Each generation shits on the next; as a GenX’er I know this full well. Not every Boomer did this to us, of course, but the ones who shat on my generation did so THOROUGHLY, with great vigor and enthusiasm.
Your turn, Millennials.
Two weeks ago I saw this headline on CNBC: “Millennials don’t like motorcycles, and that’s killing Harley’s sales.”
The gist of the article was that asset management firm AllianceBernstein downgraded Harley-Davidson after a proprietary survey found that Millennials are less interested in owning motorcycles than their generational predecessors. While I don’t doubt AB’s analysts reached their conclusion objectively, the title made it far too easy for readers to infer that Harley’s yet another American institution these phone-gazing children can’t be bothered with.
Because: how the hell can they not like motorcycles?
After I finished the article I found my spirit–shall we say–troubled, so I shucked my shirt and kicked off my sandals and took to my hammock with a cigar and a bottle of Goslings Black Seal rum, and I tried to make sense of it. (The article, not the rum. Goslings Black Seal and I came to a mutual understanding lo these many years ago.)
What got up my ass was a pair of quotes from AB analyst David Beckel.
First: “It turns out millennials don’t ‘live to ride’ like their parents and grandparents did.”
And second: “[We’ve downgraded Harley] based on increased conviction that motorcycle demand in the US is in the throes of secular erosion, combined with weakened conviction in the materialization of near-term catalysts.”
Millennials don’t live to ride. Well…it sucks to have weakened conviction in the materialization of your near-term catalysts, I suppose…but I think Millennials know that even better than Harley-Davidson, and for sure they know what it’s like to be downgraded.
Here’s a thought: what if Millennials don’t buy Harleys because they can’t afford them?
And here’s another: Your failed business model is not my problem.
Anyway, links to three more articles were buried in the “you might also enjoy” section of the page’s footer, and I found each more spirit-troubling than the last. Screengrab:
(By the way, who’s this “Taboola” character? Some guy who sells Moroccan food to Han Solo?)
But yeah, after reading those three articles too, I felt the Harley piece was a clear case of one joke; three punchlines. Let’s discuss.
When wide receiver Ryan Broyles got drafted by the Lions in 2012 he immediately pulled a Rich Dad / Poor Dad. During his contract term he squirreled away at the very least $1.1 million and probably a lot more, then set about living on sixty grand a year so his money wouldn’t run out on him in his old age. The article praised him for his prudence, and I do too.
But this article also made it easy for readers to make a negative inference. Broyles, a Millennial who abruptly got rich, was smart enough to realize he was in imminent financial danger and needed to mend his ways…making him the exception who proves the rule: young people can’t and maybe even can’t be bothered to manage money properly. And when you consider what they blow their money on—what’s this avocado toast I keep hearing about?—there’s little hope they’ll wise up.
Which is nuts. Hang out with any Millennial and chat with her about money, and she’ll be keenly aware she’s in bad financial straits…and that she needs to find A) reasons why, and B) solutions.
I’ll get to reasons and solutions further down, but for the moment we’re left with this question: how sound a financial foundation can you build when you’re broke?
Bureau of Labor statistics show that “the median earnings for full-time workers age 18 to 34 were $35,845 in 1980. By 2000 the same cohort was earning $37,355. For the period of 2009-2013, however, full-time workers between 18 and 34 had median earnings of just $33,883.” 1
And of course blah blah blah covfefe student loans.
So compare all that with Ryan Broyles’s signing bonus…and um…
And, um, the situation is grim. When you see what Millennials live on you start understanding why they’re piling up consumer debt at record rates.2 They’re not just blowing it all on avocado toast…it’s the rent and the gasoline and the navy blue suit and every other ante you have to throw in if you want to play the game at all.
Whether Merck engages in ripoff drug pricing or not, Jim Cramer’s broadside at Trump was one more reference to the fact that the exponential inflation of healthcare costs is sandbagging the financial well-being of Millennials (and everybody else), is gonna keep doing so for the foreseeable future, and might very well perpetuate itself into succeeding generations.
Which is why Bernie Sanders dominated the Millennial vote.3 Millennials cast more votes for a, quote, socialist than for Clinton and Trump combined…a watershed event, and one that’s at the very least a sign that they understand the pressure they’re under and are politically aware enough to try to find legislative relief.
Even if they’re still learning how and where from.
Man…I caught an op-ed piece The Atlantic ran back in 2014; the theme of which was that Millennials’ political views are basically incoherent.4 When I looked it back up I found the lede especially provocative–as all good ledes should be, I guess:
“Millennial politics is simple, really. Young people support big government, unless it costs any more money. They’re for smaller government, unless budget cuts scratch a program they’ve heard of. They’d like Washington to fix everything, just so long as it doesn’t run anything.”
Which is to say: they’re just as bad at civics as they are at personal finance. There followed a lot of survey data to that effect.
Hang out listening to conversations at any Denny’s for a half-hour and you’ll realize that Millennials’ beliefs might be oxymoronic, but they’re also learned. You could swap ”Baby Boomers” or GenX’ers” for “Millennials” in that lede and you’d still be spot on. Dig into statistics—as we have been and will again—and you’ll see how much intergenerational projection there is in all this. Which is just as true for finance and it is for politics.
Speaking of which: the explosion in healthcare costs seems to have led me into politics, and politics isn’t the point of this article. AT ALL. I already regret mentioning it.
So let’s not mention it.
The point of all that was, I think, that nobody who leases a Harley oughtta dog the guy who spends all night outside the Apple store waiting to put the new iPhone on his credit card.
When you review the last forty years of economic history, you’re confronted with the eighties recession, the savings and loan crisis, junk bonds, the dot com bubble, and the housing crisis. Boomers and GenX’ers start looking like a bunch of rodeo goats…not who you’d want to follow into the ring. Sure, there was a seventeen-year boom lodged in there, but “irrational exuberance” milked it dry, and little of the subsequent recovery has trickled down to anyone younger than thirty.
In other words, we the older generations haven’t exactly done a good job teaching the younger one about finance. We don’t talk it and we don’t live it. So until we do better at prioritizing the subject in our schools—hasten the day, Lord, hasten the day—let’s not write Millennials off as a pack of dunces just yet. They themselves obviously bear ultimate responsibility for their own educations, but look at what we’ve given them to work with.
Let he who hath no shit on his own shoes walk on the white carpet.
Article #3: “Here’s how much you should have saved by thirty-five.”
“By 35, you should have the equivalent of twice your annual salary saved if you plan to retire at 67 and live a similar lifestyle.”
“That’s twice as much as the amount you should have at 30, the equivalent of one year’s salary.”
That’s from Fidelity Investments.5 Somebody in The House That Lynch Built has cooked up an interesting retirement savings guideline. Viz.:
“Aim to save at least 1x your income at 30, 3x at 40, 7x at 55, 10x at 67.”
I think that’s a misstatement; I think what they mean is “aim to HAVE SAVED at least 1x your income at 30,” etc. And by “income” do they mean salary or take-home pay? But when I look at the data I can get behind those recommendations, if for no other reason than having 10x the annual cost of your lifestyle by age sixty-seven is better than having 5x or none at all.
First of all, nobody–not Boomers, not GenX’ers, not Millennials–is hitting Fidelity’s targets. It’s as simple as this infographic published by Time Magazine:6
And second, it’s reasonable to believe a consequence of this trend is that Millennials will have to delay retirement until they’re well into their seventies.7
Again, grim stuff. But we KNOW all these problems exist, and Millennials understand that they’re both complicit in them and responsible for finding solutions.
So what are those solution(s), anyway?
As an advocate of financial independence and early retirement, I expect more and more Millennials to turn away from the birth/school/work/death model–i.e., spending most of their time here on Earth setting up a “similar lifestyle” in a traditional retirement. And I think they’ll gravitate to a concept known as “LeanFIRE.” I say that because the long-term risks of a lean but early pseudo-retirement are preferable to many over…oh…the long-term risks of spending fifty years in a miserable job…and that’s a belief we know Millennials are receptive to.8
In case you’re not familiar with LeanFIRE, let me explain.
A point that’s always underlain my work is that in the financial independence / early retirement movement we lean too much on the financial independence leg. Which I’m fine with, of course…there’s nothing like having “fuck-you” money as an antidote to the toxicity of our workplace and consumer cultures.
Don’t forget, however, that fuck-you money is a variable rather than a constant. Two million is great, but ten bucks can also be fuck-you money with the right kind of mindset. And you may not even need the ten.9
Hear me, O Millennials: granted that not everybody’s set up for that kind of lifestyle. But there’s still a decent shot that you can engineer yourself into a situation where you can dial your worklife way down before age fifty and possibly as early as your late twenties by finding the right combination of philosophy, frugality, self-reliance, passive income, and pleasant part-time work that allows you be freer, feel more financially secure on less income than you imagined possible, and in fact to be happier than you’ve ever been.
(Jeezum crow, what a miscarriage of a sentence. It’s this devil rum, I tell you.)
But pushing on: leanFIRE has been, and continues to be, exhaustively discussed on Reddit. Have a look at this list of forums, AKA subreddits. Each falls under the LeanFIRE umbrella, and all are worth your attention. Call up a new window and see.
If you don’t know Reddit, simply enter into your browser “reddit.com” followed by the name of the sub you’re interested in…e.g., reddit.com/r/financialindependence.
And once you thoroughly understand LeanFIRE and have maybe even committed to it, anytime anybody implies you’re financially incompetent, you’ll be able to roll your eyes and shake your head and think, “Well, bubba, what are YOU working towards?”
To sum up…remember those stats I cited about the average starting salary Millennials can expect? Let’s not diss somebody with low income and/or low income potential for failing to manage money like they’re a professional football player.
Because by doing so you’re falling into the “If you’re poor if it’s your own fault” trap without admitting there might also be systemic problems in play—the same ones affecting every one of us, in fact, and not just Millennials. Isn’t that argument a little simpleminded?
Dude, we’re ALL screwed unless we work together.
And so much for that. Just remember that Boomers and GenX’ers alike are pressuring Millennials to simultaneously:
1. Engage in heavily materialist practices like buying high-end motorcycles with borrowed money,
2. Emulate anyone whose freakish success has guaranteed them a shot at financial respectability,
3. Meet retirement savings targets that not even the average Baby Boomer can, and
4. Do all the above in an economic environment that’s hostile to young workers.
No wonder Millennials feel shit on.
But not by me, man. As a member of a generation that had it much easier, I’ll fling participation trophies at Millennials like confetti at a wedding…because from where I swing in this hammock, it looks like they’re still showing up to a game that’s completely rigged against them.
So enough with the condescension. Because when your message to an entire generation is that they’re a bunch of lackadaisical entitled snowflakes unless they consume all they can while at the same time saving everything they make–and without complaining about it, to boot–well, maybe they can’t afford to flee that noise on a Harley, but they’ll for damn sure tune you out with their phones.
If you’re interested in making money off this intergenerational covfefe, my friend Gwen at FieryMillennials.com recommends the following book: Upside: Profiting from the Profound Demographic Shifts Ahead.
Also, thanks to Gwen and Julie at MillennialBoss.com for reviewing the first draft of this article.