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Friday, March 29, 2024

Young money

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“Rock star” is a label given to individuals who are considered idols, revered for their bigger-than-life personas and admired for what they have achieved. Back in the day, rock stars were actual rock stars, as in musicians who became famous for their songs and performances. Living like a rock star meant fame, wealth and privilege. Every child wanted to be a rock star.

A small fraction of millennials save 15 percent of their salaries for retirement.

Today’s rock stars are cut from a different cloth. They are famous and wealthy and privileged but they don’t have number-one hits and sold-out arena shows. Instead, they make money by sitting in front of a computer to come up with the next big thing. They don’t wear leather pants and vests – they prefer black turtlenecks and hoodies. Their lives are not about drugs, sex and rock & roll – they’re about the Forbes rich list and the BrandZ brand value tally. Today, every child wants to be that kind of rock star.

A lot of millennials think of Mark Zuckerberg as 
a rock star and aspire to be like him.
Photo courtesy of catwalker / Shuttersto

I can’t speak for all millennials but I do think that most of us have given up on our childhood fantasy of being in a platinum-selling rock band. For the past half decade or so, the dream has been to pull a Zuckerberg – that is, create a “disruptive” product, most likely a digital one, that the whole world will be addicted to and make loads and loads of money along the way. You know the TV series Silicon Valley? Yep, that’s basically how we think things are going to happen.

What I think we’re forgetting in this process is how to sustain ourselves before we strike gold. We have these lofty visions of changing the world and being different and creative and groundbreaking – who needs to eat and have savings in the bank when you’re so focused on introducing your amazing new idea to the world? – that we fail to face the reality that we are not getting any younger and we don’t have any security for the future.

If not in savings, where does the millennial buck go?

“A recent study found that only one in three millennials has enough money saved for a single emergency room visit or car repair… Experts suggest making sure you save enough money to cover between three and six months’ worth of living expenses,” points out Time Money’s Susie Poppick.

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When we do realize that devastating fact, we get cynical. A recent Bloomberg survey reveals that 47 percent of Americans age 18 to 35 believe that they will not have better lives than their parents. This is the exact opposite of less recent surveys that found millennials to be “more optimistic” about their financial futures.

Restaurant server is the most common job 
among millennials.

Which is why now, there is a shift in attitudes towards money and savings among the twenties  to mid-thirties crowd. There is now an emerging group among millennials known as super savers, or those who put away as much as 15 percent of their salaries into their pension funds.

“Super savers,” a term coined by Fidelity Investments, account for 20 percent of employed individuals age 18 to 34 in the firm’s database. That some of us are thinking of the future is a good thing, but what about the remaining 80 percent? Well, data shows that non-super savers allocate 11 percent of income to their retirement plans. However, Fidelity also says in a separate study that “nearly half of Gen Y-ers have already started saving for retirement.” This means that there’s the other half that have not.

Two in three millennials don't have money for emergencies.

Add to that the reality that most of us have jobs that are not exactly rich-list material. According to Forbes, the top 10 most common jobs that millennial workers have are restaurant server, manager, intern, sales associate, business owner, cashier, teacher, supervisor, assistant and sales representative. And you just know that some of these people think of their current low-paying entry-level positions as a way to make ends meet while they cook up their grand plan to be the next Mark Zuckerberg. There’s absolutely nothing wrong with that because who knows? It might just happen to you.

I guess the point of this article is that in the off chance that someone else beat you to it and you don’t end up being an Internet rock star, it pays to have a backup plan. And that includes a stable job with potential to grow, worst-case-scenario emergency cash and a solid pension fund. #justsaying. Amirite, Gen X-ers?

Follow me on Twitter and Instagram @EdBiado

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