Is My Generation Screwed?: A Father and Daughter Talk Finance

Wednesday, April 24, 2013

Their parents might have been investing in 401(k)s and becoming home owners when they were in their 20s, but for many 20-somethings today, those conventions don't seem possible.

But what financial advice should they be learning from their parents' generation? And, is that advice still lucrative given our changing economic climate?

As co-founder and editor of The Billfold, Logan Sachon, has been exploring some of these issues. In her recent article, A Conversation With My Dad About His Money and My Lack Thereof, she turns to her father, Mike Sachon, for some insight.


Logan Sachon and Mike Sachon

Produced by:

Jessica Miller

Comments [16]

dave from new zealand

ALL THE BADY BOOMERS HAVE LEFT IS debt and low paying jobs , if you ve got one that is with have been collectively screwed over people

Jun. 29 2014 03:58 AM
montana from turner maine

can you say "NEW WORLD ORDER" -the gov gets their surveillance cameras - 1984 - turn in your neighbor.

Apr. 25 2013 12:18 AM

This is the issue re: the entitlement debate. Logan is going to be old and very poor someday. We are paying premium benefits to her dad...paid for by her and others like her.

Apr. 24 2013 11:19 PM
Zach from Seattle

I'm 25, college educated, single with no kids, gross around $50k, and between my maxed SIMPLE and Roth IRAs (and company matching 3%), I'm able to put just under $20k a year into retirement investments that are directed by a personal financial adviser. I also rent a home with a gorgeous view of the Puget Sound with 3 roommates, own a little pickup that gets me around, have money for international travel, plenty of beers with friends, organic food, and any emergency that comes my way. My goal is to retire no later than 40.

It is quite easy given my current position in life, especially with the sentiment of thrift that our generation has. Unfortunately, for many, every extra dollar earned is a dollar spent. I guess the only reason I'm mentioning this is to say that despite college debt, poor job outlooks, and the typical "Young, Broke and Fabulous" mindset, we're not all in such shabby shape.

Apr. 24 2013 05:09 PM
David from New York

Logan's comment doesn't just sound familiar, it's symptomatic of a really important aspect of the new American economy, and one I'm surprised doesn't get reflected in financial journalism. Logan doesn't make enough money---that's true for an enormous number of working Americans. The causes of this, while familiar, are so vast it's hard to grapple with them---the hollowing-out of the middle class, the disappearance of American unions, the increasing share of GDP captured by the finance sector---but for those who want to understand the reasons Logan has no savings, it's imporant, really important to grapple with them.

It's not primarily a matter of personal "choice," no matter how soothing that thought can be to the moral egos of older generations. The American economy simply doesn't do something it did fifty or even forty years ago. Viz., support jobs that provide an entres into the middle class. In the 1960s, a high school graduate could get a union job that would support home ownership, a car and a television, and health care and education for the next generation. Someone who went through college could do even better. That's simply not true anymore; a college degree no longer provides that entres (5% of janitors have a bachelor's!). Add to that that college is far more expensive, and often financed with debt, and the low savings rate among Gen-X and Gen-Y isn't terribly surprising. As Logan notes, it's not just hard to save when you're paycheck-to-paycheck, it's impossible. And that's the condition for a lot of people, because the American economy just doesn't pay fairly for work anymore.

In 1992, Bill Clinton ran successfully for president on a campaign that stressed that people who "work hard and play by the rules" ought to be given a fair shake. (For some reason, the media forgets that aspect and focuses on Carville's "it's the economy, stupid" sign.) The economic vulnerability felt twenty years ago by American workers who hadn't done anything wrong---they had done what they were always told to do, and what was promised to them to be a ticket to a decent life---was remarkable then, and it is only worse now. Why, then, is it so hard to recognize this essential condition of the new American economy? It's really puzzling to me.

Apr. 24 2013 04:24 PM
Alan from Brooklyn, NY

I'm 25 and have three Roth IRAs and maxed-out 401(k)s. I have a good job, a cheap apartment, and don't own a car. That pretty much does the trick.

Apr. 24 2013 03:57 PM
Caylor from Portland, OR

I found the conversation frustrating because of its "individual responsibility" focus. There is much more going on with the economy than kids with credit card debit. I am a 38 year old woman with no credit card debt, no school debt (I earned scholarships), emergency savings, but no real retirement savings. I've been employed since college, but jobs in the non-profit sector (jobs women often do) are low paying with little to no retirement. Sure, many people have a lot of debt, but the days of employer pension plans and good retirement options are over. It's a shift in the economy, not in the responsibility of this generation.

Apr. 24 2013 02:06 PM
Guy Gold from Austin, TX

Our economic, retirement, and immigration policies haven't changed much even though there is a new reality most Americans are loathe to accept:

Apr. 24 2013 01:35 PM
Guy Gold from Austin, TX

Since the young generation is in a race to the bottom with globalization, we need to adopt the Texas model nationally so young people have jobs. We kept jobs in West Texas by adhering a 3rd world model to safety inspections and oversight to make sure the company could compete in the global economy. We need to lower out building standards to the point it's no more costly to build manufacturing plants in America than it is in Bangladesh:

Half of all college graduates are in high school equivalent jobs in part because regulation in America prevents corporations from being able to build cheap facilities to hold workers in (we also need to lower our legal liability standards so when workers are killed the corporation doesn't suffer):

This is intended to be "tongue in cheek" to show the absurdity of our current economic problems which are tied to the inability for workers to build retirement.

The other major for problem-largely ignored by the media-is our immigration policies haven't changed since 1970 since America hit Peak Oil. Our ability to provide immigrants with jobs historically started to see problems when America hit Peak Oil in 1970. The Bostom bombers were granted asylum and lived in America on welfare. When we have the worst unemployment rate since The Great Depression-we need no immigration until that situation improves-be it both legal and illegal immigration. When you have a large pool of unemployed workers you don't improve their plight by bringing on more unemployed workers.

Apr. 24 2013 01:26 PM
Guy Gold from Austin, TX

Back in the 90's Thornton Parker wrote a piece in Barrons that I believe, correctly concluded the stock market has become an intergenerational ponzi scheme. The same demographic problems that face Social Security and Mecicare (too few workers to too many retirees) will soon face the Baby Boomers and they start selling stocks to finance retirement-to a younger generation that is too small to buy those stocks, and thanks to globalization have seen wages stagnate for decades and an unemployment rate of young people not seen since The Great Depression.

The only reason the stock market is now at historical highs is that the Federal Reserve is trying to fix a broken economic model by printing a lot of money, loaning it to banks, who are buying stocks and other risky financial investments. When the Fed is forced to raise interest rates-the meltdown that will occur-is going to make the 2008 Financial Crises look like "them good old days."

Since God will not tell you the day you will die-it has always been a questionable decision to sell out today's standard of living (what you do when you save) for tomorrow's standard of living (life is guaranteed to no one tomorrow) particularly when tax rates are at historical lows creating huge budget deficits. Even if you can time the market and sell out before the sure crash/castastrophe, you will likely be taxed at significantly higher rates on investment income.

This means the logical thing to do is save nothing. Get your house paid off so that when you are old and no longer able to work (if you live to that age) you can live off Social Security. By that time you will be too old to enjoy life as you can by spending your earnings at a younger age.

This is logical and is entirely the opposite of the fantasy Wall Street sells the public.

"Retirement" was a uniquely American adventure. It like many other things that built an American standard of living never seen before-was sacrificed when globalization was adopted so US multinational corporations could hire overseas cheap labor.

Carpe diem.

Apr. 24 2013 12:58 PM

I am 29 yo male and I feel the same as Logan. Although I have no debt and some savings, I have no retirement accounts or plans for retirement. My attitude is, either I make it large, or move-in under a bridge somewhere.

Apr. 24 2013 10:32 AM
Ruth Lewin from nj

Now in my mid sixties, I should be ready to comfortably retire. My husband and I owed a successful business for 25 years, buying a suburban home, putting our children through college, eating in fine restaurants and seeing Broadway plays. A nice life until my husband developed dementia a decade ago. The resulting bad business and investment decisions depleted our retirement funds. My fault though. I should have paid more attention. I am working full time and will continue they throw me out.

Apr. 24 2013 10:18 AM
Angel from Miami, FL

A girl named Logan? Johnny Cash could have written a song about that. Anyways, set up emergency fund first, then tackle credit card debt. Having happy creditors isn't a priority for the homeless.

Apr. 24 2013 10:03 AM

Given the predictions of Climate Change, planning for a financial future 30+ years out may be futile. Our environment is real; our system of economics is a modern invention and is "virtual"

see on utube David Suzuki's An elder's vision for our sustainable future

Apr. 24 2013 09:49 AM

to Angel: Speak for yourself. I am a low income boomer and I was, am and always will be grateful for My parents generation.

Apr. 24 2013 09:38 AM
Angel from Miami, FL

Twenty-somethings?! Gen-Y should worry just looking at Gen-X. Aside from some yuppy enclaves most of Gen-X'ers still aren't prepared for retirement. We can't trust that government safety nets will still be here 20 years from now. But we also can't trust the financial market's "products" will still be around 2 years from now. Social Security, 401(k)s, Medicare, and Blue Chips are no longer as reliable for future generations as it was for the homecoming WW2 soldiers and their [ungrateful] Boomer children.

Apr. 24 2013 09:21 AM

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