"Spaulding ... is a typical member of the relatively small group called Generation X,... born between 1965 and 1978: They’re ambitious, squeezed by debt and frustrated by people who aren’t retiring on schedule."
We're ambitious? Wait, all of those other articles say we aren't ambitious, and we like to settle for less. Which is it?
When the media first took note of Gen Xers during the early '90s recession, we were "lazy." Then during the dot-com boom we were ambitious. Funny how easy it is for a generation hitting a workforce when there aren't jobs available to look lazy, or for a generation hitting their late 20s/early 30s during a boom to look like sharp business types.
Ha ha, those darn baby boomers, refusing to give up their jobs like their parents did! The fact that their parents' retirement was in defined-benefit pensions whereas the baby boomers' retirement is in 401ks that dropped hugely in value just as they were planning to retire has nothing to do with this, obviously.
“Don’t be dependent on anything or anyone,” Neu says. “It’s safest to plan as if the government isn’t going to take care of me, companies aren’t going to take care of me.”
Doesn't appear the boomer generation figured this out. As a Gen X, I think and hope I figured this out early enough.
But 401Ks were sold as "you taking care of yourself" because "you" controlled your retirement, not some pension fund. What's your alternative for retirement savings? The mattress?
Spend less and Save more. If you save ~18-20% starting in your early 20's you can stop caring what the stock market does. Basically plan for 4.5% ROI and deal with it. If you happen to be able to retire at 50 great, if not your still going to be ok. Don't go to an expensive school and get someone else to pay for grad school. Also don't skip out on insurance because cheap does not mean good.
PS: An Indian friend of mine saved 20k over a year while making 42k and living in an expensive area. He had no car, never eatout, and had a lot of roommates, but he wanted to save up for his sisters dowery. You can still splurge a lot more than that and still build a nest egg quickly.
Where are you getting the 4.5% ROI? It's obviously not the stock market, if you're not caring what the market is doing.
Is it in bonds? Several cities and states are looking at defaulting on those. Even if they're corporate bonds, you're right back to being tied into the stock market again.
Perhaps you have it all in CDs. Probably a 20 year Cd if you're getting 4.5%. Fifteen years from now, the bank elects a new president whose new investment strategy is Beanie Babies. There months later, the bank goes under and you're praying that the FDIC steps in to bail you out.
If you're getting any ROI, there's risk involved and you can get wiped out the same way that the boomers did.
Well the 30 year treasury is yielding 3.5%. Nominal. So you are not getting 4.5% in anything risk free. But as a long term return in shares, historically that has been the case. Whether it will be looking forward is another question.
Your friend's approach is all well and good if you're single, living with a bunch of roommates, and have no financial obligations other than to yourself. What happens when you get older, marry, and have a kid or two?
There's little financial difference between having children and buying Lambourghinis. The cultural difference is that only one of these is blameworthy if you get into financial trouble later. Perhaps both of them should be.
Thanks for the demonstration of the mindset I'm talking about. Some people want children, other people want pets, other people want houses, other people want cars, other people want jewelry.
All of these things cost money, none of them are charitable, but it's somehow less ok to get in financial trouble over them, the further you move toward the end of that list. Why?
My parents didn't have kids until they could afford them. They were in their mid-30s when I was born. If I'd been raised in poverty because they had kids at 18 and dropped out of college, I would be entirely within my rights to question their judgement.
I don't think anyone's taking issue with the notion of personal responsibility, but rather, with your original phrasing -- in which you (perhaps in a tongue-in-cheek way?) implied that having children was a luxury akin to buying a sports car. One of those things is a hardwired, biological imperative of our species; the other is a fancy toy. Apples and oranges.
Social signaling (such as flaunting luxury goods) is a hardwired, biological imperative of the entire Hominidae Family. Gorging on foods rich in historically hard-to-find nutrients like salt, fat, and sugar is a hardwired, biological imperative of the entire Mammal Class, at least--probably all animals.
You blame people who fail to control their unhealthy eating decisions; why don't you blame people who fail to control their unhealthy procreating decisions?
"You blame people who fail to control their unhealthy eating decisions; why don't you blame people who fail to control their unhealthy procreating decisions?"
That's not what I said.
I do blame people who make unhealthy parenting choices, i.e., who have kids before they're financially capable of supporting kids. I take no issue with that argument.
Rather, I took issue with the language in your original post, which seemed to imply that having kids at all is considered a high-end luxury. IMO, something's seriously wrong with any society in which that's categorically true.
I was very careful to separate the financial difference and the cultural difference, and I feel like you're ignoring that.
Having kids at all is not a basic human need on the level of food, water, and shelter. It is a biological urge, similar to the urge for french fries.
Now, I don't personally think that eating a reasonable serving of french fries while getting adequate exercise is blameworthy; nor do I think that buying a Lambourghini while earning $10M/year is blameworthy; nor do I think that having children you can afford and care for is blameworthy.
I do think that it's silly for popular culture to have sympathy and often admiration for unprepared parents, but scorn and derision for indebted luxury car owners.
Your ignorance shows when you seem to think financial stability can be reached by most of the world. The reality is that most people will never achieve any sort of stability, living day to day, taking risks as they will.
Effectively you are telling the majority of people on this planet they don't deserve the right to have children.
What gives people the right to bring children into the world when they may not be able to support them properly? These are human lives we're talking about. I cannot think of any arrogance greater than assuming functioning genitals gives you the right to irretrievably screw up an innocent person.
This kind of "I'm going to make babies and you can't stop me!" attitude is what created the Iron Law of Wages.
Wow. Downvoted with no explanation. Not a single counter-argument ever given. I thought this would be one place I could question the attitude that popping out babies with no thought for the future is the god-given right of every person on earth.
Extremely good comment, just a minor important point here -
> Basically plan for 4.5% ROI
Warren Buffet notes that a nation's ROI overall basically can't exceed its GDP growth for an extended period of time. So if your country has a 1% to 3% growth rate and you're investing in an unsophisticated way, then 4.5% might be optimistic.
(It's still a thoroughly good idea to do the rest of your comment. I'd save most of my income even if my ROI was -10%, because money is more useful in large quantities, especially when you break certain thresholds like "can take 2-3 years off work when it's a good time to do so" and "can mix cash and and labor when joining a company to get a big equity stake" and "can buy tools and gifts without even looking at the cost if there's a productivity benefit" - cash is more useful/leverageable in large numbers than small for most middle class-ish people.)
1-3% is real GDP growth rate, net of inflation. With inflation at 2-3%, then planning for 4.5% growth, not adjusted for inflation, is not unreasonable.
Where I work the organization matches up to 4% for retirement accounts (403b) and puts an additional 2% of your pay each year into a pension. If you work here for 3 or more years you get the pension when retiring.
Things could still happen, but if I was within a few years of retirement I would have taken most of it out of stocks.
Too many people thought if you had a 401k it didn't matter because "stocks always go up." Too many people thought if you bought a house it didn't matter because "housing always goes up."
You have to take responsibility for your own investment decisions. This means not buying a McMansion and trying to keep up with the Joneses. This means not buying multiple huge SUVs and living in the suburbs and spending thousands on gas every year. This means not trusting some financial planner when they tell you that you should put 100% of your retirement in the stock market.
People need to think for themselves and take charge of their own financial future. The greatest generation did this - they grew up during the great depression and they understood that you had to save and not trust Wall Street. They understood that housing doesn't always go up. Their kids partied at Woodstock and forgot everything their parents told them.
This means not buying a McMansion and trying to keep up with the Joneses. This means not buying multiple huge SUVs and living in the suburbs and spending thousands on gas every year.
Are we really so positive that everyone who is hurting in this economy made these kinds of irresponsible financial decisions?
The problem is, economics is a group activity. While many people were irresponsible, the effects of their irresponsibility have been felt throughout the economy. And some (banks) were definitely more irresponsible than others (homeowners), by virtue of the amount of power they wielded.
The greatest generation did this - they grew up during the great depression and they understood that you had to save and not trust Wall Street.
The Greatest Generation benefitted both from social security and from the defined-benefit pension plans their unions won for them.
Edited to add: Also, many got to go to college for free on the GI Bill, and so entered the professional workforce without the debt burden that their children and grandchildren would face. Makes it easier to save.
401Ks and defined contribution plans were sold that way because it is cheaper for the company (as opposed to defined-benefit plans).
But the majority of people don't have any financial literacy... just look at the amount of people in debt. That's why, although "taking care of yourself" is correct, it's just not feasible for most people. Most people don't know about proper investment vehicles, inflation, dividends, tax shelters, etc.
It's like giving someone this mysterious "gun thing" to store their bullets in, and then acting surprised when they shoot themselves.
According to my own calculations very few of the baby boomers will retire. Most of us spent our lives fighting a losing war, the inflation of the eighties, the rising housing prices. Schooling for the kids from being a very small amount of a family's life to eating a major portion of one's work efforts. Personally add one wrong move where I lost all my capital and still fighting to recover.
Most of us are still supporting our kids as they are the kids of the recessions or helping them with capital for their start-up and hey we don't want to rust in the port like an old ship. Many other of us have build Companies where these X's are currently employed.
Rising (and then dramatically falling) housing prices destroyed the wealth a large portion of established families. If they bought a house in say 2005, they lost money and are saddled with a huge mortgage. Even families who own their own home now have less money as people often viewed their home as a major investment.
Which is entirely their fault. You don't treat basic needs(food, water, roof over your head) as investments, because no matter what the actual price is of those, you still need them. Instead, you should buy what's affordable for you, so even if the price drops, it doesn't matter.
> Which is entirely their fault. You don't treat basic needs(food, water, roof over your head) as investments, because no matter what the actual price is of those, you still need them. Instead, you should buy what's affordable for you, so even if the price drops, it doesn't matter.
This is a little harsh. Many families need to sell due to reasons other than treating their house as an investment.
The part that couldn't cope to save enough for a deposit due to inflation and when we managed we paid 26% (at the time living in RSA) interest plus currency instabilities. What this means is that most people's wealth was tied in their property. We also tried investing in stock markets and if you look up black Fridays and the like you will see the futility of it. To summarize at least for me the main characteristic of my financial life was that it resembled a snakes a ladders game. When you on the 98 go back to square 2! One lesson that I want to pass on, is at the end, the only worthwhile investment you can make is to invest in your children in the hope that one day they can make the world a little bit better than where you left it. This was what my father did for me by working in a sweat shop to assist me with my education and this what I am still doing. I don't divide a person's life by age but by landmarks. If my kids need support until they are 30 to stand on their feet so be it.
> According to my own calculations very few of the baby boomers will retire.
It is sometimes difficult to understand that infirmities of aging are not controllable. Or put another way: Many folks are forced into retirement by someone other than their company.
Exactly. If the the powers that control the shape of policy in this country (mostly wealthy & large corporations that have politicos in their pocket) cared about creating jobs as opposed to pilfering from the poor and middle class, we wouldn't be in this situation.
On reflection, there is a difference between the Lump of Labor fallacy and a particular job opening up. If your only way to advance (say within a company) is to wait for someone above you to advance/leave/retire, then you personally will be affected by later retirement ages. It's not always easy to see alternatives to waiting, and they might come with risks you'd rather not accept.
In one company for a particular position yes, the article seemed to be insinuating some sort of general notion that jobs are a finite resource. It especially comes across because of the finger pointing at an entire generation.
At the end of humanity, when the Sun finally burns out, and Earth drifts into a slow freeze in the final sunset - mankind will still not have grasped economics.
You got to elaborate on this. I'm going to guess that you're objecting to the way that the article seems to treat the number of jobs as a zero sum game, where boomers have to leave to "open up" one of a finite number of jobs for younger people (or anyone else, for that matter)? This was the first reaction I had to the article as well.
Thing is, it is actually debatable, or at least more nuanced than this. I lean toward the belief that relatively free markets and a robust entrepreneurialism can provide a huge amount of flexibility, to the point where discussing who "gets" a job may miss the point. Certainly young people who prefer to create startups are demonstrating that there's no need to try to climb a ladder, or at least that there are all kinds of options for creating your own job.
That said, I think there's enough friction and inertia in society and markets that a younger generation can be meaningfully stymied by an older one hanging on to the reigns.
Anyway, I'm not sure I've responded to your objection to this article - I'm really just responding to my own.
It's very easy for those of us in Gen X that do software development to be smug. After all, I don't know of any 65 year old Java programmers refusing to retire so that we can get a job.
In other industries where ageism is not so rampant, they might have it tougher than we do. Industries like healthcare, finance, etc, there are many positions that they are just not going to give up.
In a way, it makes me very cynical towards the older generation. They had the world given to them on a platter in the 1950s, 60s, and 70s. Instead they squandered everything they had. They started "Reaganomics" in the 1980s and since then median household income has decreased as adjusted for inflation. They started unnecessary wars, squandered our nations standing in the world, destroyed the housing market, the stock market, and the global economy. Now, when they finally retire they are going to dump themselves on us, broke, sick, and old, and expect us to take care of them with welfare payments, because they squandered all their money on McMansions and SUVs.
It's hard not to be bitter if you are Gen X and Gen Y. I know we all love our parents, but our parents generation is pretty fucked up.
There's truth in what you say and boomers in general have to take responsibility for having close to zero foresight with respect to how they've squandered their fortunes but let me counter a couple of your points.
1. The vast majority of boomers hit the job market between the middle 70's and middle 80's. This was the worst job market between the Great Depression and the Great Recession. While many things were peachy during boomer's youth, reality bit pretty hard for a really long stretch of time.
2. Reagan was largely voted in by the boomer's parent's generation.
3. And yes, under a boomer government, the housing market, stock market, global economy tanked, but I'm hard pressed to believe that these results didn't hit the boomers as hard or harder than they have hit the following generations.
I don't know the details about the US but for Spain and most European countries the baby boomers are going to create dysfunctional states as they will be the majority of voters for the next couple of years and have the highest benefits accrued in history. Basically gen X/Y will be relegated to paying their pensions with higher taxes and cuts in benefits as the boomers protect their benefits.
I think we are looking at a generational war or a complete revamp of the welfare systems across the entire west.
I'm a boomer, have no debt, own my houses, and have a fair amount of cash. But I have no pension and don't foresee any particular income from my cash while the Fed holds interest rates at near zero. Hard to imagine retiring now.
And no matter how much money I save, it seems kinda crazy to retire before being forced to. You might say: "Things look good, time to quit!", but what'll the world look like in 5 or 10 or 20 or 40 years? I don't know, but a good income will help carry you through a lot of financial craziness.
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[ 5.5 ms ] story [ 151 ms ] threadWe're ambitious? Wait, all of those other articles say we aren't ambitious, and we like to settle for less. Which is it?
FTA
>"They long ago shed that image, Hewlett says"
Doesn't appear the boomer generation figured this out. As a Gen X, I think and hope I figured this out early enough.
PS: An Indian friend of mine saved 20k over a year while making 42k and living in an expensive area. He had no car, never eatout, and had a lot of roommates, but he wanted to save up for his sisters dowery. You can still splurge a lot more than that and still build a nest egg quickly.
Is it in bonds? Several cities and states are looking at defaulting on those. Even if they're corporate bonds, you're right back to being tied into the stock market again.
Perhaps you have it all in CDs. Probably a 20 year Cd if you're getting 4.5%. Fifteen years from now, the bank elects a new president whose new investment strategy is Beanie Babies. There months later, the bank goes under and you're praying that the FDIC steps in to bail you out.
If you're getting any ROI, there's risk involved and you can get wiped out the same way that the boomers did.
All of these things cost money, none of them are charitable, but it's somehow less ok to get in financial trouble over them, the further you move toward the end of that list. Why?
You blame people who fail to control their unhealthy eating decisions; why don't you blame people who fail to control their unhealthy procreating decisions?
That's not what I said.
I do blame people who make unhealthy parenting choices, i.e., who have kids before they're financially capable of supporting kids. I take no issue with that argument.
Rather, I took issue with the language in your original post, which seemed to imply that having kids at all is considered a high-end luxury. IMO, something's seriously wrong with any society in which that's categorically true.
Having kids at all is not a basic human need on the level of food, water, and shelter. It is a biological urge, similar to the urge for french fries.
Now, I don't personally think that eating a reasonable serving of french fries while getting adequate exercise is blameworthy; nor do I think that buying a Lambourghini while earning $10M/year is blameworthy; nor do I think that having children you can afford and care for is blameworthy.
I do think that it's silly for popular culture to have sympathy and often admiration for unprepared parents, but scorn and derision for indebted luxury car owners.
FWIW, I am childless and drive a VW.
Effectively you are telling the majority of people on this planet they don't deserve the right to have children.
This kind of "I'm going to make babies and you can't stop me!" attitude is what created the Iron Law of Wages.
Looks like, even here, that's something you just can't say http://www.paulgraham.com/say.html
> Basically plan for 4.5% ROI
Warren Buffet notes that a nation's ROI overall basically can't exceed its GDP growth for an extended period of time. So if your country has a 1% to 3% growth rate and you're investing in an unsophisticated way, then 4.5% might be optimistic.
(It's still a thoroughly good idea to do the rest of your comment. I'd save most of my income even if my ROI was -10%, because money is more useful in large quantities, especially when you break certain thresholds like "can take 2-3 years off work when it's a good time to do so" and "can mix cash and and labor when joining a company to get a big equity stake" and "can buy tools and gifts without even looking at the cost if there's a productivity benefit" - cash is more useful/leverageable in large numbers than small for most middle class-ish people.)
What?! Be frugal and spend beneath our means?!
This man is a subversive. He and his kind should be hunted down and silenced.
Things could still happen, but if I was within a few years of retirement I would have taken most of it out of stocks.
You have to take responsibility for your own investment decisions. This means not buying a McMansion and trying to keep up with the Joneses. This means not buying multiple huge SUVs and living in the suburbs and spending thousands on gas every year. This means not trusting some financial planner when they tell you that you should put 100% of your retirement in the stock market.
People need to think for themselves and take charge of their own financial future. The greatest generation did this - they grew up during the great depression and they understood that you had to save and not trust Wall Street. They understood that housing doesn't always go up. Their kids partied at Woodstock and forgot everything their parents told them.
Are we really so positive that everyone who is hurting in this economy made these kinds of irresponsible financial decisions?
The Greatest Generation benefitted both from social security and from the defined-benefit pension plans their unions won for them.
Edited to add: Also, many got to go to college for free on the GI Bill, and so entered the professional workforce without the debt burden that their children and grandchildren would face. Makes it easier to save.
But the majority of people don't have any financial literacy... just look at the amount of people in debt. That's why, although "taking care of yourself" is correct, it's just not feasible for most people. Most people don't know about proper investment vehicles, inflation, dividends, tax shelters, etc.
It's like giving someone this mysterious "gun thing" to store their bullets in, and then acting surprised when they shoot themselves.
Most of us are still supporting our kids as they are the kids of the recessions or helping them with capital for their start-up and hey we don't want to rust in the port like an old ship. Many other of us have build Companies where these X's are currently employed.
// Says a Gen Y from Australia where house prices haven't crashed yet.
This is a little harsh. Many families need to sell due to reasons other than treating their house as an investment.
It is sometimes difficult to understand that infirmities of aging are not controllable. Or put another way: Many folks are forced into retirement by someone other than their company.
I only worry about my mom's retirement because her job sucks.
Thing is, it is actually debatable, or at least more nuanced than this. I lean toward the belief that relatively free markets and a robust entrepreneurialism can provide a huge amount of flexibility, to the point where discussing who "gets" a job may miss the point. Certainly young people who prefer to create startups are demonstrating that there's no need to try to climb a ladder, or at least that there are all kinds of options for creating your own job.
That said, I think there's enough friction and inertia in society and markets that a younger generation can be meaningfully stymied by an older one hanging on to the reigns.
Anyway, I'm not sure I've responded to your objection to this article - I'm really just responding to my own.
In other industries where ageism is not so rampant, they might have it tougher than we do. Industries like healthcare, finance, etc, there are many positions that they are just not going to give up.
In a way, it makes me very cynical towards the older generation. They had the world given to them on a platter in the 1950s, 60s, and 70s. Instead they squandered everything they had. They started "Reaganomics" in the 1980s and since then median household income has decreased as adjusted for inflation. They started unnecessary wars, squandered our nations standing in the world, destroyed the housing market, the stock market, and the global economy. Now, when they finally retire they are going to dump themselves on us, broke, sick, and old, and expect us to take care of them with welfare payments, because they squandered all their money on McMansions and SUVs.
It's hard not to be bitter if you are Gen X and Gen Y. I know we all love our parents, but our parents generation is pretty fucked up.
I think we are looking at a generational war or a complete revamp of the welfare systems across the entire west.
I couldn't write better comedy if I wanted to.
And no matter how much money I save, it seems kinda crazy to retire before being forced to. You might say: "Things look good, time to quit!", but what'll the world look like in 5 or 10 or 20 or 40 years? I don't know, but a good income will help carry you through a lot of financial craziness.