I'm just a local business and finance nerd looking to help people get educated about small business, marketing, and personal finance! I write about anything and everything that I can tie into those themes. I'm also Central Florida's only Kilted Realtor, so I write about Real Estate too! Check out my About Me page to see the origins of Cash Flow Celt.
Conquering Your Financial Empire
Hey everyone, I’m a Millennial. Rather shocking I’m sure. It’s amazing a young fella like me can find time to write a blog in between stuffing myself with avocado toast and mochachinnos and working 24 hours a week. If you didn’t catch the reference, you’ve probably avoided reading the news in the last week. Click the link to catch up. A brief recap: Aussie developer Tim Gurner said that, in no short sum of words, the biggest obstacle Millennials face in wealth creation and home ownership is themselves.
Needless to say, I’m rather perturbed by Gurner’s assessment. I know personally, I’m not the preferred audience of his Millennial bashing. I am an educated, money-saving, hustler. Heck, I get mad when my kid only eats half of his $7 kid’s meal! I only want to pay $3.50! It’s not the words that upset me. It’s the perspective. Gurner is intentionally ignoring all of the data that says, even though he’s only a decade older than me, he entered a vastly different marketplace than I did – in terms of both home prices and opportunities.
Tim Gurner entered a world a true hustler. What he did with the opportunity his boss presented him at 18 years old is remarkable. For those not in the know, his then boss bought an investment home and said “Tim, if you renovate it, you can share the profits.” Tim did most of the work himself and netted himself $12,000 for his trouble. He took that and a $34,000 loan from his uncle and bought a failing gym. He fixed the gym up and sold it a year later for a healthy profit. From there he never looked back and started his real estate empire. An empire that has now surged his net worth northward of $450 million. I do not begrudge what he did.
What he failed to account for was some basic metrics. That per the CPI calculator his down payment on the gym is worth $66,000 today. My mom bought her house in 1999 for $99,000. Per this inflation calculator it should be worth $169,000. I’m a Realtor, if I listed today, I would list in the area of $210,000. Pretty easy to see that 46000/99000 is going to be way less than 66000/210000. Not to mention two other key points. The first, the median real household income was $57,790 in 2000 and in 2015 was $56,516 (a 2.2% DECREASE). The second, who has $34,000 ($49,000 in today’s dollars) to lend their 18-year-old nephew!
Man buns aside, there are some ridiculous trends that Millennials have perpetuated. Much of that has to do with social media. Facebook is a giant echo chamber of people eating avocados and drinking coffee. It almost feels right to do that! The desire to get social cred via likes and comments leads people to potentially overspend more than they might otherwise.
Gurner also made a very small commentary about the hustle he has observed in Millennials. Many of us just simply don’t want to work more than 40 hours a week. Frankly, I don’t want to work more than 40 hours, but I understand that 40 is average. If I want to be above average, I have to do above average things.
Personally, I don’t have credit card debt, I bought an affordable 10-year-old car, and I haven’t gone on vacation (on my own dime) in a decade. That’s not a judgment. But I know most of my friends can’t say the same. However, I don’t believe my friends are purposefully destroying their lives. Life happens, and sometimes a pragmatic day-to-day approach, like when buying a car, wins in the battle of the budget.
Back when Obama got hammered by John Boehner over the college issue, Boehner infamously mentioned that he had no loans because he paid out of pocket through summer money. For those keeping score at home Boehner graduated from Xavier in 1977 when total tuition for a private university averaged $5,033. In 2015, that same private college tuition averages $37,990. On top of this, Millennials are the most educated generation ever. They have burdening college debt (which, mind you, Gurner did not have at the time of his original venture), and aren’t being paid adequately to represent that education. I will note, I don’t believe, necessarily, that college is the key.
What Gurner also missed was that his remarks were incredibly classist. That is, he implied that simply because he succeeded means anyone can. He failed to note that most parents or family members aren’t going to give money to an 18-year-old. He also seemed to think that those who can’t afford a simple luxury every day, like avocado spread on their toast, shouldn’t indulge the luxury at all. I’m by no means rich, but I do love food. I love going to this amazing restaurant near me. For myself and Lady Celt, we’ve never left for less than an $80 tab. As George Orwell noted, “unemployment is an endless misery that has got to be constantly palliated.” Said plainly, just ‘cause I don’t have any money doesn’t mean I’m not going to dress up and play fancy from time to time.
I could have written 2500 words just on this topic. I decided to spare you all; you’re welcome. I had to get my words out into the interweb though. I was so incensed. Income stratification, by its nature, indicates that not all people are going to be rich. It’s also incredibly insensitive to believe that all people have the potential to be rich. It’s rather depressing to think about, but some people have to be poor. Some are going to be alright, and some minority will life in luxury. It’s just the nature of money. In order to be rich, SOMEONE has to be poor. The converse is true as well. Perhaps Gurner could take a minute to realize that.
At least he had one thing right – home ownership is a great foundation for wealth.
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