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Some frank thoughts from a millennial

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  • Sat, Oct 19, 2019 - 12:57am

    #1
    CascadianAbroad

    CascadianAbroad

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    Some frank thoughts from a millennial

I want to give a brief self-intro before moving on to the larger issue I’d like to address:

I have been following the PP podcast off and on for a few years, but I only recently took the plunge to sign up for the website. I was preparing to graduate from college when the Crash hit in 08. I’d already figured out by then I didn’t want to work in the field in which I was about to receive a degree. I’d also come to realize the truth behind the “big lies” I had based my earlier life decisions on; the nature of debt and college loan debt in particular, as well as the other obfuscated systemic issues discussed at length here and other parts of the collapse, resilience, and permaculture communities. Thus I spent a few years deferring my loans as I focused on building up practical skills and knowledge in agriculture and the like. After a few years it became clear the market had hit the bottom, so I transitioned into a career field which has allowed me to have a fairly comfortable lifestyle and even save up money. I’ll be making the final payments to my loans in the coming months, and I’m finally in a position to think about personal finance instead of burying my head in the sand.

My story is not particularly unique. There are tens of thousands of us who were dealt a bad hand. The few people in my age cohort I know that are doing pretty well are the exceptions that prove the rule: my former classmates who were born into privilege and are now working in NYC or in real estate. I even know one person who came from a middle class, but money-smart family. The rest of us are rueful of the position we’ve been put in. Many, like myself, take work we might not have considered otherwise (although my work pays well enough, it is based on year-to-year contracts, and requires me to live abroad in often less-than-ideal locations). Others are are being drawn to the siren call of non-mainstream political ideologies which, despite their proven track record of human rights abuses and other issues, make promises to at least shake up the current state of affairs.

Here comes the brutal honesty: PP is currently not messaging in a way that gets across to most millennials. Most of us know that business-as-usual isn’t working, but very few have exposure or buy-in to any viable alternatives. Even those that know in their gut that Marxism isn’t the solution are still apt to get drawn in to movements or programs which don’t really “get it” like XR or the Green New Deal. Assuming they even have time or energy to do anything except veg out on Netflix or Call of Duty after their demanding, yet dead-end jobs. The reason I’ve tuned out on PP on more than one occasion is that it’s clear I’m not in the target demographic. I simply don’t have the financial wealth to be investing (yet!).

I don’t know how to bridge the gap, but I’d at least like to get the ball rolling on the topic. I try to broach the topic of systemic failure and catabolic collapse sometimes, to let people know that there are much bigger structural forces at work than just banking and climate. But there are still so many who would rather invest their attention in one form of escapism or another. I’m not really well-placed to do this at the moment, but in the future I want to plug in to some permaculture or Transition Town groups and promote the work they are doing.

 

So I’d like to discuss how we can reach out to those who don’t have any financial wealth to speak of. Tips for an early-30’s, collapse-aware person who has investing in several the “soft” 8 forms of capital but is starting from scratch on the finance side are also appreciated.

  • Sat, Oct 19, 2019 - 12:06pm

    #2
    ao

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    very good questions to ask at this time in your life Cascadian

One could spends hours and days discussing this issue but I’ll take a shot at it.

I have some questions about you if you don’t mind.

What was your education in?

What are you doing now as an occupation?

How much are you earning now and how much do you think you need to earn to be content?

What would you like to do if you had your choice?

What are some of your life goals and plans?  Occupation, life partner, family plans, things you’d like to do in your life, etc?  Also possibly state what your life goals and plans would be if you knew nothing about potential future collapse and other things discussed on this site?

What are some of your talents and skills?  What are you good at and what are you not so good at?

How many hours per week are you working now?  What are the maximum number of hours per week you think you can work over an extended period of let’s say 5 years?

Where would you like to live ideally?

What is your risk tolerance … low, medium, or high?

What is your energy level?  How much sleep do you need?

What is your state of physical and mental health and fitness?

This information can help get us started.  Otherwise we’re working in the dark.

  • Sat, Oct 19, 2019 - 06:42pm

    #3

    davefairtex

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    not the target demographic

Here comes the brutal honesty: PP is currently not messaging in a way that gets across to most millennials. Most of us know that business-as-usual isn’t working, but very few have exposure or buy-in to any viable alternatives. Even those that know in their gut that Marxism isn’t the solution are still apt to get drawn in to movements or programs which don’t really “get it” like XR or the Green New Deal. Assuming they even have time or energy to do anything except veg out on Netflix or Call of Duty after their demanding, yet dead-end jobs. The reason I’ve tuned out on PP on more than one occasion is that it’s clear I’m not in the target demographic. I simply don’t have the financial wealth to be investing (yet!).

Yeah.  How do I write a “gold and silver” market update that appeals to someone who has no money to buy gold and silver?  Its just a big, useless tease.

We aren’t talking about fixes to your problems because we aren’t living them.  Stacking gold (not possible), buying farmland or real assets (not possible), living in an intentional community (not possible).  That all requires/assumes savings.

But for sure congrats on the debt paydown.  That’s a big achievement.  Many never get there.

Getting to that debt free place sounds like it was the key step.  We don’t have a whole lot of specifics on how to do that here, nor do we have any discussion on whatever-it-was that you did.  I mean, you are working outside the country in less-than-ideal situations that nevertheless brought you to the promised land.  How did that one happen?

Perhaps you could post more specifics about how you did it using a different username and a VPN?  I’d certainly be interested in reading about it, and people in your cohort may well be seriously helped by hearing about your experience.

Also – what wisdom have you learned from your journey?  I know my grandmother was greatly affected by her depression experience.  I could see the imprint in everything she did.  And in my mom too.  There is no teacher like experience.

I guess what I’m saying is, you’ve done some really good stuff already, and if you could share it, that would be a benefit to those who have not managed to come as far as you on their journey.

In your copious free time, of course.  🙂

  • Sun, Oct 20, 2019 - 03:06pm

    #4

    AKGrannyWGrit

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    Cascadian

“I simply don’t have the financial wealth to be investing (yet!).“

I certainly understand to much month and not enough money. On the other hand not investing is a choice!  There is a saying “invest in yourself – First.  On average an ounce of silver is roughly say $17.50, maybe $20 with fees.  It doesn’t take very many beers, coffee, movies, fast food, dinner out or a gym membership to equal a few ounces of silver.  Consistent purchasing, even one a month can reap huge benefits.  Tell your folks no more gifts, just give you ounces of silver for Christmas and Birthdays.  Set a goal, all it takes is a decision.

AKGrannyWGrit

  • Mon, Oct 21, 2019 - 06:21pm

    #5
    NickAdams10

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    Some of the same thoughts here

@cascadianabroad,

I hear you. My wife and I graduated in 2008 with a sizeable amount of student loan debt. I lost two jobs due to downsizing, and my wife took over three years to find work in a field totally unrelated to her “practical” major. We’ve been lucky to find decent-paying work in the past four years, but there’s not a day that goes by without me thinking about what happens during the next downturn, especially if it is indeed worse that 2008. C’est la vie.

  • Wed, Oct 23, 2019 - 10:05am

    #6
    vlierheimer

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    Let’s keep this going, gang.

Cascadian, I have four late millennials and one “z” kid ( she’s 22) and am very interested in your thoughts here, in what you think might work. My late husband and I trained our kids in a low-consumption, high conservation lifestyle from early childhood, and they are now reaping the benefits of that.
Three out of four have graduated from college, debt free, and have found satisfying work in their fields. As this has unfolded, all of us are struck with how very unusual they are. This is just terrible. We’d all be interested in how to effectively message to millennials who haven’t had that kind of training. Thanks!

  • Wed, Oct 23, 2019 - 11:18am

    #7

    Matt Holbert

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    Parallel Paradigm

CascadianAbroad-

One thing to recognize is that much of what is discussed here and elsewhere only impacts the margins of our wasteful — and dead-end — ways of living. Having a job does not represent liberty, for example. We should all have right livelihoods — rather than UBI. Currently there is no infrastructure/system that provides a path to right livelihoods. We should also have a system that does not require us to store up monetary wealth. Storing something — with few exceptions — is inefficient. We have to worry about it being stolen, lost or taken by the medical industrial war complex.

We have to create a new paradigm that avoids all of the above. However, it will have to run parallel to the existing system since the only way to kick off the new paradigm is to tap into the resources of the existing consumption and stress-based system. In my mind, it should start with education. Our current education system is built completely around marketing. I was in my early 30’s before I realized that I was indoctrinated and started reading books that made me realize that my education had been a waste. (Most people never read another book once they graduate from college.) If a person starts with this awareness, the shape of a new paradigm comes into view. One that will not escape/avoid the upcoming collapse, but will be able to deal with it in a resilient way.

I’ve come a long way from a conventional life with a big footprint, but I’m seeking more dynamism and that is simply not available in the current paradigm…

Note: When I first submitted this my link behind “come a long way” did not appear. The link is: https://www.spokesman.com/stories/2019/oct/15/urban-bounty-north-spokane-couple-plants-produce-a/

  • Wed, Oct 23, 2019 - 11:34am

    #8
    Ejohnson

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    Similar story

So I was all set to graduate in 2009 with a degree in….

Construction management. Don’t worry, I’m laughing too.

Luckily, I took no student loans. My grandparents took out savings bonds when I was little (back when interest rates were above inflation), so that was 50% of a public university degree. The other 50% was my (middle class) parents savings, ROTC stipend, and working as a painter / furniture restorer.

I’ve since gone in to the military, and despite all the flaws, I love the people and my job.

I concur with cascadian on not having much to throw at investment, I have time on my side, but I’m more concerned with scraping together enough for at least a down payment on a piece of land capable of rain-fed agriculture for my wife and I to raise our kids on.

I’m just another data point, but it feels like most of the other millennials I see on here are more comfortable or farther along in the “soft” forms of capital, while the older members of PP seem more advanced in investing. That’s a broad generalization, but I think it’s useful.

Maybe millennial outreach looks like how to parlay soft capital into hard capital, and a focus on escaping debt? Great topic, looking forward to future discussion.

  • Wed, Oct 23, 2019 - 12:30pm

    #9
    DesertIndigo

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    Me too

I’ve been thinking along these same lines lately. I’m a bit older, graduated college on 2001 so I had a few years of working experience under my belt before 2008. We’re doing well enough, have the student loans paid off, have accumulated a small stash of precious metals and have a chunk of investments from various retirement accounts. However we’re still pretty far outside the target demographic here. Financial advice aimed at smaller investors would be helpful. I had a call with New Harbor – PP’s recommended financial advisor. I liked them a lot but their minimum amount of investment is 50k. We’re not there yet but I’m not comfortable putting substantial assets (for us) in one of the Target Funds that all retirement plans recommend. And I don’t have the time, expertise and stomach for investing on my own. So I’m not sure what to do there.

A lot of the advice here seems directed at people who have already made their money and are looking to preserve and grow it. It would be helpful to have more advice aimed at folks just getting started. What career choices will make sense in the next 20 years or so? Does participating in traditional retirement plans make sense, or would it be better to take those contributions and invest in resiliency or precious metals? Maybe us non-boomers should start our own thread somewhere?

  • Wed, Oct 23, 2019 - 02:33pm   (Reply to #9)

    #10

    Adam Taggart

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    My 2 cents

Financial advice aimed at smaller investors would be helpful. I had a call with New Harbor – PP’s recommended financial advisor. I liked them a lot but their minimum amount of investment is 50k. We’re not there yet but I’m not comfortable putting substantial assets (for us) in one of the Target Funds that all retirement plans recommend. And I don’t have the time, expertise and stomach for investing on my own. So I’m not sure what to do there.

….Does participating in traditional retirement plans make sense, or would it be better to take those contributions and invest in resiliency or precious metals? Maybe us non-boomers should start our own thread somewhere?

Desert Indigo –

It sounds like you’ve already covered the basics:

  • emergency cash stash ($500-$3k) for natural disasters
  • ‘rainy day’ savings fund (3+ months of income) in case of job loss/illness/etc
  • pay off non-productive debts (loans, credit cards, etc)
  • initial precious metals holdings as insurance against currency crisis

and are now working on building to an $amount that will offer diversification as well as upside/income potential.

Good for you. You’re already ahead of the vast majority of US households.

Now, there’s an old saying in investing: “the first million is the hardest“. That’s even more true for the first $100,000.

And it’s even harder for folks with a Peak Prosperity mindset, who are skeptical of today’s market overvaluations. Safe haven investments like precious metals and T-bills have vastly underperformed the S&P over the past decade.

But, to paraphrase John Hussman, it’s far better to grow slowly with safety than it is to grow fast but risk losing it all.

Which is why I prefer a slow-but-steady-wins-the-race approach for those focused on building their financial capital foundation.

I, myself, still follow that approach. Despite having a larger portfolio than you, I still approach investing very much as I did when I had a negative net worth after graduating business school, and wrestled to pay off my student loans:

  • Be ruthlessly frugal. Every dollar saved is one less you have to work for.
  • Invest for safety (at least, until the markets correct and valuation multiples return to historic norms). When building your savings foundation, don’t chase “growth” at the risk of losing a sizable chunk of your portfolio if the markets collapse. You’re working too hard to set yourself back like that.
  • Focus on your savings rate vs your portfolio rate of return. You have full control over how much money you put towards savings each month. You have zero control over what the markets may do. Instead of depending on asset price appreciation to hit your goal, focus instead on what % of your income you can save each month, and then challenge yourself to beat that % next month. And any appreciation that comes from your growing portfolio of (conservatively-invested) savings will be ‘icing on the cake’.

Even with a ‘low risk’ portfolio of cash/T-bills and very conservative stock & bond funds, it gets easier as you approach your goal. Not only do you get better at saving with practice, but as your portfolio grows, even a small rate of return begins to add noticeable wind to your back.

As to retirement funds, if your employer is giving an attractive match, I generally recommend funding it up to the matching limit. And if you qualify for a Roth IRA, I recommend doing so — the tax-free compounding and withdrawal is a deal that’s hard to beat.

[For those about to jump down my throat: yes, I share your concerns that retirement accounts may get ‘raided’ during extreme times. I think we’ll have enough warning beforehand (as things will need to get quite bad) to act if need be. But, given those concerns, I don’t recommend keeping 100% of your financial capital in retirement funds.]

All this said, I’d encourage you to also consider investing for income (click here to read all my reasons why).

Real estate in particular offers a great vehicle for this for younger people like you, who can take full advantage of the coming decades to have the income generated by the property pay off the mortgage.

If you’re willing to hustle, there are real estate investors out there willing to give you equity in their deal in exchange for services — like scouting potential properties, helping with admin tasks like permit filing, managing investor communications, etc. That’s a great way to learn about the RE investing business and get deal upside without having to commit any money.

TLDR: my general 2 cents is to keep on plugging away and playing it safe until you have enough discretionary funds to take greater risks with. Discipline and compounding will get you to your goals given enough time.

As always, this is not personal financial advice/talk to your financial advisor before taking action/etc/etc…

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