issue of course is that by the time they retire, a million won't be worth as much as it is today. I'm hearing more and more that 2 million is becoming the new magic number for retirement.

The problem is that many of them aren't saving at all.

 

[VT/UK Rondo]

Life kicks everyone in the nuts.

 

[WildcatfaninOhio]

Those young’uns should study how our federal government budgets money, spends less than they bring in, and never ever run up huge debts.

 

[WayneDougan]

Those young’uns should study how our federal government budgets money, spends less than they bring in, and never ever run up huge debts.

Counterpoint: the federal government can print money

 

[UKGrad93]

More proof that we don't do a good job of teaching math in this country.

 

[dgtatu01]

Missed that part. Yeah, they're pretty delusional then.

Except 20 years ago there were 40 year old boomers planning to start saving for their retirement in their 50’s.

 

[ndk]

It's more than just a "math" problem. Yes, the mathematics of it are simple: spend less than you make and save some money. The heart of the issue is having the discipline to do that. The discipline to say, "No, I can't drop several hundred dollars and go on this weekend trip with my friends." Or, "No, I can't keep spending 1/4th of my monthly income on this really awesome car in my driveway." Or, "No, I probably shouldn't spend a thousand dollars going out to eat this month."

Consumer debt (primarily car loans and credit cards) absolutely suffocate your ability to build wealth.

And it ain't just millennials. "Keeping up with the Joneses" is as old as time.

 

[IdaCat]

What do you expect? We're talking about a generation who eats soap and snorts condoms for likes on YouTube, thinks there are infinite genders, and wants a separate restroom for each.

 

[fuzz77]

Being a millionaire isn't what it used to be and with inflation it will mean even less. For someone who is currently say 22 yrs old just out of college and earning $40K, and sees a 3% salary bump each year... By the time they are 65 yrs old they are earning $142,580.
If starting at 31 yrs old they save 10% and do so until they are 65 they will hit millionaire status assuming a 7% ROI.

However... if they start saving 5% at 22 and never increase that rate they surpass $1 million at 60 yrs old and have $1.55 million at age 65.

My employer matches the first 5% dollar for dollar so you're crazy not to save a minimum of 5%...but I know of some who don't. A gal on my team who just turned 40 and earning $100K has confessed to me that she doesn't participate in the 401K and doesn't have an IRA...but she drives a nice car...leased of course. When I reminded her that she is just pissing away a free $5K/yr she just shrugged her shoulders.

I've recommended to all of my kids to save at a minimum whatever their employer will match and then sign up to automatically bump their savings 1%/year until they at least reach 15%. Since they all asked me to help them decide what to do with their 401K I know that they were all setup to do so...if they change it, that's on them.

 

[Xception]

Ultimately some turn of events will diminish America’s global stature and the dollar will have the value of a peso, live in the now

 

[fuzz77]

I might add that the parents of millennials are also partly at fault for not saving for their children's college education and thus requiring the children to take on debt to go to school. Add again that the entire federal student loan program make way too much money available putting kids in deeper debt than they have any business being. The fact that most all, if not all students are required to fill out a FASFA each year and from that you are offered student loans regardless if you need them or not. Too easy for a kid to accept that $20K/yr in loans not thinking about the consequences down the road.

 

[d2atTech]

The study itself is stupid. Not surprised TD Ameritrade published it, since they have a lot vested in presenting that viewpoint.

It's less about the millennials being a generation that doesn't save, and much more about the focus on immediacy of rewards as a culture. In my experience, the immediacy mentality is pervasive with every age group.

With that said, I want my damn No. 9! It's been six years!!

 

[rbs]

Given time and inflation would not be at all surprised if a fairly high percentage of people aren't millionaires. The problem is, in 30-40 years having a million dollars isn't going to be very much to live off of.

 

[mailman85]

 

[Willy4UK]

Brady will be a multi-millionaire off the compounded interest from the $1000 dollars that fuzz has YET to pay.

 

[jcrow10]

EVERY GENERATION AFTER ME SUCKS!1!!!!11!!

 

[Mashburned]

Yea but they got millions invested in potcoin.com

 

[Col. Angus]

Kids are stupid.

 

[jcrow10]

Kids are stupid.

Most people are stupid.

 

[JumperJack]

Yeah, but even this isn't something unique to millennials:

• When I was ten, I "knew" I was going to play Major League baseball.
• When I was 18, I was sure I was going to be a millionaire when I was 25.
• When I was 23, I was sure I was going to be a big-time CEO

I'm in my late 30's now, and I still have big dreams for my career. But I've learned how to set goals and plan for making them. It took me a while to learn how to do it. I assume the same will apply to them.

That said, there are fools in every generation who don't realize a good career path when they find it, and float around until they're 35 and realize they have no skills. Perhaps millenials do this a little more than previous generations.

I try to be open minded about them also. I think that’s a good trait. But the ones I’ve hired the last few years, more and more, seem to think that a deadline is more of a suggestion, that advice is just noise, and that missing work is normal. I can’t imagine previous generations were like this. Maybe they were.

 

[Col. Angus]

Most people are stupid.

sad, fat, stupid world we live in.

 

[UKBrassowTipIN]

Theres no money for them...baby boomers were completely irresponsible and blew it all. Just look at govt...full of baby boomers and they cant even balance 9 trillion dollars a year.

 

[d2atTech]

I try to be open minded about them also. I think that’s a good trait. But the ones I’ve hired the last few years, more and more, seem to think that a deadline is more of a suggestion, that advice is just noise, and that missing work is normal. I can’t imagine previous generations were like this. Maybe they were.

While that might be true, let me give you the flip side. I’m a mellenial, and I’ve noticed a different trend in the folks I’ve hired: they treat deadlines as the end all and rush to get things done. The product they put forth sacrifices quality for deadline. It’s an aspect I detest.

However, older employees tend to have better intuition. They ignore deadlines to solve the most important tasks that are immediate. In this case, experience is underrated.

 

[UK_Norm]

The problem is that many of them aren't saving at all.

But how can they save? Given their low wages,the cost of living, and the amount of student loans they have?

I think that most millennial are actually being smarter with their money. Business websites are putting out “millenials killed the ______ industry” articles on a daily basis.