A Message for Gen Z

“As Gen Z blows rent on Taylor Swift tickets, they say they feel ‘judged’ and blame schools for not teaching them how to budget.”

So reads a Fortune headline from this morning, with the ensuing article beginning like this:

It’s no secret that Gen Z likes to splash the cash. From caviar bumps in clubs, to lavish holidays and Taylor Swift tickets, the generation has been regularly called out for “doom spending” their earnings.

They are aware they’re being judged for it, new research confirms – but they don’t know what to do about it, blaming schools and colleges for setting them up to fail.

If, like me, you’re not Gen Z, you might have an automatic solution to that failure: Don’t spend money on stupid stuff you don’t need. Put it into savings or responsible investments instead.

I’ve worked very hard to teach these principles to my own children, some of whom are Zoomers. But perhaps that’s because of my humble beginnings and later misfortunes in life. Experience can be a tough but very efficient teacher.

So much so that it turns the student into a master.

And since Gen Z is looking for a teacher… and since I genuinely want to see my children, their friends, and their larger society succeed… let me lay out the path to success in black and white.

It doesn’t matter if they (or you) are starting out with debt. There’s still a way out of the financial chaos and onto a better life.

I’m living proof of that.

When Life Kicks You to the Curb…

My first job out of college was as a real estate broker, a position I made sure to excel at. By the time I was in my late 20s, I had made a partner at the firm, though even that wasn’t enough for me.

Before long, I was ready to establish my own business – with some help, that is. I co-owned a company called C&T Investments, which quickly built up a portfolio of shopping centers and net-lease properties.

We were growing at such a great clip that I was worth over $10 million on paper in my early 40s. And my partner, who had started off rich, had even more.

Just apparently not enough.

As I’ve explained in previous articles, he ended up buying into some side investments that turned out very badly. And instead of dealing with them responsibly, he dipped into our shared funds.

That caused our partnership to collapse in the early 2000s, leaving me stuck with the bill. There were still projects to finish on budget and on time…

Loans to pay back, including those I’d known nothing about…

And my family of seven to provide for.

In addition, I hadn’t been as wise about my spending as I should have been. I might not have been spending money on Taylor Swift tickets (she wasn’t on the scene), but definitely on lavish vacations and expensive gifts.

So, I didn’t have nearly as much as I could have – and should have – to help me deal with life’s unexpected twist.

My enormous list of obligations became utterly overwhelming until I decided to face it all as honestly as possible. I realized the only way to get past the misery was to confront it directly.

So, setting aside every excuse to do otherwise (of which there were plenty), that’s precisely what I did.

Make That Curb Work for You

I made a list of all my creditors, both personal and professional.

That’s how my journey to solvency began.

It was a daunting task. But I knew I wanted to dig myself out of the hole I’d found myself in. And there was no way to do that without first determining how deep the hole was.

As it turned out, it was enormous. Gen Z (and many millennials) with their thousands or even tens of thousands of dollars in credit card bills?

You’ve got nothing on where I was.

My next step was to start making calls about my IOUs and negotiate deals concerning them. I set out my budget and an actual schedule of what I could pay at what times.

Then I stuck with it.

That meant completely cutting off all unnecessary spending. I fully accepted that there wasn’t money to splurge.

There were necessities like food, shelter, and schooling. Everything else had to wait until I was out of debt.

I’m not going to lie: That was not an easy journey. Nor was it uninterrupted. As it turned out, life had another calamity for me in the form of the housing market collapse.

Just like that, I once again lost everything in 2008.

We don’t get to choose the curveballs life throws at us. We only get to choose how we deal with them.

In this case, I dealt by literally rewriting my career from a developer to an investment analyst. I did this knowing I couldn’t just pump out any kind of stock-market evaluations. They needed to be quality reviews.

In other words, I figured out what I had to offer… then I worked hard to offer it the best way I knew how.

It took me years to rebuild my wealth this way.

But I’m so much better off today for all the sacrifices, and not just financially. I get to help other people either avoid falling into the traps I once did or climb out of them into something so much better.

There’s really no place I’d rather be. And I hope for a similar story for Gen Z someday.

They just need to realize that they can – and probably should – say no to those Taylor Swift tickets. There are so much better experiences to be had down the road…

If you’re willing to work and save for them right now.

Regards,

Brad Thomas
Editor, Wide Moat Daily