Why Millennial Net Worth Dropped -34%

According to a recent study, the Net Worth of Americans Aged 18 to 35 has dropped by 34% since 1996. Here’s why. Add me on Instagram: GPStephan

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Within the article, we have two main takeaways:

First, on average, the cost of education – AKA COLLEGE – has risen 65% in the last 10 years.
And second… wage growth – on average – has only gone up about 26% in the last 10 years…

When we factor in inflation, we’re left with the NET cost of college going up a whopping 54% IN 10 YEARS.
And the NET increase in wage growth during that same time going up a whopping…you ready for this?…6.5%

The first thing we need to discuss, is college…and how ridiculously expensive it is.
The main issue, I think, is that we have a society that encourages getting a college degree as the “safe way” to be successful, and we have many of our parents pressuring us to get a college degree because that’s what worked FOR THEM.

Just look at the statistics though…in 1970, only 16% of people had a college degree or higher.
https://trends.collegeboard.org/education-pays/figures-tables/educational-attainment-over-time-1940-2009

Today, nearly 40% of millennials in the workforce have a bachelors degree:

Today’s young workers are more likely than ever to have a bachelor’s degree

This means that, back then, not only was college CONSIDERABLY less expensive than it is today, but it was FAR more exclusive. You have the the cost of college rising faster than my investments, combined with a nearly 300% increase in college graduates, combined with abysmal wage growth…all blended together with parental pressure to go into DEBT for a degree that no longer has the prestige it once did.

And this is where the issue begins…most millennial are starting out their career IN DEBT, with more interest accruing every day, with almost non existent wage growth…and I’m not surprised to see how their net worth has dropped 34% since 1996.

SECONDLY…we need to address the inefficiencies of making money.
From what I see, we’re slowly entering an era where jobs are much less applied for…instead, they’re created. With the prolificness of the internet, I’m seeing more and more people opt to start their own businesses rather than work for someone else.

And by following that, people are overlooking the obvious:
That starting your own business, or pursuing a trade, or honing a skill can have a MUCH HIGHER ROI than a 4 year college degree.

Now I understand this is a very one-sided argument…I know what people are going to say.

First, not everyone can be an entrepreneur.
I agree. If becoming an entrepreneur is not your thing, don’t do it. If you prefer something more practicable, a steady paycheck might be better choice. However, be VERY considerate about where you go to college and how much that costs. Perhaps consider 2 years of community college and then transfer to complete the last 2 years to save on cost.

OR…look into a trade school. There are PLENTY of trades that will ALWAYS be in demand that make a LOT of money.
Contractors, electricians, plumbers, welders…even just learning how to code could be an invaluable skill.

Second, I’m sure people will say there are benefits of college that aren’t just financial.
I’m not here to dismiss that. I’m sure there are plenty of social benefits, and just overall life experience benefits of going to school that can help considerably – but I also believe there are JUST as many, if not MORE benefits of not going, and being FORCED to put yourself out there and make things happen – otherwise nothing will happen.

At the end of the day, it’s really just about evaluating both the ROI of a college degree from the financial standpoint, and the realities that making making in 2019 is changing dramatically. When you can make more in a MONTH than a doctor makes in a year by selling wolf mugs on Facebook….then you know things are changing up quickly.

For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness@gmail.com