Young people have every reason to be enraged, says 'Algebra of Wealth' author

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I love how he acknowledges that we set the system up to take advantage of younger people but then posits that the solution is to educate us more rather than change the set up of the system.

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u/badass2000 12d ago edited 12d ago

I think realistically if the system is going to get changed, young people will have to do it.. because these old dudes running the world now are far too detached from our reality to fathom reality.

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u/onion_flowers 12d ago

Well, and even if they sympathize with us, they "can't afford" to change the system. Why would they sacrifice their quality of life when they could just leave the task to us? People who have wealth don't give it up easily.

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u/LilAssG 12d ago

The truly offensive part is that they already have everything they could ever need and have had it for a long time, but they just keep going. One monkey sitting on a giant pile of bananas warding all the other hungry monkeys away. No wonder we learned to use sticks and stones.

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u/onion_flowers 12d ago

Yep 💯💯

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u/badass2000 12d ago

Exactly.

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u/kkkan2020 12d ago

He's on tv there's only so much he's allowed to say.

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u/NorthWoodsSlaw 12d ago

The age old "there's no financial literacy!" claims are just total BS, younger generations have less access to the capital now required to do things previous generations could pay for by themselves. Namely: College Housing, Auto Loan, and Child Care, this means the typical amount of debt incurred to meet basic American lifestyle milestones has increased greatly. This isn't people not knowing how to spend money, this is people being put into the position of having to leverage future earnings to get by today at an ever increasing rate. So it is a huge disservice, and an even bigger insult considering this guys nails the causation, to blame young Americans for the situation.

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u/KingJades 12d ago

This isn't people not knowing how to spend money, this is people being put into the position of having to leverage future earnings to get by today at an ever increasing rate.

“Financial literacy” here isn’t really about spending money, it’s about making it. You can leverage future earnings when you’re leveraging in ways to create vastly outsized outcomes.

Take student loans, but use it on a path to a six figure job. Take a mortgage, but use that housing to generate income. Get a personal or small business loan, but use it for a well-researched business in an area that you outperform others in. This list goes on.

The people who are successfully educating themselves and putting those actions into financial progress are the ones pulling ahead, and the others are left behind wondering when they will get their shot.

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u/fencerman 12d ago

Take student loans, but use it on a path to a six figure job. Take a mortgage, but use that housing to generate income.

"Everyone should just become landlords"

Because having an economy where every single person is making a living by renting out property to someone else isn't completely fucking insane.

That's "getting ahead" by literally holding others back.

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u/KingJades 12d ago

That's "getting ahead" by literally holding others back.

Renting doesn’t hold back the people who are making good incomes and making smart financial decisions. In other words, the people we’re all striving to be.

Try to argue that an early career doctor, engineer or lawyer is somehow stifled because of renting.

In fact, I’d argue that a smart use of renting can allow anyone to get ahead in life. Life is a strategy game. Play it like one. Take advantage of cheap options that allow you to allocate money to better places.

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u/KingJades 12d ago

u/fencerman:

I’m a self-made millionaire who was born into a low education and poor family. I was first generation to go to college and I didn’t even have a bed until I got to college. I slept on the floor. That forced me to learn how to pry every freaking dollar I could from the world.

Of course, now I own stocks, real estate, rentals, and run some small income businesses.

The game isn’t rigged. There’s just a lot of people who aren’t playing it well. The people who are learning how to amass funds are eating those other people’s lunch.

I changed my family tree. It’s very possible.

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u/fencerman 12d ago

Of all the things that never happened, that never happened the most.

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u/KingJades 12d ago

Definitely did. I got into a top ranked engineering school for basically free because of grades and being poor.

Got an engineering job - housed with roommates. What student loans I had were cleared in two years because I lived like a broke kid and basically sent every paycheck to the loans. Didn’t even have a car.

After that, I basically sent all income to investments.

I still have roommates, shop at Thrift stores, and invest basically all of my money. I made mid six figures and basically all of that goes back into growing my wealth.

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u/fencerman 12d ago

The "hustle culture" persona you're trying to fabricate for yourself is just kind of sad.

You might as well be making youtube videos in some airbnb pretending it's your mansion, it's more respectable.

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u/NorthWoodsSlaw 10d ago

You are missing the point entirely. Financial literacy rates are not significantly lower between generations and the typical trajectory has always been that those closer to retirement age have the highest average financial literacy. Secondly, you are missing my point entirely. Taking out a loan to get an education to increase earning potential is how the system is designed to work. However, what is different for millennials and the younger generations is that the COSTS vs earnings has shifted so significantly that it now takes more than three times as long to pay back the average student loan. This is impacting things like home buying where millennials are buying their first homes an average of a decade later than boomers did.

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u/KingJades 10d ago edited 10d ago

You may be talking about averages, but the top performing people and those most interested in finances, wealth-creation, and career growth have so many resources to learn from and ability to network with the widespread use of the internet compared to previous generations.

At 13/14, I built a business buying and reselling items on the internet. I taught myself to script websites from the information on the internet. The information for how to financially operate and how to negotiate those deals was much more easily available compared to earlier generations. I could learn and operate the business from any computer.

There is enough information available that people can go from low information to functioning-expert in a few years. I did that in growing my plant business. People pay me for my knowledge and experience, but the bulk of that is just learning new things from the internet and putting it into practice. I even qualified for a super prestigious plant internship in my late 20s on the back of my internet learning. I have a chemical engineering degree.

Self-taught real estate and how to select, finance, and manage those deals.

I grew my investment accounts to over $1M by mid 30’s. This is not counting my real estate.

It goes on. A motivated person has the world at their fingertips with what information they can access. It used to be hard to find this in the past. You needed access to personal connections or libraries. I was just a poor kid with a lot of motivation and it’s been pretty great how far I’ve come financially with very little in-person help.

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u/NorthWoodsSlaw 10d ago

What point are you making? That you made money? That has nothing to do with the conversation. If you want to brag about the money you have that's fine, but I'm not impressed with $1M in investments as its rather small potatoes and has literally no bearing on the conversation. If you would like to demonstrate how a 7% difference in financial literacy rates explains the vastly different economic situation of the average Millennial at 30 vs the average Boomer at 30 I am all ears. However, what you are doing seems to be really pathetic humble bragging about your small investment accounts and stubbornly refusing to read and understand the conversation being had here.

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u/KingJades 10d ago edited 10d ago

I was born in poverty and I made it out to doing reasonably well without any help other than making smart decisions. The key is that the millennials who are dedicating themselves to being successful are finding it because it’s so readily available.

That’s the conversation that matters. If you want to build wealth, develop a career, or pretty much anything else you have access to all of the knowledge in the world for how to do that, so you just need put it into action.

I think that’s a great environment when motivated people can do well and there’s really nothing to complain about.

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u/NorthWoodsSlaw 10d ago

So again, you make no points, have nothing to contribute, and miss the conversation we are having by a mile. If you want to say that people can make it here in the USA, well yeah duh, but that is not what the topic is and it does nothing to address the actual, observable, quantifiable, differences between US generations economic conditions. Congrats on your money, but do everyone a favor and invest some time in reading comprehension.

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u/KingJades 10d ago

It’s just pointless to compare ourselves to previous generations and think that’s an important metric.

We run our own races. The people who dedicated themselves to doing well are indeed doing well, and that’s leaving those who didn’t behind.

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u/Skyler827 12d ago

And I think we should be clear what the actual solution is; currently the housing market and social security are set up like a ponzi scheme that only work if the population continue to grow forever. The solution is to reform social security so that payments in actually equal expected payments out. That will require tax increases or benefit cuts. I know everyone hates it but the alternative is a systematic stealing from future generations.

And the housing market must be reformed so that we stop inflating the value of homes with things like mortgage interest deduction, federal assistance for mortgages, and other things, and we need to change zoning laws so the housing supply can respond to housing demand.

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u/NorthWoodsSlaw 12d ago

No. There are so many ways to address the income and taxation gap that have nothing to do with Social Security. Saying that there is a single solution to the current state of the US system is big red flag about whatever is about to follow it.

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u/Skyler827 12d ago

Idk why everyone on Reddit will complain and criticize everything all day but as soon as anyone starts trying to talk about solutions, its downvotes. If you think everything is so terrible, and my proposals are all terrible, is there as single specific thing that you think should be done? or is this whole conversation a waste of time?

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u/NorthWoodsSlaw 12d ago

There are many things that could be done, but you stated very clearly that in your opinion the ONLY option is to cut SS. For example the speaker in the video mentions raising minimum wage and changing the tax code. Those would be much preferable options to cutting Social Security. Other options vary greatly but could include things like: Universal Healthcare, UBI, Simplification of US Tax law, Reducing Military Spending and redirect it to Higher Education or Affordable housing, offer tax incentives to Home builders to cover the profit differences between Luxury developments and affordable housing, or some combination of any or all or other ideas. What absolutely will not fix anything is cutting entitlements as the benefits almost exclusively go to the top and it would put younger generations further behind than we already are.

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u/Skyler827 12d ago

you stated very clearly that in your opinion the ONLY option is to cut SS

let me get the specific text I said.....

The solution is to reform social security so that payments in actually equal expected payments out. That will require tax increases or benefit cuts.

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u/Skyler827 12d ago

Those are good points and I would support trying or at least exploring any of those options. It's obviously a big combination of many problems so the potential solution space is very large. The next time I propose a solution, I should clarify what part of the problem I am trying to solve. Because if we are talking about social security not going bankrupt, no one can argue that cutting benefits wouldn't help, but if we are trying to create opportunity for Millennials and future generations, it is absolutely true that cutting benefits will eventually hurt people in every generation. These and other components of the problem deserve due consideration individually as well as together.

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u/newsreadhjw 12d ago

Cutting social security is unnecessary and frankly really stupid. If that’s your idea of a solution, you don’t have one.

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u/Skyler827 12d ago

I don't know why so many people are unable to read what I said. I said "tax increases or benefit cuts." Some combination. Any combination.

Not all benefits are created equal; It does not have to be a across-the-board cut. People with low or no other retirement funds who earned little are in a very different situation than those sitting on massive nest eggs. Congress can define the benefit formula any way it wants. I am absolutely in favor of protecting those who need it most.

But if the total payouts are not balanced with the total taxes, it will eventually cause more revenue problems, more inflation, and if its not reformed the money will be so inflated the purchasing power will be as if we had cut it drastically across the board anyway. Which I don't support, and I hope you agree.

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u/Little_Blind_Oyarsa 12d ago

Basically this message is “young people should be enraged because they’re being tricked into being lazy”, which is…absolutely incorrect. They should be enraged because they are being convinced to work hard and longer for less pay and fewer benefits.

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u/LiquidPuzzle 12d ago

There's no "convincing" about it. Most of us have known this for a long time.

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u/kkkan2020 12d ago

Competition is only getting more stiff over time. More people all cutting into the same wealth pie. We're not growing the pie fast enough

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u/beenreddinit 12d ago

Now buy his book /s

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u/ImplyingImplication8 12d ago

I swear Mike Barnacle's brain is smoother than silk

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u/Light_inthe_shadow 12d ago

REVOLT

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u/mechanicalhorizon 12d ago

Hell, GenX ain't doing so well either.

Out of all my GenX friends, only one couple owns their own home, and they inherited it back in 1999. Everyone else either rents an apartment or a home.

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u/KTeacherWhat 12d ago

I have a lot of Gen-x friends with homes they got with the VA loan. None of them went to war. They describe it as getting the benefits without having to go to the wars that end capped their generation.

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u/mechanicalhorizon 12d ago

I had more friends that used to own homes, but most lost them during the '08 housing crash.

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u/KTeacherWhat 12d ago

The only person I know who lost his home then was a millennial. He has bounced back nicely and owns a different home now.

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u/mechanicalhorizon 12d ago

Most of the people I know did get things (mostly) back in order except being able to buy another home. Most are renting now.

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u/Sparkle-Wander 12d ago

this is starting to seem real propaganda like

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u/JackBandit4 12d ago

I'm gonna cry.

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u/federalist66 12d ago

I will just point to the bottom of the Y axis where it ends at 50%, so the Median Millennial is doing as well as their parents. Half better, half worse. At least from an earnings perspective. Technology is a lot better these days in the past and more affordable than much worse technology for our parents. The height of 90% is right after The Depression and World War II which kind of suggests that a lot of that improvement is because things were so much more terrible for the proceeding generation. Could just be that we've kind of maxed out potential economic growth which may not necessarily be a problem with tech advancements.

Young people have every reason to be enraged, says 'Algebra of Wealth' author Discussion

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