Hey, everybody, so today we're going to talk about why millennials are broke
and my nickname for millennials and the next generation are Henries,
which are high earners, not rich yet.
At the time of this video, millennials are about the ages of 25 to 40.
And the truth is, millennials,
especially toward
the upper end of the range, are running out of time to build wealth.
Currently, millennials own five percent of the wealth in this country.
But the shocking data is that millennial parents owned about twenty
two percent of the wealth when they were the exact same age.
That means that they had four point five times the amount of overall wealth
than their children in the same age groups.
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So what is the real issue here?
Why are millennials falling behind? So I'm going to go over for reasons.
The number one is student loan debt.
Now, this is not a surprise to anybody.
I had student loans when I was in school, and I've said it before
and I'll say it again.
The thing that sets most millennials back the most is their student loan debt.
What I believe earns you more money is learning a valuable skill.
You can do that through college, but you could also do that through
a number of other ways that are obviously a lot less expensive.
Currently, the average student loan sits around forty thousand dollars
per student with many students well over that amount.
And that forty thousand dollars over time could have been used to purchase a home
or even invest it.
And in many cases, it's hindering people from actually buying things
once they get out of college.
And college, of course, just keeps going up and increasing over a 10 year period.
College tuition has gone up 65 percent, while wage growth
has only went up about 26 percent during the same period of time,
creating more and more and more of a hardship to get these loans paid off.
With college prices increasing so much faster than wage
growth, attending college and taking on loans is really a decision
that you're going to have to thoroughly consider now and of course, in the future.
Number two, credit cards and other debt credit
cards were not always the popular way to pay for things.
20 years ago, about a third of the population didn't even have a credit card.
Now credit cards are a commodity item.
Everyone has them.
And while they can be used responsibly, many times
people can accumulate debt from using them.
Millennials in particular have on the average four thousand dollars
in credit card debt.
Right now, these cards come with an extremely high interest rate,
and they're really prohibiting millennials from learning on
how to budget their own money. The third one is home ownership.
And you guys probably know homeownership
is definitely down for this generation.
And as I have done four videos on previously, I think the American dream
of owning a home is getting harder and harder to achieve.
Home prices are skyrocketing and the government is only making them
increase faster with low rates and incentive programs.
And now, of course, with all the construction costs and labor
going up, it's becoming even harder to put things in perspective.
Only about forty eight percent of millennials actually
own a home, while at the same time, the boomer generation,
which are their parents, was it about seventy seven percent?
That's a big, big difference.
So why make such a big deal out of homeownership?
Well, owning a home is a big deal when you are discussing becoming wealthy.
There are a couple of reasons for this.
First of all, getting a fixed rate mortgage on a home will allow you to lock
in a set payment over a 30 year period that will hedge inflation.
You can never do this by renting.
Renters typically have annual rent increases on their rent.
This locked in rate allows any additional money you earn at work
to be able to be invested versus going toward those rental increases.
Secondly, most retirees have almost all of their money in their home,
and that home appreciates generally over time, and
they're paying off the mortgage each and every month.
So the principle is actually going down.
The average home has increased thirty two percent over the last 20 years.
That means when a retiree goes to downsize, they have increased
their cash passively in their home by approximately thirty two percent.
Lastly, into retirement, that home can be paid off.
This is a big deal for retirees.
It was certainly the case from my own mother,
who had not a lot of cash, but had a lot of equity in her home
and actually used it to pay for her next step.
A paid off home means you don't need much money to live on
as a lifelong tenant into retirement.
You will need to continue working or have roommates to work.
Within a Social Security budget,
the last thing is millennials aren't even investing.
And if you're not going to invest in something, there's no way
that you're going to stay ahead of the inflation
or become wealthy over a long period of time.
And I understand it
because they just don't have a lot of excess discretionary funds to do it.
So they're not even learning.
And to start. Millennials are on a much tighter budget
than previous generations due to these inflation versus wages.
So wages have gone up by only 10 percent in the past 20 years.
While in that exact same time period, inflation has gone up 44 percent.
And in the last few months, it's gone up even more.
So this puts a massive squeeze on millennials bank account
and their ability to save to invest, because that money that they're saving
actually buys less from a purchasing power.
Secondly, the millennial generation isn't good at budgeting.
Now, I wasn't really that great at that age as well, but I had to learn it.
Previous generations had to save for things
because they didn't have a credit card.
But millennials can purchase something without having the money, making them
more in debt, but also less accountable for their own money.
Now, this channel, as you guys know, isn't about complaining and being victims.
This channel is to empower you so you can become a wealthy millennial.
I've done many videos on how to budget and learning out how to invest on
castling properties, and we'll attach them below in the show notes.
While many of the millennials are broke, you don't have to be,
but you can't put off correcting your financial future.
These decisions need to start today.
It is going to be a tougher and tougher road ahead for you and this next economy.
And you need to understand how you can get ahead.
Start with learning how to budget and save money.
And then what to do with that money.
I have attached the videos below so you can get a head
start on your investing and your own financial education.