
American millennials think they will be rich - pseudolus
https://www.economist.com/graphic-detail/2019/04/22/american-millennials-think-they-will-be-rich
======
huffmsa
This is nothing new. Americans have always considered themselves temporarily
poor.

And while many don't become fantastically rich, there's still a huge amount of
turnover at the top levels of wealth between generations.

~~~
krona
Indeed, in the US 12% of the population will find themselves in the top 1% of
the income distribution for at least one year.

([https://www.nytimes.com/2014/04/20/opinion/sunday/from-
rags-...](https://www.nytimes.com/2014/04/20/opinion/sunday/from-rags-to-
riches-to-rags.html?smid=pl-share))

~~~
RickS
> 12% of the population will find themselves in the top 1% of the income
> distribution for at least one year

That is just wild. I wish they dove deeper into the data here. The top 1% of
earning, based on a quick google, is 1.3m/yr. That's a lot! Are there, say,
estate windfalls pushing people around to cause some of those blips?

Also, this article fails to separate income from wealth/assets, which seems to
be a common pitfall in this kind of conversation. Many of the people with the
most _wealth_ are not those with the most _income_. So while there appears to
be lots of income volatility, I would be interested in seeing the same thing
for wealth over time.

~~~
huffmsa
Wealth typically only lasts 2-3 generations. That might change as people have
fewer kids. Takes 2-5 generations to go from poverty to top 1%.

I would give citations but I've forgotten where I heard this.

~~~
munk-a
Your phrasing is a bit misleading, wealth is very fleeting, but the 2-5
generations to get into the top 1% is not "typical" by definition 1% of people
reside in the top 1% - if we were to assume that the cycle of boom and bust is
the lower bound in your example (two to fall out, two to get in) then one out
of every five generations a family should be in the 1%, yielding that 20% of
the population should currently be in the top 1% - using your upper bounds
it's a bit less silly but still mathematically unsound _and_ I would strongly
challenge that 2-3 generations number. Evidence that I've seen doesn't support
wealthy families falling out in 2-3 generations (except borderline wealthy
families) and the dynamics of money are changing, the estate tax has been
abolished and we simply don't have enough information past 1980 to see if that
claim will hold true... and what evidence we have (general information about
wealth inequality) is showing a strong trend to continue the concentration of
wealth.

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opportune
Having 1 million dollars at one point in your life (probably near retirement),
after 30-40 more years of inflation, is probably pretty realistic. That will
just be a regular lower middle class retirement, maybe not even enough to pass
on to your kids but enough to get by. 2% annual inflation compounded over 35
years means that 1 million in 2054 will be about equivalent to $500k now.
Which in most of the country is basically a paid off, middle income house and
a few hundred thousand more in savings.

~~~
rootusrootus
I think $1M would qualify much better than lower middle class retirement. I'd
bet a good chunk of the middle class is going to end up retiring on social
security.

~~~
opportune
I wouldn't really call that middle class then, but maybe

~~~
rootusrootus
Middle class is a very politically charged term, but the way I see it,
"median" ought to describe middle class fairly well. I don't know what
qualifies as official numbers, but what I've read recently is the median
American hits retirement age with a net worth less than $200K. Probably mostly
in their house. They probably spent their whole lives getting that thing paid
off so they may plausibly survive on what social security pays them, if
they're careful.

I suspect most of us on HN are a bit optimistic about the definition of middle
class. Maybe we identify socially as middle class. But unless the numbers are
lying, a huge chunk of America is in a much tighter financial situation.

~~~
opportune
Historically that's not what middle class meant (it usually referred to closer
to the top 10% who had to work for a living but were well off) but I agree. To
me living on $10-15k/year with enough money to sustainably supplement another
$10k/year seems pretty poor, but maybe I'm just too privileged to understand.
Close to half of all americans couldn't handle an unexpected $500 expense
which seems pretty poor to me too

~~~
rootusrootus
My understanding is that the common definition of middle class is in between
working class and upper class, but that in America the people who most
identify as middle class would be called working class anywhere else.
Personally I tend to view it more as a mindset than an income range.

------
theandrewbailey
> Then there is mum and dad: even if they don’t become millionaires,
> millennials will one day inherit from their parents, and that may help
> redress their relative poverty.

Boomers (in general) have as little saved and are in as much debt as their
kids. Mcmansions, healthcare, and luxury cars aren't cheap. I (gen Y) am not
counting on any Social Security or inheritance.

------
acconrad
The term "millionaire" is very dated.

It was first coined in the 1700s and first popularized in American culture as
early as the 30s, so really when people envision that "millionaire" from their
childhood or from their parents' minds they're really thinking of a
decamillionaire in today's dollars.

When you frame it like that, I'm not sure if any millennial thinks that will
happen.

------
alexandercrohde
Well, given compounding interest and inflation, is this so out of the
question?

At least I keep hearing I need a net worth > 1 million to retire. If one puts
away 10-15k a year for just 30 years, plus interest that would get you there
comfortably.

~~~
Glyptodon
Around 50% of the US working population earns $30,000 or less a year. Good
luck saving 10k or 15k a year at that income level.

Tangentially, at the typically suggested 4% yearly withdrawal level you'd need
more like $1.5 million to retire at the ~$60k median income level.

Also sort of unrelated I thinks it's interesting that about 50% of people can
earn under $30k, but median income is still twice that.

~~~
hoopleheaded
Median household income is nearly twice median individual income (approx 31k
vs approx 57k). Households frequently have two earners.

------
antt
I'm a millionaire, largely because I own a house. If this is the dream life we
have made a huge mistake somewhere.

------
CM30
Obviously the basic gist of this isn't a new thing, as said in other comments,
Americans (and likely many other country inhabitants) have considered
themselves temporarily poor/embarassed millionaires/whatever for
decades/centuries.

But part of me wonders whether social media and the internet may have pushed
the effect even further. Rich people are seriously overrepresented online, and
the rise in social media influencers may make people feel like that's the norm
for society nowadays, that everyone has the coolest tech, the most up to date
fashion, the fanciest house/apartment, a huge online following and a picture
perfect lifestyle. Hell, I even remember articles saying how many kids saw
Twitch streaming/creating YouTube videos being their most likely career
choice.

Just feels like social media and the internet makes you think that everyone is
raking in it and living a dream lifestyle, and that logically you should be
destined for the same thing.

------
RickJWagner
Crazy. Wealth is certainly within reach of most people, but it requires
discipline and a long, long-range saving plan.

I suppose many of those surveyed are watching the 'FIRE' folks. I think those
people are high-salary people (usually), also combined with very disciplined
savings and investment.

It just won't happen for wishers. Only for doers.

------
loblollyboy
I wish they had done something like 20-25 and 30-35 instead of 20-35 and
25-35.

Of course 20-25 year olds are going to pull the median down. They’re still in
college! But yeah 25-35 is still pretty low

~~~
kache_
I think you're vastly overestimating how much people go to college - probably
due to anecdotal experience.

------
mnm1
Of course they do. This has been part of the culture for generations. It's an
ongoing delusion that fuels the inequality and lack of social services and
keeps most people poor while the rich get richer. It's exactly this kind of
delusion that the rich spread to keep people from questioning and changing
what's currently going on. Americans are known for their stupidity and this is
definitely an example of that.

------
RickS
Paywall bypass: [https://outline.com/bLtYCK](https://outline.com/bLtYCK)

\-------

> MORE THAN half of American millennials, the generation of people born
> between 1981 and 1996, believe that they will one day be millionaires; one
> in five think they will get there by the age of 40.

This, to me, is absolutely insane.

Given that it's from a survey by Ameritrade, is it possible that the survey
strongly self selects for fiscally healthy people (proximity to ameritrade is
probably a strong signal here), and who understand that you can be a paper
millionaire with, say, one really good property and a modest retirement
account?

I somewhat hope so, because if this means "half the people who work at
chipotle expect to be millionaires" then that's admirably ambitious but a
little miscalibrated.

Hell, I've got a decent tech salary and my brother's running a healthy
lifestyle business. I wouldn't say with certainty that either of us are going
to become millionaires, despite being unusually well positioned to do so.

What happens when these people's dreams collide with reality? Are people
content to drift through life saying "any day now, things will turn around and
make me rich..."?

Nevermind that being a millionaire isn't that important. I'd take median
wealth and top decile meaning over median meaning and top decile wealth any
day.

~~~
randomacct3847
If you make the median tech salary of $300k and live on a fraction of that it
doesn’t take that long to save $1m...

Point is there’s no magic to becoming a millionaire if you have minimal
expenses and single.

~~~
RickS
> median tech salary of $300k

Mean is probably better than median here, right? Because salary isn't quite a
normal distribution. The high end is super high. 300k is normal for FAANG, but
that class of tech employee is in the top 10% of the wider tech salary pool,
at least.

Interesting that you call out being single. I've had the opposite experience –
the trick seems to be a salary like that and a spouse that is at least pulling
down a normal salary as well. If they're also making engineer money, then
you're super set. If I'd have been splitting rent and groceries for the past
10 years, my finances would look a lot better.

That's not an excuse, I could have gotten a roommate with the same effect.
Just to say that it seems being single raises expenses because you lose the
little collaborative economies of scale.

~~~
randomacct3847
I would put DINKs in the same group, yes (double income no kids). Kids are a
very big expense, even for high earners, and actually especially in pricey
areas like Silicon Valley because housing near good schools commands an even
higher premium than average for that area.

------
WalterBright
Even if the odds are against them, people like having the possibility of
getting rich.

The odds aren't even that bad, if you read up on how to do it, develop a plan,
and stick to it.

Why take that away from people?

~~~
MBCook
They tend to vote against their own interest because ‘one day’ they’ll have
more money and what they’re voting for will benefit them ‘then’.

~~~
WalterBright
I'm not so sure it's against their self interest. Crushing taxes on the
wealthy makes a country poor, and that hurts everyone via slow, stagnant
economies.

~~~
apacheCamel
Care to cite that second half? I know raising taxes to an extreme may cause
some issues but I thought we currently have some of the lowest taxes on the
richest people?

~~~
WalterBright
The US has maybe twice the average annual growth rate than Europe, if you
compare the S&P500 with EU stock indices.

~~~
apacheCamel
Sure, but can that be attributed to the lax taxing on the rich? Or are there a
slew of other things that could be causing this?

~~~
WalterBright
Let me put it another way. If people weren't allowed to accumulate large
amounts of wealth, would there still be SpaceX? Why is SpaceX in the US rather
than Europe?

~~~
ivalm
Europe is a very fragmented collection of independent countries with massive
bureaucracy, lack of intercompatability, and historic division.

~~~
WalterBright
Pick a country that has a better long term economy than the US.

~~~
ivalm
Pick a country that has similar geo-historical background... it's hard, US is
pretty unique. Closest would be something like Australia but they have too few
people.

~~~
WalterBright
Looks like neither of us know of any countries whose long term economics
outperform the US.

~~~
apacheCamel
I think what the user above you is trying to say is that there are many
factors that go into economic performance. Tax on the wealthy is not the only
factor and to say that is the reason for the economic advantage would be a bit
of a stretch. Every country is very different in almost too many ways to get a
real, true comparison.

------
3xblah
In the summarising the results of the TD Ameritrade survery, there is a "Q"
number in the bottom left of each results page, e.g., "Q300".

What does this represent?

------
sct202
I wouldn't be surprised, if a lot do. Just based on my friend group, a lot of
people/couples are doing really really well and could easily hit a million in
the next decade+ (and I suspect a few already have) if the stock market
doesn't implode.

------
amelius
Did they ask how millennials think to achieve this?

------
moosey
> MORE THAN half of American millennials, the generation of people born
> between 1981 and 1996, believe that they will one day be millionaires; one
> in five think they will get there by the age of 40.

I'm 40, I have a good job, and I will one day be a millionaire.

I will never be rich, or the possibility is so impossibly low as to be
laughable.

Both of these statements are true, and that is one of the fallacies that the
paper is making. It is very likely that a huge number of millenials will be
millionaires, given that our current economy is capable of running as-is for
another 40-50 years, simply due to pressures from inflation.

I don't think that our economy will run as-is for the next 40-50 years, of
course. We will do something about Climate Change, or it will do something
about us.

~~~
astrodust
The sad truth here is that "millionaire" doesn't mean a damned thing these
days. In many cities a crappy crack den looking house in a terrible
neighborhood costs more than a million dollars.

~~~
ivalm
Not really. Even in bay area there are plenty of places that are better than
crack dens for 1mil. But yes, a few places in the world are very expensive.

~~~
astrodust
By a very broad definition of "bay" and "area", as in completely excluding the
valley.

~~~
ivalm
Median home price in Daly city is $936k [https://www.zillow.com/daly-city-
ca/home-values/](https://www.zillow.com/daly-city-ca/home-values/)

Median home price in San Jose is $1054k [https://www.zillow.com/san-jose-
ca/home-values/](https://www.zillow.com/san-jose-ca/home-values/)

Median home price in San Bruno is $1089k [https://www.zillow.com/san-bruno-
ca/home-values/](https://www.zillow.com/san-bruno-ca/home-values/)

Yes, Menlo Park/Palo Alto/Mountain View are expensive but they don't fully
define Bay Area.

The cities I showed and more are definitely within Bay Area. And their median
house is not a "crack shack."

~~~
astrodust
What I mean by "crack shack" is unremarkable home or one in a severe state of
disrepair, where the land itself is worth a million dollars.

Those aren't too hard to find when the median home is a million dollars.

------
Lowkeyloki
I don't know why the article is picking out millennials (other than that it's
a popular tactic in the news media). You can replace the phrase "American
millennials" with "Americans" in the headline and it will hold true.

I'm reminded of something John Oliver said during a segment of Last Week
Tonight some years ago about the lottery. It seems that there are only two
classes of Americans. The rich and the soon-to-be rich. At least that's what
Americans seem to believe.

~~~
huffmsa
> _I don 't know why the article is picking out millennials (other than that
> it's a popular tactic in the news media)._

That's the only reason. The Economist is owned by aristocratic Boomers and
written by Gen Xers. They're just salty they were born too late to be the
Greatest and too early to go to Mars.

------
JohnTHaller
Narrator: They won't.

------
mars4rp
This is the reason why american people don't vote for more taxes on the rich,
illusion that someday they will be rich too.

working great for the people with money who created this illusion!

~~~
charliebossy
what an absurd thing to say

~~~
munk-a
What an absurd response! The chance that a random person on the street in
America is a billionaire is currently 0.00000212036%. It is absurd for anyone
to think they'll win that lottery chance (especially since the acquisition of
wealth is correlated highly with... already having wealth)

~~~
CryoLogic
The article is about millionaires not billionaires, in which case the odds are
actually around 3.5% (12m out of 327m pop) of US population.

~~~
munk-a
I mean, it's purely rationale to think you'll accumulate a million dollars of
assets at some point in your lifetime, but that isn't rich - a large portion
of your wealth will be locked into sustaining your living situation. Up here
in Vancouver almost everyone (including blue collar peeps) who purchased a
home in the 60s or 70s is a multimillionaire, but if they want to continue
residing in Vancouver that money is essentially unavailable to them.

I'll clarify a bit, being a millionaire in no way implies that you're rich,
inflation is a thing and the vast majority of millennials will be poor.

