Pink unicorns. Humans who fly (without tech help). Bigfoot. Nessie. Can we add "low-stress retirement" to that burgeoning list of myths in our modern society?
How many times have you heard your grandparents mutter wistfully about a simpler time? Money was different—looser, cheaper, and easier to come by. Pensioners (old people living on 401k-like savings) had enough money to cover their nut, or living expenses. They typically fully-owned their homes. There was a culture 50 years ago which shunned plastic (credit cards), debt in general (car loans), and viewed a mortgage as a 30 year loving slog to be paid off.
Not so much any more.
We live and love credit. We embrace it, push it, herd it, like it's our fat-storing-phillic bodies needing a workout that pushes them to the edge. The goal is no longer a revolving base around paying off debts - it's about paying the minimum owed and continuing onward another month.
How'd we get here? Our social rhythms changed. As a nation in the '60s and '70s, we stayed married for better and clearly for much much worse. We were married earlier. Finished having kids earlier. And college was vastly cheaper so couples didn't have to plunder their nest egg while paying for Johnny's dorm bill, books, and tuition. IBM had an army they hired every year out of college to sell their wares in a white shirt and blue suit. Most other corporations in America had the same program so jobs for anyone who wasn't socially backward and who had reasonable tech skills (like knowing how to type) were...plentiful.
The world changed vastly as technology's leverage assisted in dividing the country further into haves and have nots—those who mastered The Force (the ability to build, buy, sell, install or otherwise master technology) inherited the world. And then replaced themselves with that technology.
Imagine what was called a secretary pool—a big room the size of a swimming pool which housed armies of women who typed fast—the Xerox machine hadn't been invented yet Copy, rinse, repeat. So when a CEO needed 40 copies of a memo to the board, 20 secretaries typed a primary and a carbon copy. And then tech replaced all of them.
Same deal for executives with white collars. How many internet ad sales people do you think the world will have in 10 years? And that's pretty much it. From an industry employing hundreds of thousands to one employing tens.
So what happened to retirees in all of this? They were for the most part, left behind. A typical 70 year old today doesn't know the difference between Java and Pascal, nor how to run a batch email system or how to even spell HubSpot. They likely clung to the last decade of their jobs, fully vesting into their pensions - only now to just survive on retirement savings that don't cover the costs of Big City living. So they think about Iowa every now and then. Only they don't know anyone from Iowa. Zillow says life is cheap there, though, so...maybe.
And these retirees have it relatively good - they'll die before they go broke. Or at least most of them will - they grew up in an era when everyone smoked. It's the 50somethings today who have a different perspective. Johnny just couldn't handle a STEM career so he majored in Sociology. He really wanted that lovely private school with the giant elm. His undergrad degree had a sticker price of $150k, of which $70k was...covered, one way or another.
Only now, Johnny has $80k in debt and payments are about a grand a month. Even with a Sociology degree he's likely working for Uber (and not like coding the Java back end database system for their billing infrastructure and GPS tracking grid). He's picking up kids from the prom. And delivering ice cream on the side. And getting older.
He's not able to afford his own apartment and moves back to his old room. Over-loving mom is actually secretly happy about this. She welcomes him. He knows his father is embarrassed that at 25, this is his life. But by living at home, he doesn't have to go bankrupt and can honestly, decently pay off his debts.
His folks covered $50k of his school; his grandparents $10k; and $10k came from scholarships—love you, Rotary Club. Only problem? Johnny has 3 siblings. So his folks, prodded by awesome-sounding and gorgeous TV commercials trumpeting the beauty of second mortgages did not pay off their house.
Roll the clock forward 15 years and the house is mortgaged...a lot. The job market has turned sour and his folks (along with everyone else in their generation) didn't realize that this nation isn't a Republic inside of a Democracy any more. It's a Technocracy. One with rules they cannot fathom and a speed and unforgiving viciousness that is Darwinian.
The Wall Street Journal runs stories like these, seemingly every week, proffering no solutions.
And sadly, neither do we. Maybe Johnny shouldn't have been allowed to go to that expensive private school if he was going to major in Sociology (an indefatigably low-paying career tract on its own, especially with only an undergrad degree). At the public university, the tweed would have been gnarled but he'd have had $20k in debt instead of $80k and that might have made all the difference.
At some point, an army of Johnnys will turn their pockets inside out and there will be mass bankruptcy of late 20 and early 30 somethings across the country. And we as a nation will have to figure out how carefully we inspect the contracts they sign...because on most of them, when the students "won" their loans, there was a co-signer. And those co-signers don't have a whole lot of equity left to fork over when Johnny finally gives up.
Remember that swimming pool scene from The Graduate? Forget the whispered "plastics". Replace it with "Java" and not the kind poured by most Sociology majors who work for Starbucks.