Does Gen Z Have it Harder Than Millennials?

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“I am so sick of you people bashing Boomers…”

I was going through the usual bag of hate mail our site attracts, and was about to hit delete on yet another angry ranting Boomer when something he said caught my eye.

“Millennials won’t be young forever, you know. Enjoy getting old and becoming the butt of everyone’s jokes!”

He does have a point. Time marches forward, and one day we would get older, and maybe then the next generation would see us as antiquated as Boomers do to us.

I just didn’t expect it to start happening so soon.

The signs were building, but I ignored them. Gen Z started calling Millennials lame and “cheugy,” and I said nothing. Then Millennials started excoriating Gen Z for being lazy and entitled, and I still said nothing.

But when Gen Z started blaming us for the housing market, I was like “Whoa whoa whoa. Back it up there, buddy.”

We didn’t fuck the housing market up.

The housing market was fucked before we got here.

But I am sympathetic to the fact that from their perspective, everything seems worse now. Whether it’s the spiralling cost of living, or climate change, or political instability, everything seems worse than it was just 20 years ago, so it’s natural for them to blame the generation before for all their problems.

But first, let’s examine the specific issues affecting the financial lives of Gen Z and try to answer the question: Does Gen Z really have it harder than Millennials?

The Housing Market Is Insane

Gen Z, if you are angry at how unaffordable real estate is, you are preaching to the choir.

When we started this blog, housing already cost an arm and a leg, and I argued at the time that going into massive debt to buy an overpriced house was a terrible idea. And that was when an overpriced house cost “only” $600,000. Now, an average detached house costs double that. Even with the recent housing slump caused by rapidly rising interest rates, housing is nowhere close to returning back to 2015 levels, let alone anything resembling remotely affordable.

So Gen Z, you definitely have it worse.

Interestingly, while our generation was consumed with angst about how hard it would be to afford the mythical house with the white picket fence, Gen Z seems to have given up on it entirely. For them, it was never a case of unfulfilled promise, they were never infected with the dream of home ownership in the first place.

In some ways, this is not entirely a bad thing. This blog argued that when real estate is too expensive, the correct move is to rent and invest it instead. And while some of our Millennial brothers and sisters listened and followed along, the vast majority didn’t. During the pandemic when interest rates were stupidly low, they bought more house than they could ever afford, and are now staring down the double barrel of rising interest rates and falling home prices.

Over the next few years, as the consequences of their actions manifest in higher mortgage payments or negative equity, some will lose their homes. Others will go bankrupt. And the rest will become utterly and hopelessly dependent on their job for the rest of their lives.

So a nihilistic “Can’t win, don’t try” attitude when it comes to home ownership can serve Gen Z well. The trick, however, is not to use that as an excuse to just spend recklessly on designer bags and luxury goods. Turning that cash you save into passive income is the key to financial stability, but to do that you have to learn how to invest

Remember, as the saying goes “poor people buy stuff. Middle class people buy houses. Rich people buy investments”.

Student Debt Is Crushing

Student debt is also something that Millennials have plenty of experience in, and on the surface it seems that things are worse for Gen Z since the cost of post-secondary education just keeps going up and up.

However, Gen Z has one big leg up on Millennials, and that’s a little something called the SAVE Repayment plan.

This program just came into existence this year, and in my view is the single most consequential financial policy that the Biden administration enacted. I’m not sure why he’s not getting more credit for it.

Basically, SAVE caps the monthly payment on your student debt to a percentage of your disposable income, meaning if you don’t earn enough money (which is determined by a formula you can find on the government’s website), your monthly bill goes down, potentially dropping to zero. Crucially, if this payment is not enough to cover the interest portion of your loan, the government pays the interest for you.

If you don’t know why this is such a big deal, you have no idea how bad Millennials had it. When Millennials were faced with a student debt that they couldn’t afford, not paying the monthly minimum meant that the interest would get added back onto the loan. This meant that every month you couldn’t pay, the loan would get bigger. And bigger. And BIGGER!

The fact that Gen Z will never have to experience this is a huge leg up that they have over Millennials. So even though college might be more expensive, I think Millennials had it harder in this one.

Jobs are Unstable

Again, preaching to the choir. Job stability was already swirling the drain when we were working, only for us the big baddie was outsourcing. Nowadays, it’s outsourcing’s newer, hipper, techy cousin, AI. But the effect is the same. Jobs are unstable, layoffs can happen at any time, and benefits like pensions have mostly gone the way of the dodo.

However, Gen Z does have a weapon to fight back that Millennials mostly didn’t: Geographic arbitrage.

When we first started the blog, there weren’t really that many people like us. And by that I mean people who were living nomadically while making an income from our laptops while sitting on a beach in Thailand.

As soon as we started doing it, we realized the power of this setup. We could earn an income in Canada and the US, get paid in Canadian and US dollars, and spend it in a country where the cost of living was a fraction of what we paid back in Toronto. We thought we had stumbled across the biggest life hack ever, and even though Tim Ferriss had coined the term in his book The 4-Hour Workweek way back in 2009, most jobs simply couldn’t be done online.

Then the pandemic hit.

Not a lot of positive things came out of that dark, dark period, but one of the few good things it did was it forced digital nomadism and remote work to become mainstream. Pretty much every workplace was forced to experiment with remote work, even jobs that nobody would ever think to make remote, like doctors or film production. As a result, remote work is now an option available to you by default.

That’s huge, because the benefits of Geographic Arbitrage are now accessible to Gen Z in a way that Millennials never experienced. If we had gone into our boss’ office and asked to make our job remote so we could travel to Thailand, we would have been laughed out of the company. But Gen Z can actually pull it off, and if they can combine a high paying job with a low-cost location, they can sock away enough money to offset even the threat of random layoffs.

Of course, the big problem with all that is…

They’re Getting Bad Advice

Millennials were fed a lot of bad advice too, mostly by our parents. Get a job, buy a house, work until you’re 65, that kind of crap. That’s why we started this blog. We wanted to be the resource to other people that we never had.

Gen Z gets fed a lot of bad advice too, but for a different reason. Despite the fact that Gen Z spends even more hours a day connected to the internet than Millennials did, unfortunately they spend the vast majority of that time on…TikTok.

Those aged between 16-to-25 spend three times longer on TikTok in a week compared to Instagram and Snapchat. It’s only competitor is YouTube, but even then TikTok is still twice as far ahead.

Gen Z are spending more time on TikTok than any other app, Thred.com

Now, I’ve got nothing against TikTok. It’s great for dance videos and funny content. One thing it’s not good for, however, is financial advice.

It’s the format. TikTok’s algorithms prioritize short-form video content, typically less than 60 seconds, and that’s just not a good format to teach someone meaty financial topics. You need more time and more attention than a 60 second video can provide.

And don’t get me wrong. There are lots of financial influencers on the platform that are trying to do the right thing. But if you don’t know who to follow, the stuff that gets recommended to are videos like this.

@digitalwins Us in 5 years>> #wifimoney #success #mindset #motivation #moneytok ♬ original sound – Stable Minds

And this.

@crypto.smith #crypto #cryptotok #altcoins #moneytok ♬ Tourner Dans Le Vide – Indila

And this.

@parrot.finance THE BREAD MAN 🥖 #trader #stock #stocktok #money #moneytok #livetrading #daytrading ♬ original sound – Parrot Finance

So while Millennials had it tough here, they could find blogs and books that would teach them how to invest, build passive income, and escape the rat race. Gen Z, on the other hand, is going to have a much harder time figuring out who to trust because the TikTok platform seems to make finding good advice as hard as possible.

Conclusion

It’s a truism that every generation thinks they have it harder than the previous one, and every older generation thinks that the next one is lazy and entitled.

The truth is more nuanced. Every generation faces challenges that are new, and because of that the solutions that the previous generation used don’t work anymore. That breeds resentment. But every generation also has new technological innovations and structural advantages that the previous generation didn’t have access to. That also breeds resentment.

Who has it worse? Gen Z or Millennials? Honestly, I think it’s a tie. It was hard for us, and it’s going to be hard for Gen Z.

That doesn’t mean that there isn’t a solution, though. But we do have to work together to figure it out.

And above all else, never forget the one beacon truth that unites us all, and that is…

All of this crap was Boomers’ fault.


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15 thoughts on “Does Gen Z Have it Harder Than Millennials?”

  1. As an experiment, I’m tempted to funnel a small amount of money (few hundred $$) and “invest” using the principles recommended by the dumbest of dumbasstiest tic-tok “influencers” (like the examples above), just to see how bad (or good) the advice actually is….. my only problem is I can never get beyond the first couple seconds of any of those videos.

    1. A thought provoking article. My tuppence ha’pennys worth:
      1. The labels (Boomer, Gen Z etc) arn’t helpful and lead to pointless and often inaccurate generalizations.
      2. It’s cyclical and the samr inter-generational issues have been going at least since the 16th Century (my period of study) and probably much younger. The only change is the dumb labels.
      3. I’m a Boomer so I despise you all because you are lazy and entitled (just as my grandparents felt about me and my contemporaries).

  2. Every generation feels worse off. I’m GenX and when I graduated with a Masters Degree, the best job I could get was a receptionist at a low entry pay because we were in a major recession. My student loans were at 9% because interest rates were high. Mortgage rates were coming down from 21%. Climate change, nukes, etc were the same issues back then. Talk about feeling hopeless.
    So where am I now? We came out of a recession, I got into progressively better and higher paying jobs. I aggressively paid my student loan off to get it off my plate. I did buy a house when the market crashed in Toronto (a 30% drop in prices) – mortgage rates were still 6%, but definitely the cost of a house was lower (I’m not recommending anyone buy a house in this market). Now I am ready to FIRE and I’d be viewed as having it easy by Millennials and GenZ.
    We all have it hard and need to figure out how to navigate the situation we are presented. I didn’t grow my wealth even though I was a saver because of high rate MFs and no internet to do research, not having the time or energy to find books and thinking I couldn’t do this myself. It’s taken years to get out of that mindset. Today’s generation has access to low cost brokerages, fractional shares, side gig opportunities that are remote, etc. These didn’t exist for me. The key is to save more than you earn and to figure out how to live within your means, no matter which generation you are!

  3. Every generation thinks they had it worse, so we can all have some empathy. But this article is spot on. GenZ has it tough, but the good thing is they are young! Time is your greatest asset. You don’t have to be on anyone’s timeline but your own!

  4. I think your last line stating “It’s all the Boomers fault” was a bit tongue in cheek? Or maybe not. I agree with Frugal X above well said – every generation thinks the next one is lazier and the next one always things that people had it better in the past.

    And I would also say that specific to housing it is BS to state that is all boomers fault. Most Boomers I know (I am on the borderline but would probably be called Gen X) were fortunate to buy a house when affordability was better. But many stayed in that house for most of their lives, took cheap vacations and paid off the mortgage fast knowing debt was bad. Housing is expensive for one main reason, low interest rates and people taking that as a sign to buy more than they need, flip and move up and take on excessive debt etc, as you just said. It is a collective result not any one generations “fault”.

  5. “Hard Times Create Strong Men, Strong Men Create Good Times, Good Times Create Weak Men, Weak Men Create Hard Times.”
    To bring this up to date i would substitute the word “people” for “men” but otherwise this statement rings true. I think we are at the “weak people create hard times” as the average politician has the IQ of a sweet potato, ultra-capitalists have been allowed to run amok, and it seems like many younger employed people are not as focussed on their jobs as in past generations (hybrid or remote demands, work/life balance, mental health stuff – all of which really wasn’t ever recognized or discussed by employees 20 years ago). However, corporate mindset has no loyalty to their people anymore either. Its a 2-way street.
    We have no resemblance to the Greatest Generation, who as evidenced by their accomplishments (and yes, they certainly had their issues like racism, social conservatism, etc), were made of iron.
    There are many ingredients that led to the stew we are currently in. Inflation, rising rates to fight inflation, stoopid housing prices, overspending libs, populist culture-war hawk cons, pathetic lack of accountability (Wall St for 2009, Trump (!!!), cryto wankers, libertarian conspiracy theorists (yes, after a certain point, words can kill: J6), climate change…. I would hesitate to blame any generation.
    Boomers were dedicated to the workplace and tried to raise their families, much like other generations. Gen-Z embraces work/life balance, and not much interest in making families, and if they care about politics at all, are very polarized. They are nearly opposites.
    No generation can be blamed for the problems of any current generation. No generation would intentionally screw over their grandchildren, however different they may be.
    So how about we stop the “OK Boomer”, etc kind of stuff? It distracts from the actual problems, and just causes hurt feelings and anger.

  6. Thoughtful post, however I disagree on one key point. Neither Millennials or Gen Z have it “hard”. Historically speaking, it has never been easier to live a full lavish life with healthy food, sufficient shelter, and opportunities to communicate with friends, family, and the world. I would argue that a large portion of (at least the Western world) live like the royalty of the past. Yes, we have many challenges to overcome, but its important to keep in mind how good we have it these days.

  7. “Climate change”
    The climate has been cycling quite naturally for thousands of years. If you are worried about “climate change”, then you are allowing yourself to be manipulated by alarmists who want you to voluntarily surrender freedom. I was in high school during the late 1970’s and global cooling was all the rage. We wondered whether we would have summers again. The fact is that we were simply in a cycle that involved cooler weather. When the cycle shifted, global warming became the fear until that cycle eased and the alarmists had to switch to “climate change”. Take a look at the graphs that support “climate change” and notice that most of them start from the cooler cycle in the late 1970’s so as to make today’s temperatures look like a warming trend. Charts don’t go back 100 years (data is available) because including that data in a chart shows a wonderfully stable and cycling climate. Of course some areas are going to show “evidence” of warming because local urbanization raises local temperatures. Fear not, pollute as little as possible, give thanks, and get on with it. I enjoy this blog and everyone’s comments.

  8. Since the first day of human cooperative living, we always have the 10% on top and the 10% on the bottom of the population theatrical drama.
    The remaining 80% of the population is the actual foundation of the society that is steadily and cautiously moving toward progress (the NORMAL PEOPLE).

    And if you are agree with this analysis, you will clearly see the bottom 10% is the fallen behinds in every generation (Boomer, X, Millenials and YaDiYaDi).
    Note that this 10% on the bottom includes young children, elders and sadly young adults who chase “SHINY OBJECTS” and of course petty thieves.

    What about the 10% on top? They are the early adopters of the leap in advancements and they are SELLING their version of understanding of the advancements.
    Note that this 10% on the top includes the GENIUSES and the SHARKS.

    Ironically, the top 10% and the bottom 10% have one thing in COMMON; they want the remainder of the 80% of the population pay for their livelihood.
    So here is the million dollar question – are you willing to pay?

    If you live long enough, the answer is unequivocally “YES”.
    When you are paying the 10% on the bottom, it is called “CHARITY”.
    When you are paying the 10% on the top, it is called “INVESTMENT”.

    As a member of the NORMAL population, all you need to figure out is the “Goldilocks” ratios of “CHARITY” and “INVESTMENT”.

    Ignore all the dramatic noises as they can make you feel like there is something wrong with your life and it is urgently needed a quick fix.

  9. Agree with what you shared!
    Small nuance – as a plex owner, even with the stupid rising interest rates, I am glad to be an owner and not renter (as rent prices are going up too). I am glad to be able to have control over the roof on my head, and if houses that were worth 600 000 are worth double now, that’s a pretty sweet ROI!
    Although geographic arbitrage is great, it’s less feasible for parents of young children who want to stay near grandparents (as you now understand!). Different choices, different outcomes (by the way, my tfsa and resp are also maxed).

    Hope life with a little one is treating you well and breastfeeding got easier!

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