If you invest long enough or even spend a decent amount of time online, you’re bound to come across a lot of articles about retirement.

Frankly, I find a lot of them not particularly productive. A lot of them try to shock you. They cite statistics about just how unprepared most Americans are for retirement. They give examples of investors who have unrealistic expectations for the kind of returns they will earn over the course of their lives, or they underestimate just how much they will actually need to retire.

Other articles will tell stories of folks who have retired at 40, telling misleading stories about how they got there. I find a lot of those pieces about as believable as some of those home makeover shows. You know what I’m talking about…

“Sam is a barista and Dianne is a part-time graphic designer and interpretive dancer. They are looking for a walk-up brownstone in downtown Chicago. Their budget is $950,000.”

Yeah, sure. Call me crazy, but I have the sneaking suspicion that all of that is designed to keep you discouraged. It’s like they want you thinking that you’re not going to make it. That you’re never going to secure your own financial independence.

Why We Don’t Believe In The Dream Anymore

And what really gets me riled up is that it’s working. A lot of people in my generation (under 45) have simply given up on the idea that we’ll ever have a realistic shot at it. I bet you probably know a few people your age who think this way, too.

And you know what, I don’t totally blame people for thinking that the game is rigged. That’s what a lot of the media wants them to think. Certain politicians want you to think that, too.

I don’t want to venture too much into politics, but I will say this… They have a point.

The average millennial will turn 35 in 2023. The average Baby Boomer turned 35 in 1989. At that point in time, Boomers owned 21% of the nation’s total wealth. Right now, Millennials own 3% of the nation’s total wealth.

You can see the rise of the Baby Boomer generation in this chart:

[Source: The Fed]

Below, I’ve shrank the time scale down so you can see what’s happened from 2005 through Q1 of 2020. You can clearly see the Millennial generation’s stagnation in this chart. They aren’t anywhere near the point where their Boomer counterparts were:

[Source: The Fed]

Will their time come? Sure, but it’s probably going to take a lot longer than it did for their parents (or grandparents). And while I don’t think they consciously know this, I think it’s one of the reasons you see a lot of younger folks out on the streets raising hell. I’m not excusing it, don’t get me wrong. But I think somewhere in the back of their heads they know that they haven’t participated in wealth accumulation at the same rate as previous generations.

And before you dismiss them as lazy, remember that this is the most educated generation in American history. A lot of them did what they were told, went to college, racked up a ton of debt, and found themselves behind the 8-ball. Many of them haven’t tasted the American Dream. And for some, it doesn’t even feel possible.

A lot of them believe that financial independence is for the rich, the entrepreneurs who “exploit” the labor of others, or for the very lucky.

I think that’s wrong, of course, but there it is…

Why That’s A Big Mistake

A colleague once showed me a study demonstrating that people were less likely to enroll in an employee retirement plan once they learned that their co-workers had been enrolled for years already. In a nutshell, people felt that they had already missed the boat — that it was too late.

I’m here to tell you that nothing could be further from the truth. And the most disappointing thing about all of this is that most of these folks don’t realize that they have the biggest intangible asset possible on their balance sheet: time.

And that doesn’t just apply to Millennials. Don’t believe me? Consider the story of Anne Scheiber…

Hardly anyone had ever heard of Anne Scheiber until the day she died. Raised in New York in the early 1900s, she worked as an IRS auditor, retiring in 1944 at the age of 51. According to the story, Scheiber didn’t start investing until after she retired (although that part of the story is in dispute). Nevertheless, Anne never earned a salary of more than $4,000 a year. She had an annual pension of $3,100.

Over the years, Anne invested in “buy-and-hold” securities and never touched them. This helped avoid paying taxes on her gains and let the magic of compounding do its thing. It’s worth noting, also, that Anne lived an extremely frugal and eccentric lifestyle.

By the time she died, Anne was 101 years young. And her portfolio was worth a staggering $22 million. (As the story goes, she was generating roughly $750,000 a year in dividends and interest alone.)

In the end, she left it all to charity, establishing scholarship programs to help young girls get an education.

Granted, this is an extreme example. And before you think to yourself “well, it’s different now,” let me ask you this… Do you think a single Jewish woman didn’t have it hard living through the Great Depression and two world wars?

What You Can Do About It

The point is, it doesn’t have to take that long or that much to build a portfolio of substantial value to reach your goals. Maybe your goal is a couple million – and you think you reasonably have 15 years to get there. For others, maybe it’s five million and 30 years.

I’m not here to empirically prove anything today. Instead, I want you to think about the Chinese proverb:

The best time to plant a tree was 20 years ago. The second best time is now.

What I’m trying to say is that it is still possible to achieve financial independence. But first, you have to ignore the noise. Stop looking around at what other people have. This is about your survival. Is it going to take some work? Sure. But since when was anything worth having easy?

The good news is that if you’re reading this, you’re probably already on the right path. Hopefully, this will serve as a pep talk for you to keep your head in the game.

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