The past vs. today when it comes to money. #podcast #jayshetty #moneytips #financialadvice

What are the main reasons millennials earn less than their parents?

For the first time in history, 30-year-olds today earn less than their parents did at the same age. This shift marks a significant turning point in economic landscapes. The historical promise that hard work and playing by the rules would lead to greater prosperity for future generations is faltering. Unfortunately, many of today's millennials are encountering barriers unseen by their parents.

Several factors have contributed to this phenomenon. Wage stagnation plays a crucial role. Despite the high costs of education and living, salaries have not kept up. Rising inflation further decreases purchasing power, adding strain on millennial budgets. Moreover, wealth transfer to older generations through fiscal policies favors tax deductions on mortgage interest rates and capital gains, benefiting those already established with assets.

The result? Millennials find themselves shackled by economic challenges, grappling with expenses that limit their financial stability and upward mobility. Understanding these historical and structural issues is vital for navigating today’s complex economic environment.

How have fiscal policies affected wealth distribution across generations?

• Tax Deductions Favor Older Generations: Tax policies like mortgage interest rate and capital gains deductions primarily benefit older individuals who own homes and stocks. Younger people, who earn predominantly from salaries and rent, see little advantage.

• Government Spending Disparities: A significant portion of government spending is directed towards individuals over 65. This allocation leaves younger generations with fewer resources and opportunities for economic growth.

• Wealth Transfer from Young to Old: Fiscal strategies have systematically transferred wealth to more established demographics. Younger individuals face a lack of disruptive opportunities to amass assets.

• Impact of Economic Stimuli: Recent economic stimuli, such as the $7 trillion COVID package, were largely debt-fueled, increasing asset prices and benefiting baby boomers, further entrenching existing economic divides.

What impact does education and housing costs have on millennials?

Escalating education and housing expenses are significant hurdles for millennials pursuing financial stability. These rising costs hinder their ability to save and invest, affecting upward mobility.

• Education Debt: College tuition rates have surged, leaving young adults burdened with substantial student loans.

• Housing Affordability: Soaring home prices and rent make it challenging to enter the housing market.

• Stifled Savings: High expenses reduce the capacity to build savings or invest in long-term assets.

Together, these factors create daunting barriers, making it difficult for young people to establish a secure financial future.

How does government spending prioritize older generations?

Government spending often favors older demographics, significantly affecting younger individuals.

A large portion of public funds, 40% and rising to over 50%, goes to those over the age of 65. This prioritization leaves younger generations facing limited resources.

While older adults benefit from substantial government aid, millennials and younger people find fewer opportunities for economic advancement.

The imbalance in spending can create long-term economic challenges, as younger generations struggle to gain financial stability in a system that supports the elderly more robustly.

Adjusting public resource allocation could help bridge this generational divide, enabling fairer wealth distribution and enhancing opportunities for youth.

Why is there a growing sense of anger and polarization among young people?

Economic disparities are fueling a deep sense of anger among the younger generation. Many young people feel betrayed by a system that promised prosperity in exchange for hard work. The frustration is compounded by the fact that 30-year-olds today earn less than their parents did at the same age.

"When your kids aren't doing better than you, it creates shame and rage."

This rage intensifies as systemic challenges, such as wage stagnation and the high costs of education, persist. The focus of government spending on older generations further exacerbates feelings of marginalization. The economic climate seems skewed against younger people, making them feel entangled in an unfair battle for financial stability.

Economic uncertainties are sparking a desire for change, yet the means to achieve it seem limited. As the gap between aspirations and reality widens, young people’s frustration evolves into a powerful force for societal and economic change.