The divide gets bigger as you get older...

[Anonymous]

It's not just high paying jobs, it's life.

DH has a couple childhood friends. One was from a very wealthy family and was the sole recipient of his father's business and the entire family inheritance. He squandered away the inheritance buying expensive toys and fast cars. Now, in his 60s he doesn't have any retirement savings and drives a truck for a living.

Another friend and his wife 15 years ago were struggling to make ends meet as they unexpectedly had a set of twins and ended up with four very young kids. He had a job at that time, but it didn't pay enough for them to live comfortably.

They both worked very hard and the wife had to start a career from zero after staying at home with kids. She is now in upper management. They are well financially, put all the kids through college.

[Anonymous]

Anonymous wrote:

The "Great Wealth Transfer" isn't even close to happening. The boomer parents are now inheriting their parent's wealth. The millennials won't see that money for 10 - 20 + years. Once that happens it will further exacerbate this divide.

I doubt you'll see this money. It will be given to expensive long term care facilities and sent to Indian scammers.

[Anonymous]

Anonymous wrote:

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Anonymous wrote:As a 50-something, I’m finding the ultimate divide is when you start seeing people announcing retirements in their 50s. They go on to sit on boards or serve as trustees of institutions. Some of it may be requiring different levels of money to feel comfortable retiring, but being able to leave the corporate grind in your 50s is winning.

This. Good friends retiring at 55 and 53, husband and wife. $2m home paid off, kids out of college and independent, healthy investments of stock and RE, and annual $250k income (guaranteed).
Very happy for them…they won the race. Hoping we can get out in early 60s.

I am an older millennial. I suspect we won't have this problem the way older generations did. Either you have family wealth or you don't and where we are, you already know who has it. I know very few "self-made" people.

DP.. you are still pretty young.

For us, the divide is not only income, but age of kids. Most of my friends have kids about my kids' ages. But, I have one friend who had kids much later. Their kids are still in ES. Mine are in HS. In four years, I will be an empty nester, while my friend is still dealing with PTSAs. We plan on retiring in four years and traveling outside of peak summer time, like we used to pre-kids. My friend is stuck traveling around summer, like we used to be. We talked about traveling together, but they have a lot longer to go before they can travel like we hope to.

Another friend was a sahm for 15 years, just went back into the workforce as her youngest hit HS. Because they were single income for 15 years, they haven't been saving for retirement like we have been. So even when they become empty nesters in 2 years, they will have to continue working until 65 to save more now for retirement.

Yes, different life choices lead to a divide later on in life.

Late 30s/early 40s means I am NOT pretty young. I have already run into very quiet reminders of my age at work. The point I was trying to make is that we all had our kids later, we all bought houses later (if we were lucky), we all have student debt--the people who made it, made it. My generation isn't going to retire. I don't care what you say about the fact I save over 10 percent of my salary with matching since I was 22 and I have multiple grad degrees. I don't know why the older generations don't get that we live on a different world and not a better one. I even worry about inheritances that millennials are supposed to get because that money will be gone from high health care and elder care expenses. That great transfer of wealth happened already (via trust funds) or it is not going to happen.

There are plenty of counter examples of millennials who are doing quite well without direct generational wealth transfer. I am the same age as you. I graduated law school with no student loan debt because I picked schools that gave me money and my parents helped out a little. DH had an athletic scholarship for undergrad and his consulting firm at the time paid for his MBA. As millennials, we benefited from starting our careers during the great recession in that we bought our home and started investing in our 401ks and brokerage accounts at the bottom of the market. Having kids later means we've never felt stressed about child care costs or 529 savings. The thing that sets us back the most is that we're helping out our in laws; whereas, many of our peers receive gifts from their parents, so we have outflows where they have inflows, but we're still doing fine. The key was saving a lot when we were young because now (well, not at the moment, but when the market recovers) we've got a big investment nut that is compounding, and that is where I see the divide getting bigger and bigger over time.

[Anonymous]

I am an earlier millennial. Definitely lots of truth to all this.

You can't be happy comparing yourself to others. There are so many factors, circumstances, choices, and good and bad luck.

Kids are expensive. Big difference between 0, 1, 2, and 3 kids.

When you start having kids is also a big choice.

Staying home is an expensive choice and whole different ballgame unless you have one huge salary.

Getting into real estate early and getting timing right with appreciation puts someone ahead.

Some started with big student loans Some didn't
Some get gifts, estates, trusts from family.

Some have extended family financial and other obligations.

Some have homes rhat cost tremendous repair bills.

Some hire out a lot and others don't.

Some jobs such as government have a defined benefit pension component.

Yes the divide gets big plus you don't know someone's balance sheet except outward lifestyle.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

The "Great Wealth Transfer" isn't even close to happening. The boomer parents are now inheriting their parent's wealth. The millennials won't see that money for 10 - 20 + years. Once that happens it will further exacerbate this divide.

I doubt you'll see this money. It will be given to expensive long term care facilities and sent to Indian scammers.

Nah. The smart boomers like my in-laws bought Cadillac LTC policies for peanuts. They are sitting on about 20mil and growing because they spend less than the income they make each year + social security. We are also big savers on top of what we get from them, and we only had two children so they too will see a large inheritance.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

The "Great Wealth Transfer" isn't even close to happening. The boomer parents are now inheriting their parent's wealth. The millennials won't see that money for 10 - 20 + years. Once that happens it will further exacerbate this divide.

I doubt you'll see this money. It will be given to expensive long term care facilities and sent to Indian scammers.

Nah. The smart boomers like my in-laws bought Cadillac LTC policies for peanuts. They are sitting on about 20mil and growing because they spend less than the income they make each year + social security. We are also big savers on top of what we get from them, and we only had two children so they too will see a large inheritance.

Have you had occasion to use it yet? My grandparents had those plans and the paperwork alone was awful. Every single little expense needed documentation, and it paid out less than anyone thought. You could fight denials or under-reimbursements, but it was so time consuming and annoying to do so that my parents gave up for a lot of it. It was a stingy, time sucking experience at a time when my parents really didn’t need more administrative burdens in their life.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

The "Great Wealth Transfer" isn't even close to happening. The boomer parents are now inheriting their parent's wealth. The millennials won't see that money for 10 - 20 + years. Once that happens it will further exacerbate this divide.

I doubt you'll see this money. It will be given to expensive long term care facilities and sent to Indian scammers.

Nah. The smart boomers like my in-laws bought Cadillac LTC policies for peanuts. They are sitting on about 20mil and growing because they spend less than the income they make each year + social security. We are also big savers on top of what we get from them, and we only had two children so they too will see a large inheritance.

Right - both my parents and my in-laws have meaningful assets and live well below their levels (Only taking 2-3% from their portfolio to live off). They both also have fantastic LTC plans and work with a full service independent advisor that will assist in the LTi claims process.

Obviously we have no idea where life will take us but hopefully they stay healthy! I'll take them living until 120 and spending down their assets any day of the week..

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

The "Great Wealth Transfer" isn't even close to happening. The boomer parents are now inheriting their parent's wealth. The millennials won't see that money for 10 - 20 + years. Once that happens it will further exacerbate this divide.

I doubt you'll see this money. It will be given to expensive long term care facilities and sent to Indian scammers.

Nah. The smart boomers like my in-laws bought Cadillac LTC policies for peanuts. They are sitting on about 20mil and growing because they spend less than the income they make each year + social security. We are also big savers on top of what we get from them, and we only had two children so they too will see a large inheritance.

Yup. My FIL passed away last year and my DH manages his mothers finances. Blonder are planners. She had LTC insurance, a whole life plan, and a handful of rental properties that are all paid off. Not to mention their retirement nest egg. Between him and his 2 other siblings they will each walk away with mid 7 figures when she passes. Now that my FIL passed away all she manages to spend each month is her SS and modest pension. All profits even from the rentals sit in an investment account that has been growing for decades.

[Anonymous]

Anonymous wrote:As long as you're happy and have a fulfilling career, so what?

LOL

[Anonymous]

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Anonymous wrote:I reject Ivy leaguers from jobs all day. My favorite hires are usually state school honors program kids. Bright, realistic, and hungry!

This is who our hiring panels favor as well. The Ivies are almost disadvantaged at our firm.

We are a 6B investment firm and we are the same way. Very little ivy leaguers. Too rigid and sometimes lack the social awareness our job entails.

Mmm-hmm.

Do you not agree? Many Ivy Leaguers are brilliant but they can be a bit too "bookish" and lack good interpersonal skills. Just because someone is brilliant doesn't mean they will do well in a specific role..takes more than brains sometimes.

Whenever I hear "many people from a background X lack good interpersonal skills", I know who is lacking. That's regardless of what X is.

How can you say this? Do you really think a genius MIT computer scientist would do well generating PE deals? Or selling medical devices? Or in Commercial RE? Just like the PE guy would be a total clown in computer science field? Your book smarts are far less valuable in MOST professional careers.

Do you know how many successful start ups came from MIT graduates? Who do you think did the pitching in the beginning?

There are plenty of people who are brilliant in STEM and can sell. But being book stupid (not knowing what you don't know) is a serious liability in most professional careers.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I reject Ivy leaguers from jobs all day. My favorite hires are usually state school honors program kids. Bright, realistic, and hungry!

This is who our hiring panels favor as well. The Ivies are almost disadvantaged at our firm.

We are a 6B investment firm and we are the same way. Very little ivy leaguers. Too rigid and sometimes lack the social awareness our job entails.

Mmm-hmm.

Do you not agree? Many Ivy Leaguers are brilliant but they can be a bit too "bookish" and lack good interpersonal skills. Just because someone is brilliant doesn't mean they will do well in a specific role..takes more than brains sometimes.

Whenever I hear "many people from a background X lack good interpersonal skills", I know who is lacking. That's regardless of what X is.

How can you say this? Do you really think a genius MIT computer scientist would do well generating PE deals? Or selling medical devices? Or in Commercial RE? Just like the PE guy would be a total clown in computer science field? Your book smarts are far less valuable in MOST professional careers.

Do you know how many successful start ups came from MIT graduates? Who do you think did the pitching in the beginning?

There are plenty of people who are brilliant in STEM and can sell. But being book stupid (not knowing what you don't know) is a serious liability in most professional careers.

It's a balance. Usually there is the brains and the "salesman" to generate funding.

I would 10/10 hire a University of Maryland grad with great grades, a balanced social life and someone I could sit down and have a beer with than some bookish MIT grad who can only talk about technical crap.

Yes, I own a decent sized business (35MM in revenue last year) and I most definitely did NOT go to an Ivy.

[Anonymous]

Anonymous wrote:As a 50-something, I’m finding the ultimate divide is when you start seeing people announcing retirements in their 50s. They go on to sit on boards or serve as trustees of institutions. Some of it may be requiring different levels of money to feel comfortable retiring, but being able to leave the corporate grind in your 50s is winning.

This. Even better when you're in your fourties.

THis is my goal and I'm in my mid twenties.

There is different between CHOOSING to work and HAVING to work hard.

[Anonymous]

Anonymous wrote:

Anonymous wrote:And yet DCUM denigrates the pre professional schools at Penn Georgetown Northeastern in favor of SLACs. It’s all daisies and unicorns to be so idealist in when you are young, until you are 35 and your peers are making 3-5x more than you do….. this is exactly why I told my DC to pursue CS or Business. Let someone else try to save the world, the trees and the whales. In the real world, living real life, with two kids and a mortgage, It’s about making money.

DC is filled with wealthy people who went to SLACs for undergrad.

It’s because I went to a SLAC that I can afford to send my kid to one.

[Anonymous]

Anonymous wrote:

Anonymous wrote:As a 50-something, I’m finding the ultimate divide is when you start seeing people announcing retirements in their 50s. They go on to sit on boards or serve as trustees of institutions. Some of it may be requiring different levels of money to feel comfortable retiring, but being able to leave the corporate grind in your 50s is winning.

This. Even better when you're in your fourties.

THis is my goal and I'm in my mid twenties.

There is different between CHOOSING to work and HAVING to work hard.

Can confirm. Just did this at 47.

[Anonymous]

Anonymous wrote:

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Anonymous wrote:Yes!! This is so spot on. I honestly didn't even understand what was happening, my husband and I reached 35 or so and suddenly felt so broke, which we had never felt in my life. We are in solid jobs (combined HHI $320) but our friends who were in law school, or went into tech, have just... Shot ahead of us while we weren't looking. I feel so blindsided and honestly, naive for how much I thought it didn't matter in our 20s.

We're both on the job market now trying to squeeze another $25k apiece. We'll never have Big Law salaries but honestly we've been a little lazy about maximizing our own potential.

How do you feel broke with an HHI of $320?? What are you needing that you can't afford?

Oh we're fine and we do all the responsible things - retirement, 529s for the kids, etc. It's totally a comparison /keeping up with the Joneses thing. It feels like suddenly my friends are buying $2m houses and taking several very luxury vacations a year with their kids, and I am just like... What on earth, I didn't even realize that was in the scope of what was possible. Mostly lawyers or big tech salaries. So HHI $320k is fantastic, but compared to my friend who makes twice that by herself, before you even consider her husband's salary... Yeah, the scale changed quickly.

This is us exactly. HHI about $330. Modest roof over our heads, two mid-level cars that are paid off, retirement and 529s basically on track, and we don’t have to scrimp to meet daily needs with a few little luxuries. But when we want to go on vacation we have to save up and budget, and our “stuff” (furniture, clothes) is really basic. To 99% of the world we are very wealthy. In the DMV I feel like a scrub.