Millennials Are In Serious Financial Trouble

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On average, millennials earn less, spend more, and build very little equity – even into their 30’s. This is why I believe that millennials are in serious financial trouble.

According to Avant.com (see the awesome graphic below), the average millennial earns approximately $30,000 a year compared to an average of $50,000 for the typical American. Millennials are very obviously earning less.

Millennials are also taking on more debt than average – which is mostly due to the rising cost of higher education and the ridiculous simplicity of taking on student loan debt. The most recent 2015 grads took on….(drum roll)….$35,000 of student loan debt to get through college. Furthermore, because of the large debt payments that they’re faced with after graduation, millennials typically have very little in savings, which causes a need for personal loans….which only increases their financial woes. Millennials are very obviously taking on more debt. 

Since millennials are earnings less and taking on more in debt, it should be no surprise that they’re also investing less. After all, what money do they have to invest? An astonishing 74% of millennials are not investing for their future, with (again no shocker here) 53% of respondents stating that they simply don’t have money to put into the market. Millennials are very obviously slow to invest.

Millennials Are In Serious Financial Trouble

As I see it, millennials are basically 10 years behind when it comes to debt payoff, healthy earnings, and investing (compared to their parents and grandparents). Instead of investing consistently for 40 years and retiring with $1 million in the bank (like mom and dad did), by waiting just 10 years millennials are setting themselves up for earning just $371,000 in their retirement accounts. That, my friends, is a pretty underwhelming number…

Millennials are in serious financial trouble…don’t you think?

millennials are in serious financial trouble

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Money

Derek

AUTHOR Derek

My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

7 Comments

  1. “74% of millennials are not investing for their future.” That is a very scary number. I knew it was high, but no idea how far up there it was. With boomers staying in careers longer for their own lack of preparedness for retirement, it may be some time before millenials earning power starts increasing as well. This is going to be a huge challenge for our generation.

    • That is pretty scary isn’t it?!! I’m so glad that I never compared myself to average – I’d never want to be that far behind!

  2. Millenials of course earn less because they have worked less. The BLS has an interesting graph that shows wages over a lifetime – increasing every year until around 35 or so, then becoming flat until about 55, then dropping significantly until retirement. So, we can’t compare a 30 year old to a 40 year old because we are on completely different parts of the curve!

    That’s why it’s so important to spend your time investing in Passive income. Our wages actually a lot flatter over a lifetime than you realize.

    • True Eric, but $30k vs. $50k? That’s a huge difference! I’m not so sure the millennials’ earning power will increase that dramatically as they enter their 30’s and 40’s.

      • I’ll have to agree with Eric here. A fair comparison would be comparing millenials to other groups at the same age (taking inflation into account). Almost everything compard in the article are age dependent, income, liklihood of paying for a house, wedding, children.

        • I just think about myself – I’m a millennial, and I’m definitely not earning just $30k a year… Was I just fortunate? More hard-headed? It just seems crazy to me that an average millennial can be so far behind.

  3. How does this all compare to other generations? I’m the only one at my company with an IRA (except the experienced VP), and I’m in my mid-20s. Those older than me here seem to be also buying luxury cars instead of saving for retirement or their kids’ 529s…the millenials at least admit their decisions are stupid and “I have plenty of time before I settle down”, while the older folks still overspend, but say they are worried and don’t do anything about it. Not sure which is worse!


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