To my fellow Millennials…
Fellow Millennials: Now that our generation has suffered the brunt of two economic crises, it is never more vital to increase your financial literacy and chart an aggressive but realistic path to financial stability, if not financial independence.
If your upbringing was anything like mine, you learned next to nothing about money and finances overall. A typical middle-class child, I fell into the trap of consumerism and retail therapy. While I fortunately did not end up in a lot of debt, I still had very poor spending habits that did not put me on a path to success to say the least. But at the same time, I was oblivious to anything beyond getting money, spending that money, and hoping to end up in the black at the end. The concepts of investing, assets, and passive income were a world apart.
And this is not only because money and finances were not taught in the home. Financial education was bereft from the schoolroom despite it being one of the most important and consequential subjects one could learn (next to proper nutrition). So we were not set up for success in this area and are left to just figure it out, making it imperative to learn exactly how it is to build wealth in the twenty-first century.
The millennial generation will have to get very resourceful to overcome these economic and educational obstacles, just like our ancestors who survived the Great Depression. We must scrutinize our spending and grow the gap between our income and expenses. There are tons of websites out there with tips on both how to create new income streams and cut expenses. Find what works for your circumstances, but notice that the top categories to scrutinize are housing, food, and transportation. Would moving improve your situation? What kind of living arrangements are available? Should you change your eating habits and/or grow some of your food? What are all your transit options and will your employer cover any part of it? You have to study all your options. Maybe moving closer to work costs $200 more per month but allows you to sell your car and save on a loan payment, insurance, and maintenance costing $600 per month. Figure out the best way to lower your net expenses.
Once you have created and grown that gap between income and spending, you cannot just save your money. You need to acquire assets that provide positive cashflow and hedge against inflation. Unfortunately, savers lose in the end, as the dollar already has lost a tremendous value over time due to inflation. Like any investment, though, do your research, set your goals, and make a strategy. Building wealth takes time, especially when you need to reprogram a bunch of counterproductive habits and have a lot to learn. But you can achieve this!
Now let’s get to work…