Recently, I went a couple of rounds (respectfully) with some readers on Facebook about my statement that I don’t think it’s productive for parents to tell their children that buying real estate is the “correct” path to wealth. I get that the real estate market sucks right now in lack of inventory, inflated prices, and that mortgage interest rates have adjusted upward. (My first mortgage was 11.85%. Either you can afford a mortgage, or you can’t. Rock bottom interest rates were never guaranteed. A decade of people got lucky, and that’s no longer the case. Get over it.)

Contrary to what many think and say, renting is not wasteful, and home ownership should be for people who want to nest in a home. The place you live is not an investment first. It’s where you create sanctuary. If it happens to work out that your sanctuary appreciates in value and you don’t suffer the opportunity cost when you can’t spend a month in another city working remotely, good for you.

If you have the cashflow for your mortgage, and you don’t mind taxes, yardwork, and the “accidental” $1,000 a month you drop at Home Depot because you love rebuilding your shed and replacing the gutters, good for you.

If it doesn’t bother you that the logistics of taking new employment in another geographic location may involve a lot of cost and aggravation to sell and buy, good for you.

But if you require or want flexibility, if you aren’t sure of what the next few years will bring, if you’d rather spend your money on travel and stuffing your retirement bucket (so you can dial it back later), you have a big fan in me.

All of the above is to say: Leave Millennials and Gen Z alone. They will build wealth. And because they are likely to live to 100, they will build wealth later than you did. They have the time horizon to make it happen. If your biological grandparent clock is ticking, that’s on you. Please accept my best wishes for it happening soon. Meanwhile, I have had clients who love relocating to different cities and working virtually from wherever they are because they can.

Millennials and Gen Z also need and want flexibility because they know something we learned late in life about the job market: employers are not loyal. Part of the challenge we experience by staying in the workforce at 50+ is that we’re frustrated that corporations don’t appear to care as much as we do. And we don’t understand why they don’t appreciate our efforts and conscientiousness when we do our jobs.

Young people don’t have those expectations. As a matter of fact, they expect corporations to behave poorly, and those expectations are largely met. So don’t tell them to give up the flexibility of moving to a different employer, because they don’t expect to remain in the same job for more than two years.

They don’t need to unload a house when their fickle employer decides that an entire division needs to relocate to one of four “hubs” or face “packaging” in a resource action. (I did not make that up. The employer is probably paring headcount to prepare for future acquisitions. It’s a heartless cycle, and you need to realize this and have a Forget You Fund and an Emergency Fund as backstops.)

The “kids” know that if they want a 20% raise, they need to update their resumes. They’re not mercenaries; but if employers aren’t loyal, why should they be?

Millennials and Gen Z know that they need one or more side-hustles. They understand that in addition to savings, they need income (preferably passive) that they can use to supplement their employment, which provides their benefits. They are prepared to do something on the side in the hopes that they can convert it to full-time employment later. They know it doesn’t have an expiration date, and they want it to last and to grow as long as possible.

They use crowdfunding and other democratization tools to access early-stage appreciating assets, REITs, art, and who-knows-what-else. They use fee-free trading platforms and sweep tools that you’ve never heard of to invest their spare change automatically.

These kids are Roth “natives.” When they save, they go Roth. If Gen Z puts away the max ($7,000) in an IRA for six years from ages 16 to 22, they will have $1.7 million at age 70. That’s a big win, even if they spend their 20s working to live and traveling the world.

While you may fear for them, they will actually learn from the best teachers, their grandparents; those children of the 60s who were sold global disillusionment wholesale and still managed to get it done by fighting.

Boomers are better than Gen Xers at embracing change. None of the infrastructure of Title IX was in place when they were coming of age. And they entered the workforce still wearing nylons and floppy bowties with Peter Pan collars. Everything was done the hard way because it simply hadn’t been done before. These folks will encourage their “grands” in a way that parents cannot, as has been done by so many “skip” generations before them. What’s more, they will know and learn from their grandparents well into their 30s, 40s and even 50s.

Millennials and Gen Z will create companies that engage in employee ownership and participate in retirement plans that provide income annuities for protection. No, traditional company-funded pensions aren’t coming back. But after the disappointment of the last 40 years that is the retirement plan via 401(k), they will use better tools to accomplish their savings. Look for a resurgence of ESOPs (led by private equity) and union-employer shared risk.

Millennials and Gen Z know they’re going to be living a long time. They will have multiple careers over six decades, not four. They will take breaks while they’re young to live their lives according to their values. They will move. They know that they will not be as wealthy as their parents were “at their age.” But they will get there. Because they have more time. And, as you know, time in the market fixes everything.

Leave them alone. The kids are alright. (And we can probably learn a few things from them.) #NotYoungNotDone #WeRescueOurselves #OnlyTooLateIfYouDontStartNow #TimeHorizon

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Copyright © Madrina Molly, LLC 2024. All rights reserved.

The information contained herein and shared by Madrina Molly™ constitutes financial education and not investment or financial advice

Sherry Finkel Murphy, CFP®, RICP®, ChFC®, is the Founder and CEO of Madrina Molly, LLC.

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