Millennials, Gen Y, Echo boomers I bet you have heard the terms, the funny part is not only can no one agree on which term to use but no one can agree on when they started and when they ended!

William Strauss and Neil Howe have been largely credited with coining the term, in their book “Generations: The History of America's Future, 1584 to 2069”, but for the sake of ease I’ll use the time period 1980–2000 post Gen Xers but not the I-Gen/Gen-Y. Basically, Millennials are the last generation to not have grown up with the internet!

 Why Millennials have challenges

The common narrative that I see and hear, which I think is the most agreed on is that millennials are to blame for everything, you might’ve seen those lists blaming them for killings things

-RIP: Here are 70 things millennials have killed or how about these things or some of these trends which is great for a laugh and to kick us when we are down but how true is it?

  Let’s throw in some reality

“Millennials are less well off than members of earlier generations when they were young, with lower earnings, fewer assets, and less wealth” and “Millennials do not appear to have preferences for consumption that differ significantly from those of earlier generations.” according to a recent report.

 So what’s going on.  Perceptions do not match reality.

Expectations and timing….driven by changing circumstances

The narrative we were told is that a good life and economic prosperity was the norm and a middle-class existence can be guaranteed through a good paying job… that’s what was drilled into me and into my friends. This, at face value, seems like sage advice because it worked for the previous generation (Boomers that’s you) by delivering prosperity.

Here is a fancy chart to back this up

Enter the first problem, the cost to get to the starting point has risen. The way to earn above market rate wages ie above minimum wage has been through a college/university degree. University fees have consistently risen faster than inflation- why this is true is another reason which I’ll get to at some point- basically it means you are starting out the gates with a large debt load. A debt load that needs to be paid for out of your wallet.  That could be fine or it could be an anchor around your neck that is impeccably hard to move! Here is some more pretty charts to confirm I am telling the truth.

or to put it another way

 This unfortunately does not show the whole picture, the other half is the income side of the equation…sure price have increased but surely starting salaries would have risen in tandem to offset this… yeah not really:

The authors comment as follows, “Overall, from 1960 through 2015, the inflation-adjusted average starting salary for a new bachelor’s degree graduate increased by 5.9 percent”…. Whilst your college degree since the 1980’s has increased 200-300% .

That’s not even talking about what type of Major you picked (fairly certain liberal arts degrees have been beaten up on enough so I won’t add to much here). I have some pretty shocking news, things don’t deviate too much:

 The flip side is that even profession based jobs have been seeing difficulties – too many people chasing too few positions.  Case in point, law school post financial crises

Just to really rub this in, depending on where you live in the world, the debt is next to impossible to reduce via bankruptcy.

Timing, unfortunately does count. Depending on their age early/mid millennials were graduating during or after the financial crises. This was terrible for multiple reasons.  Starting with opening jobs for graduates/new hires which there weren’t any, labour freezing hires persistent for year and what does this mean?  Well, Baristas were some of the most educated bunch I’ve ever met Waiters were multi lingual waiters, nanny’s had MBAs.  Basically, people were willing to do anything to pay the bills when that education they got didn’t do the trick.  Again, the data backs up these assertions, “Taken as a whole, the results suggest that the labor market consequences of graduating from college in a bad economy are large, negative and persistent”

 Changing circumstance

Some of the big issues I have just gone through are simply symptoms of much larger topics (Globalisation and Technological change) which have thrust Millennials into a very different environment than the ones Boomers especially, and too a lessor degree Gen X, were born into. The barrier to entry for millennials is higher simply to achieve certain status quo symbols of previous generations car, house etc. 

All is not lost and why there is more upside

I have spent most of these posts talking about challenges that millennials are facing and if we left it there I could understand, but that’s only half the story. The same forces that drove the changing circumstances, have provided us with great opportunities. Some of these include the rise of freelancing, more gig-based earnings (Uber anyone), it’s easier and cheaper to start a business, new, small businesses are far less dependent on location and easier to bring to scale. To top it all off, its vastly easier to learn virtually anything for free (youtube/google) or at a more reasonable price online (Udemy anyone). The availability of information and investment platforms means the investment options are far greater to Millennials than in previous generations.

What to do about it

The purpose of Upgradedwallet is to be one part muse, on various finance topics, but more importantly provide people with actionable steps to address the issues above. What we seek to do is focus on the internal locus of control, taking accountability of those actions we can control in life… and not sweating the ones outside. Things we can control:

- Debt, Savings, Investing and Income.

Things we cant:

-Will the sun rise tomorrow

-Will a recession start the day after

I hope you will join me.