Latest posts by FIRECracker (see all)
- How to Become FI with 6 Kids, Zero Privilege, and a Small Salary - January 11, 2019
- Our 2018 Finances - January 7, 2019
- Happy New Year 2019! - December 31, 2018
I recently read an article in the Guardian, “Why Are the Baby Boomers Are Desperate To Make Us Millennial Hate Ourselves,”about how Boomers make us feel like losers for not following their path to success.
And one of its most inflammatory statements goes like this:
“… get a good education. Get a well-paying full-time job. Find a stable partner. Buy a house and a car. Preferably, have a child. Failing any stage of this process is a reflection of your self-worth and indicates a lack of moral fibre.”
Not surprisingly, this caused a huge uproar, generating more than 1300 comments.
Boomers were quick to point out why they thought this way, “…Because you’re greedy, self-absorbed and wasteful little shits.” While Millennials fought back with righteous fury: “If we take the blame then they don’t have to. Too bad the environment is trashed, only a few of us can get a permanent full time jobs despite our high levels of education and only the richest can afford property…”
As a Millennial, I get why my peers are mad. Constantly being yelled at to “get a job” and “buy a house” is not fun. Not being able to stand on your own feet and support yourself is not fun. And the Boomers continue to remind us of this, over and over again. But there’s one fundamental thing that Boomers don’t understand, the one thing that explains why we are the “over-educated, under-employed generation”:
We’re trying to follow their dreams. And when we try to follow a dream that’s completely broken, we WON’T succeed.
The world has changed, and what were once the keys to success for the Boomer generation no longer works for our generation.
And here’s why:
#1 Most University Degrees are a Scam
Our parents have been touting the value of a university degree for years. And it made sense for them. Back when university grads were rare, having any degree set you apart from your peers and made you more attractive to employers.
But that’s no longer true. A piece of paper with a fancy stamp no longer guarantees you a job, nor is it worth the cost. In fact, it could set you back for decades, causing you to become knee-deep in debt.
American students owe a collective $1 Trillion dollars in student debt. And shockingly, most of these students can’t find jobs. Part of that reason is because many universities never bothered to train them (like the nursing student who graduated without ever stepping foot in a hospital!). Many of these universities are recruiting students just so they can make a quick buck.
So apparently, the 1% not only lives on Wall Street, but in university offices as well.
This is pretty disturbing, considering how many students are being roped into massive amounts of debt when there are high paying jobs out there that don’t even require a degree.
For example, in major urban centres like New York and Toronto, housing contractors, electricians, and plumbers can earn 6 figures without a university degree. Why? Because everyone’s so enamoured with getting university degrees, no one knows how to paint a wall or fix a leaky sink anymore.
And where there’s high demand but low supply, money flows. So before you invest hundreds of thousands of dollars in a degree, make sure you are getting a good return on your investment.
#2 Job Security is a Myth
A few months ago, I got an email from my ex-coworker, telling me that our director had been let go. Just a week earlier, her project funding had been cut, and she was asked to train offshore staff. She could see the writing on the wall, but had to continue going into work, because she couldn’t yet retire and needed the severance. This came as a shock to me. She’d out-shined everyone in the past five years, quickly ascended into management, and was on (or at least what I thought) a corporate rocket ship to glory. And even more surprising was that the bank had just released its best yearly results to date–revenues of over 2 billion.
My friend was, understandably, stressed to the point of a nervous breakdown. She has a huge mortgage, two kids in university, and a husband, who, unfortunately had been hearing rumours of impending layoffs at his company as well.
Once her sobbing stopped, tears quickly morphed into anger. “I worked long hours, did everything I was supposed to do, and this is what I get? I work hard so I could get fired?!”
I didn’t know what to say so I just sat there quietly and listened.
“And they told me it was a budgeting issue! What budgeting issue? They made $2 billion dollars this year!”
I didn’t have the heart to tell her the truth. That it didn’t matter how much the company made. It only mattered how little they spent. And the lower that number, the happier their shareholders. After all, when it came to a company’s survival, it’s the shareholders who mattered, not the employees.
I’m confident that my friend will get another job. But the scars on her psyche and self-confidence will never completely fade. I mean, after this, how could she possible trust the idea of being just another cog in the wheel?
Companies will always care about profits more than people. If it’s between making employees or shareholders happy, they will choose the shareholders. Every. Single. Time.
And in an age where work can be done from anywhere, anytime over the Internet, it’s easy to make the investor happy with cheap, outsourced labor. The idea that you can have a job for 30 years and end up with a cushy pension at 65 is laughable. It doesn’t matter how hard you work and how much money your company makes. They will always choose the shareholders over you.
#3 Houses are a Ball and Chain
2008 showed us what could happen if too many people bet on houses they can’t afford. And yet, in costly cities around the world (like London, Boston, San Francisco, Toronto, Vancouver), people are still borrowing their brains out. Like my ex-boss, for example, who, despite having a blood-clot in his leg, still works 80 hour weeks to pay off his oversized mortgage. He literally has no choice. The mortgage is a ball and chain, and he drags it round all day, every day.
Now, I’m not saying all houses are bad. But when the cost to earnings ratio is more than 10X, you’ve put all your eggs in one real-estate basket, with no way to protect yourself if catastrophe hits. You have no choice but stay at a hateful job, be tied to a city you loathe, and watch your health deteriorate. When housing costs are skyrocketing much faster than our salaries (see “House Prices Versus Earnings Since 1970” below), it makes more sense to rent, and invest the savings in a balanced portfolio, generating passive income so you can do whatever you want.
So how do we succeed in a world where everything our parents have hammered into our brains for decades no longer works? What should we do instead?
#1 Stop Paying for Degrees with a Bad ROI
Don’t invest hundreds of thousands in a university degree, only to graduate with mountains of debt and zero job prospects. I realized this early on, so I invested in a degree that only cost me $50,000 over 5 years (which I paid off by working while getting my degree), but has returned $600,000 over 9 years. So that’s a 1200% return or 130% return per year. Compare and contrast that with my friend, who paid $40,000 for her Philosophy degree, but has not been able to find a job in her field. To this day she’s still paying off her debt, with her husband’s salary.
If you picked a degree that doesn’t quite give you the bang for you buck, don’t worry. There are plenty of jobs out there paying over 50K/year without needing a college degree at all.
Here are 50 of them!
And check out this Millennial who went from underemployed waitress to a $72,000/year in only 6 months:
Now, I know that some of these fields are not what you’re passionate about, but before making any judgments, please read my “You Can Have It All. Just Not All At Once” article.
Once you realize that your short-term hustle is worth a lifetime of freedom, you’ll see that your job is not your life. Far from it, once you start invest in yourself, instead of shady “for-profit” universities, you’ll be the one laughing all the way to the bank.
#2 Develop a Passive Stream of Income
As smart and independent Millennials, we don’t like following other people’s made-up rules, and we don’t like being anyone’s bitch. And what better way to NOT be anyone’s bitch than to have our own stream of passive income. Once we have that, we’ll be fully self-reliant, and we’ll never be anyone’s bitch again. Not the bank, not your boss, and definitely not the Boomers.
When you have enough FU money to generate enough income at a 4% withdrawal rate to offset your living expenses, you’re free to live however you want.
#3 Stop Overpaying for Houses. Rent Instead.
I’ve been called all sorts of names, like “Loser”, “Idiot”, and “Dumbass”, for not owning a home. And most of these names came from my own parents. They’ve been pushing me to buy a house for the past 8 years, and I’ve steadily held my ground and resisted following the herd.
This has changed my life dramatically.
Well, when my parents bought their house in the late 90s, the cost to earnings ratio was only 2X. Now, even with a banker’s salary, the cost to earnings ratio is 10X for me! That’s 500% the burden my parents had! Which is just ridiculous, because housing prices have been skyrocketing, but salaries have barely kept up with inflation. So why buy when I can rent for much less, and have the freedom to leave whenever I want.
Because I rented instead of owned, I could leave my job whenever I wanted, travel the world, and live the life I’ve always dream of. My friends, on the other hand, are stuck at their hateful job, working crazy hours, and killing themselves over their mortgages.
And sure, their houses may appreciate over the next 20 years, but in that time, my portfolio will have beaten those gains (see “Housing vs stock through the years” below), and I will have lived a happy stress-free life in early retirement, while they live at the mercy of their corporate overlords.
Many of my friends think renting means throwing away money. But, what they don’t realize is that by covering the rent with the dividends from a diversified portfolio, you’re actually renting for free! This gives you the freedom to travel anytime you want, without the stress of maintaining a property.
So by choosing a degree with excellent ROI, creating my own passive income stream, and not buying an overpriced house, I’ve managed to live the life of my dreams by NOT following the Boomers’ Dream.
Boomers think we are lazy and irresponsible, but what they don’t understand is how much the world has changed. They want us to follow their dreams, without realizing that their dream is broken. Going to university, finding a stable job, buying a house and working until you’re 65 is no longer possible. We now live in a world where university degrees are a scam, stable jobs are a myth and houses are a ball and chain. What worked for boomers no longer works for Millennials. So in order to be successful in this new world, we need to stop getting overrated degrees (with bad ROI), develop our own stream of passive income, and rent instead. Once we become completely free of our dependency on greedy corporations, we can follow our own dreams. We can do all the things our generation values: happiness, fulfillment, a life of adventure and passion, and using our endless creativity to change the world. Now that’s a dream we can all get behind.
So let’s prove to the Boomers we’re not “greedy, self-absorbed and wasteful little shits”. Let’s stop following their broken, outdated dreams and follow our own Millennial Revolution instead!
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