Ladies and Gentlemen, the Game Has Changed
There’s a feeling that traditional personal finance wisdom no longer cuts it.
So, are these feelings made up?
Has this generation “gone soft”?
Do we need to just “get offline, touch grass, and realize it’s all been in our head”?
I’m going to argue: No.
Making good financial decisions isn’t going out of style, but the data is clear: Succeeding financially has gotten harder for Generation Z.
Here are the 3 Main Contributors:
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1. Housing
Owning your first home before 30 was a standard, but it’s become a fantasy for the majority of young people.
Sparked by an insane amount of government subsidies, homeownership basically became a political mandate in the 1950s.
Over the years, it became an integral part of American culture - the literal American Dream.
“Get married, get out to the burbs, and plant roots” was the “proper” approach to living.
βThis chart shows just how far that ideal has fallen.
Why?
Let’s look at a chart in the exact opposite direction.
Home prices just keep going up.
There’s a million reasons for this but the big three:
- Financialization: In our system, houses are a shelter and an investment. Home prices going down even slightly would set off a crazy chain reaction of negative economic events.
- NIMBYism: Once someone buys a home, they make sure no more homes are built in that area. This keeps supply low. “I’m fine building more houses, but not in my backyard”
- Bigger Homes, Smaller Households: Home builders build bigger than they need because they know government mortgage subsidies will help buyers spend more than they can afford. The average owned home has 2.5 people in it. The average new-build house has 4 bedrooms. We need more starter homes.
Escaping the Housing Trap is a great (though sometimes dense) read on these reasons.
How expensive has it gotten?
Look at how much of your paycheck has gone to housing over the last 30 years..
That bottom right number says it all.
It’s a new game in 2025.
2. Debt
“You can’t get ahead starting this far behind”
I’ve written about Student Loans in the past, but as a reminder, our loan balances are higher than ever before and our starting salaries haven’t kept pace.
What’s so painful about this is students felt like they were doing the right thing.
Everyone and their mother said “go to college” and the government said “here’s as much money as you need to do it”.
Did we meaningfully weigh the benefits of college with the debt? Most would say “no”.
There was a system of well-meaning counselors, teachers, college recruiters, government programs, and parents that indirectly led to an education system that is broken and a whole bunch of students who start off on their back foot.
3. Wage Stagnation
I’ve written previously about the differences between Income and Wealth. The problem for young people is that, unless you inherit wealth, all you start out with is income.
It would be great news if incomes had meaningfully risen over time. The problem is, they haven’t.
Sure, your paycheck today is “bigger” than your parents when they started working, but throw in the fact that everything else is also bigger and you start to see the issue.
The Economic Policy Institute found that from 1979 to 2013, real hourly wages for the median worker rose just 6%.
βThe issue isn’t that the economy didn’t grow, it did.
It’s that the growth didn’t happen evenly.
From 1973 to 2023:
- The bottom 90% of earners saw wage growth of Inflation + 43.7%
- The top 5%? Got Inflation + 135.4%
- The top 0.1%? Inflation + 359.9%
“Chris, the tide lifted all boats - so what?”
βThe uneven distribution of that rise has consequences.
When those at the top have much more to spend, they can afford to outbid everyone else for homes, college, healthcare, even nice to haves like travel or eating out.
βThink about this: If things were really “too expensive”, companies would have to lower prices to keep customers.
But companies can raise prices to match what the big spenders pay. If your wages didn’t climb at the same price, you’re stuck watching your rent, tuition, and groceries climb faster than your paycheck.
Turning income into wealth has always been the way to make life easier over time, but that journey is harder when income itself hasn’t kept pace.
It's not all hopeless..
You can absolutely make good out of a tough spot - the other 40+ newsletters of mine teach you how to do just that π
But every once in a while it’s worth zooming out and acknowledging things are hard. The game has changed.
Keep joining in each week to make sure you're changing with it!
