Why you will never become a millionaire and if you do, a million will be worth nothing… probably.

You are a single person.  Or a married couple.  Or in a committed relationship.  Or you are single, but you play the field.  Or you don’t know what the hell you are.  Or you don’t know what the hell you are, and you don’t care.  Or you have a child, but you are a single mom.  Or a single dad.  Or you are just a single person with a kid, but the kid is not your biological kid, life just dealt you the responsibility to care for a child whose parents are dead.  Or pieces of crap.  Or you just wanted a kid and the biological parents conveniently gave up their child because they are in prison.  Or they just don’t care. The bottom line – you don’t know what the hell you are, you don’t know what the hell kind of life you want anymore, all you know is that you need more money and more resources and you don’t see any way to get those things because you are living paycheck to paycheck and if one more F-ing emergency happens you will be bankrupt.  Or on the streets.  This is NOT the life you imagined when you were in middle school.  But here is the thing.  This is the life you were given and to a large degree, you have zero control over what you were handed.  I’d love to stand here and tell you that things will get better, and you will make it but reality is that life is just going to get harder for the vast majority of people who are NOT Baby Boomers.  Or their descendants who will inherit the vast wealth that was accumulated by the Greatest Generation’s children.  But I jump ahead.

So here is the deal.  Bear with me, some of this will be incredibly insensitive and borderline cruel.  Here we go. 

After WW2 the returning world to peace started replenishing the 80-100 million dead people who died during the war.  Especially the US population.  The post WW2 generation, that is kids born between 1946 – 1964 numbered at their peak close to 79 million.  Their numbers will dwindle down as they reach the age of 65 for those born in the last year of the generation of 1964 and 80 for those who were born in the 1946 year.  But this is significant not because of the age they are but rather because of the time they were born in.  Specifically, the time they reached working age in the mid 1970s.  And that is why you are screwed financially. Baby boomers are the wealthiest generation to ever live on this planet.  Like… ever.  Collectively, they are worth around 80 trillion dollars and control over HALF of the US wealth even though they are only about 20% of the US population.  To put it into perspective, boomers are the kings and queens of finance and the rest of us, their kids and grandkids, are fighting over the spoils left behind.  But how did this happened and how does this affect YOU? Well, it has less to do with their abilities and smartness and almost ALL to do with their timing.  The timing of their birth, that is. Boomers born between the years 1946 – 1964 largely grew up being anti war protestors and head bangers.  They were more likely as teenagers, to groove to the sounds of new music that their parents detested because it had roots in Black American culture.  They found the concept of tuning out of society far out and right on, man, they would likely split from the stuffy confines of the country clubs and put on some cool cat threads of tie dye and headbands and catch the skinny from underground newspapers and magazines about the real world, that was a drag and totally square and caused them to be hacked off.  They wanted the world of the old to buzz off and they didn’t fink on each other, they instead got together to watch the boob tube to see the grody shit from the war in Vietnam and then they got loaded to escape reality and basically said Peace out to the world. 

And then they reached the age of 20 and started to work and they started to invent cool new shit in the 70s like computers.  And the internet.  And the concept of new music that was never around before and then they started to think like they were not just Americans but earth citizens.  And they got together and formed Earth Day to protect the planet from pollution and in the process they found that the money they made was good enough to buy up real estate.  And an economy that was going absolutely gangbusters in the 50s and 60s, largely devoid of financial crises and they bought houses and land and then they put on a suit in the 80s and bought timeshares and stock options and investments.   Lots and lots of investments and although the market crashed in 1987, most boomers were in their 30s and 40s – peak earning periods and the market came back roaring until the 2000 Y2K mess and boomers made a fortune.  In comparison, their kids, my generation, Generation X – accumulated an estimated net wealth of about 40 trillion dollars – or about half of our parents and our children, millennials, are rounding out the top 3 with about 15 trillion dollars of wealth. Here is the thing – with that much wealth comes a better life and a better life comes with better health.  The mortality rate of baby boomers is a lot lower than previous generations, certainly a lot lower than any of their previous counterparts.  So they are hanging onto their wealth for a lot longer than ever before and spending their wealth – which will result in less wealth being passed down to the next generation.  Most of the spending is on health and benefits – not items that can be redeemed by the next generation – and the most important reason why you are not getting ahead financially and will have a very very hard time catching up to the boomer generation is this. 

No amount of penny pinching or home coffee will ever close the generational wealth gap between you and your parents and grandparents.  They literally won the lottery of birth during a time when the US economy was booming faster and louder than ever before in history OR SINCE.  They had the luck to come of age during the time of tremendous technological innovation and the resulting wealth that was created went mostly to them.  They had the fortune to see no major market crashes that would have set them back in a way that would have necessitated starting over. 

Compare that to the Generation X lifeline. Born between the years of 1965 and 1980, Gen X kids grew up and went to college by enlarge during a time when college costs expanded rapidly and states, in response to the Reagan revolution, stopped largely subsidizing college costs – whereas their parents might have been able to go to college for a few hundred dollars a year or a thousand, Gen X kids were paying 20 – 50,000 dollars for a college education.  Baby boomers were in their prime earning years when Gen X kids hit the employment line and they competed not only with each other, but with their parents as well as their grandparents, who had a lot more experience and a lot more connections to snag the high paying jobs. Then 2007 – 2009 hit and the GEN X generation, who have entered the job market starting in the mid and late 1990s, found themselves homeless due to overextended home loans, and out of jobs due to corporate cutting.  The baby boomers were largely insulated due to the fact that their homes were locked into payments they set up in the early 80s when house prices were on average in the mid $35-$45K range with payments ranging from $250 - $600 dollars a month or they had paid off their houses already.  Gen X homeowners found themselves with home loans ranging from 115,000 – 175,000 with payments ranging from $1200 - $1600 and jobs which were all of a sudden gone or paying a lot less than their parents were making comparatively speaking. 

So now come YOU.  And you find yourself in this market where home prices are out of control, and you are struggling to make ends meet.  Your grandparents have long ago paid off their homes and your parents are well into their 60s just starting to enjoy retirement and they are not going to bequeath their homes just because you need a place to live.   And you are stuck paying a rent bill of $2000 a month for a 2-bedroom apartment if you can find one. You are paying sky high college tuition back and you are working at a job where you are making about half of what your grandparents made when adjusted for inflation. 

And you want to get ahead financially?! 

Oh – not to mention the small fact that a small percentage of the baby boomer generation and to a small extent the early part of Gen X, produced more billionaires than the world ever had before and wealth is concentrated in the top 5% of income earners and wealth owners more so than ever before so not only are you competing with your peers, your parents and your grandparents for scare resources, who own literally half the country, but you are competing with sky high inflation due to the massive proliferation of currency that is now sloshing around the world but held in the hands of about 50,000 people worldwide not to mention the fact that the top 8 richest men alone are worth over 2 TRILLION dollars and they are tying up so much wealth that even if you would stand on your head and whistle Dixie out of your ears, you couldn’t catch just 1% of their wealth if you lived a 1000 years. 

But fear not, because the next 4 years will only get worse due to what sure is to be another massive tax cut coming down the pipeline for the wealthiest of people in the country courtesy of the new administration at the expense of programs that might help people even the scale a little. 

So what CAN you do?  Well… you need to have a secure budget and you need to get into the midframe that although life is not fair and it sucks big wooden nickels, you still have to look long term and although you may be poorer than your parents and definitely your grandparents, you will hunker down and build the next life for your expectation that you can.  You have to be content with the fact that you didn’t win the lottery of birth, and You have to be OK with that and still go out there and do your best to make the best of a crappy situation. Just like 100 billion people have had to do before you were born and who also didn’t have the luck to be born a baby boomer.