Timing is everything. Conventional wisdom states that if you work hard, save 15% of your salary and invest it every month, you’ll have enough to retire. You can control what you spend. You can control, to a degree, what you earn. But you can’t control fate.
Millennials know this well. When we were entering the workplace, the United States got hit with The Great Recession. The crisis decimated entire age cohort’s job prospects. I remember many of my classmates had their hard fought job offers rescinded. At the time, thousands of Americans were losing their jobs and equity markets were tanking. Housing, long espoused as the middle class’ ticket to a secure retirement, suddenly collapsed. Houses were worth half of what people paid for them and many owed more on their mortgage than their houses were actually worth. Foreclosures skyrocketed.
Anyone who entered the job market at that time lost 3-4 years’ worth of career growth. For several years, you were lucky if you had a full time job. Recently fired workers entered the job applicant pool, to the point where you were competing for entry-level jobs with candidates having many years’ worth of experience.
Similarly, if you were planning to retire in 08/09, you were sorely disappointed. A 50% drop in the equity portion of your nest egg was a hard pill to swallow. If your retirement portfolio weighted heavy on equities, your happy plans were no more. Either you started selling stocks at these much lower valuations, or you punted your dreams of sipping Mai Tais on a beach for 2-3 more years.
We at GenYHustle seek to learn from our past mistakes. Unlike those who came before us, we wont be fooled again. Let us learn from our Gen X brothers and sisters. They too lived through an economic collapse. Their drug of choice was also tech stocks. The dot come boom of the late 90s let to a similar, if not as severe, stock market collapse. When they finally scrounged up enough cash for a down payment on a home (circa 2006), that market collapsed.
Now here we are. Once again tech stocks are reaching new heights. Tesla, a company that has yet to make a profit, is somehow worth more than Ford, a company that made $1.7 billion in pre-tax income. Bonds, the conventional safe haven in these situations, will be of no use. Thanks to both increasing interest rates and a massive deficit (the Congressional Budget Office just pinged it at $1 trillion in 2020) treasury markets are about to get FLOODED with new supply. That means that in the long run, any treasuries you buy now will be worth less later on.
So, how can we dodge this bullet. The answer is in the title. Gen Y will have to Hustle their way out of it. There’s no magic bullet to fix this. Whoever is telling you to invest in cryptocurrencies needs to get smacked in the face. The only solution is to follow this four point plan.
1. Question EVERYTHING. Don’t let a financial advisor sell you on a product if you don’t understand how it works. If he/she can’t explain it to you in a way you understand it, don’t buy it.
Don’t blindly trust the promises being made to you. Gen X bought into the myth that housing prices always go up. Boomers bought into the myth that pensions will be there to cover you in old age.
Trust in what you know, and make sure you know your shit.
2. Make sure to secure against the unlikely disasters. These are the rare events that could totally destroy you. If you’re uninsured and land in the emergency room, that could easily mean a five figure hospital bill. GET INSURANCE. If you don’t have a 3-6 month emergency fund, stop right here and don’t continue until you get one. You can’t dodge life’s surprises, but you can make sure you’re fit to bear them.
3. Prepare so that you can take advantage of opportunities. The Great Recession decimated the portfolios of most Americans. It also meant that US equities were selling at a massive discount. Those with cash on hand got great discounts.
4. HUSTLE. There’s no going around it. Gen Y will have a harder time at life than the Boomers who preceded us. There’s no pension waiting for us after 30 years of work at the same company. Hell, in a decade there may not be such a thing as a full time job anymore. By the time we retire Medicare may not exist. Retirement itself may not exist in 40 years. Gen Y will have to fend for itself. Gen Y will have to HUSTLE.
Make yourself indispensable at your job. In the next crisis there WILL be mass layoffs. Make sure that if 80% of the staff is fired, YOU’RE in the top 20% of performers.
Find another way to make money. Some call it the gig economy. Others call is side-hustling. Plain and simple, make more money. Don’t wait for your boss to give you a raise, give yourself one. Money doesn’t solve all of life’s problems, but it sure as shit makes many of them irrelevant.
Throughout this site we’ll talk about all the ways Gen Y HUSTLES. We’ll hopefully give you some new ideas about how to plan for the worst and how to clear a path to a better future.