HomeArticlesThe Next Financial Crisis will destroy Millenials – You need to act now!
The Next Financial Crisis will destroy Millenials – You need to act now!
October 23, 2019
The Next Recession Will Destroy Millennials
Millennials are already in debt and without savings. After the next downturn, they’ll
be in even bigger trouble. The trade war is dragging on.
The yield curve is inverting. If you are watching this video then you are
probably between 25 and 35 and are starting to notice the notice the consequences of the
last recession. I think it’s in your best interest to watch until the end of this video
as by knowing more about what can happen to our generation during the next generation
will help us become more prepared. Investors are fleeing to safety. Global growth
is slowing. The stock market is dipping. The Millennials are screwed.
Recessions are never good for anyone. A sputtering economy means miserable financial, emotional,
and physical-health consequences for everyone from infants to retirees. But the next one—it is not a question of
if it happens but when. And when it happens will hit millenials, adults between 22 and
38 particularly hard. after all, the last recession never really ended. Millenials have struggled in recovering after
the last financial crisis are now left more vulnerable than older generations. With inflation
increasing yearly but in most cases not a matching increase in salary. Millenials are failing to make it to the middle
class and will most likely be the first generation in modern economic history to end up worse
than their partents. The next financial crisis will be the final nail in the coffin. Stalling
their careers and sucking away their wages as inflation rates rise even higher right
at the same time most millenials enter their prime earning years. Millennials graduated into the worst jobs
market in 80 years. That did not just mean a few years of high unemployment, or a couple
years living in their parents’ basements. It meant a full decade of lost wages. The generation unlucky enough to enter the
labor market in a recession suffers “significant” earnings losses that take years and years
to rebound, Kids of the 1980s and 1990s have had a new,
huge, financially catastrophic demand on their meager post-recession earnings, too: a trillion
dollars of educational debt. The toxic combination of lower earnings and
higher student-loan balances—combined with tight credit in the recovery years—has led
to Millennials getting shut out of the housing market
Therefore, losing an important way to build wealth. The generation’s homeownership rate
is a full 8 percentage points lower than that of the Gen Xers or the Baby Boomers when they
were the same age; the median age of home-buyers has risen all
the way to 46, the oldest it has been since the National Association of Realtors started
keeping records four decades ago. As a result, Millennials have not benefited
from the dramatic rebound in housing prices that has occurred since the financial collapse
and the foreclosure crisis. Millennials have also been forced to shell
out hundreds of billions of dollars in rent as housing costs have skyrocketed in many
urban areas. This represents a large generational transfer
of wealth from the young to the old. Boomers own the houses and bar municipalities from
building more of them, thus benefiting from rising prices and soaking up endless rent
checks forked over by younger and poorer families. Cost pressures have also made it difficult
or impossible for Millennials to save or invest. The share of Americans under the age of 35
who own stocks has decreased down from 55 percent in 2001 to 37 percent in 2018.
This is partly because employers are less likely to offer retirement-savings plans and
in part because Millennials have nothing left over at the end of the month to put away.
Virtually all members of the cohort are “not saving adequately,” experts warn, and two-thirds
of Millennials have zero retirement savings. This means that Millennials have benefited
not a bit from the decade-long boom in stock prices, as their parents and grandparents
have. Millennials are worth less on paper than members
of older generations are, and are worth less on paper than members of older generations
were at the same point in their lives. Could the Millennials make up this lost ground?
Perhaps, if wage growth suddenly and dramatically accelerates, urban cores start to build millions
of new homes, and Congress announces a student-loan debt jubilee. But financial experts consider it unlikely.
Millennials missed out on the big asset boom that occurred between 2010 and the present,
and “appreciation is unlikely to be as rapid in the near future as it was during the recent
period,” argue economists at the Federal Reserve. “With the baby boomers occupying most of
the top jobs and much of the housing, Millennials are doing less well than their parents,”
concluded Credit Suisse. “We expect only a minority of high achievers and those in
high-demand sectors such as technology or finance to effectively overcome the ‘millennial
disadvantage.’” The next recession—this year, next year,
whenever it comes—will likely make that Millennial disadvantage even worse. Already, Millennials have put off saving and
buying homes, as well as getting married and having babies, because of their crummy jobs
and weighty student loans. A downturn that leads to higher unemployment
and lower wages will force Millennials to wait even longer to start accumulating wealth,
making it far harder for them to accumulate any wealth at all. (Compound interest is magic, after all.) Their
trajectory, already terrible, might get even worse. And Millennial suffering won’t just hurt
Millennials. if the young were not here to g just to pump up asset values for the old.
Which reminds me—there’s one generation that might fare even worse than Millennials: