When Robert Farrington, an expert on student loan debt for College Investor, released his estimates on the average net worth of millennials, it became clear that the stories about millionaire teenagers weren’t speaking of the normal experience for millennials.
“The study states millennials who wish to be worth more than the average Joe should aim to secure at least $10,400 to their name,” Robert Anthony of Elite Daily reported. “Last time I checked, $10,000 won’t last you a month in New York City if you actually have a life.”
The high cost of city living and looming student loans for college graduates, however, complicates the millennial ability to save.
(Screenshot via TIME)
“Millennials do have some of the highest student loan debt rates of any generation in history. The average millennial has $30,000 in student loans,” Farrington wrote.
Additionally, the Great Recession must be considered, as the economic state looks vastly different than eight years ago.
“Depending on when the millennial graduated college, they could have entered a terrible or awesome job market. Remember, some millennials graduated from college before the financial crisis of 2007, some during it, and some after it. When you graduated from college played a huge role in your earnings right out of school,” Farrington noted.
Critics cannot forget, though, about the generations preceding Generation Y. While millennials dominate media attention, baby boomers and Generation Xers are behind the scenes recharging their careers.
Many baby boomers “have engaged in ‘encore careers,’ starting over as entrepreneurs,” Michael Stone of Forbes reported.
Last year, a Gallup study found that individuals over 50 are dominating the entrepreneurial sector.
“More than 80 percent launch ventures as a lifestyle choice or to boost income and are twice as likely as millennials to plan to start a business,” the study found.
Generation X is looking up, too. Making up “25 percent of all adults—in sheer numbers, they’re the third-largest generation (after boomers and millennials),” Rieva Lesonsky of American Express reported. “But Gen X has more spending power than any other generation, with 29 percent of estimated net worth dollars and 31 percent of total income dollars.”
With their predecessors restarting their careers and achieving financial contentment, millennials need to follow suit. Although initially overlooked by millennials, older generations remembered that disciplined saving and cautious careers would go a long way in their aging years, opening doors for new careers and income growth.
Farrington suggests that young Americans pay a little more attention to how they, too, can grow their incomes and get above the average net worth. “Eliminate your student loan debt, boost your income by 25 percent, and save at least 25 percent of your income,” he says.
