Without question, the Great Recession hurt members of Generation X, probably more than any other generation. However, I expect many of us will become late bloomer millionaires as the stars align for us in our 40s and beyond. According to a recent article by NBC News, Gen-Xers born between 1966 and 1979 are in for "a world of hurt" when it come to their retirements. They lost half their net worth or about $33,000 on average, between 2007 and 2010. An article by Business Insider uses charts from the Pew Research Center to show what's gone wrong for Gen X. A 37-year-old today is much poorer than 37-year-olds in 1983, for example. While the cards seem stacked against us, I have a plan for becoming a late bloomer millionaire.
Getting our house in order
I'll reach millionaire status after I'm retired in part because I'll own my home outright. The Great Recession did me a favor by making it impossible for me to move. I'm glad I was underwater on my mortgage because I stayed put. Now I can own my home outright by the time I'm 55 at the latest. With a low mortgage rate of 2.75 percent, I'm not paying as much for my house as baby boomers paid for their homes in their 30s and 40s. My home will increase my net worth when I'm retired.
Telling the kids to forget student loans
While baby boomers took part in the mass hysteria when everyone thought a college degree was needed to compete no matter what the cost, I didn't play that game. I was willing to pay cash for college, but I refused to co-sign on student loans. My older son worked while he attended college classes. My younger son took worked on a practical degree that would result in a job after only one semester. I read an article published a few years ago that predicted Gen X would be the first generation that will tell their children to skip college. A recent Washington Post article points out only 27 percent of college graduates have a job related to their major. I won't have student loan debt or any other kind of debt haunting me into retirement.
Investing after the wipeout
Many of us experienced a 401(k) wipeout due to the Great Recession. However, Gen X is resilient. We also have time on our side. I haven't given up on my investments. Some of my stocks are back to even. Some stocks are worth less and others are worth more. I feel as though I learned from my investing mistakes during the recession. Now I can put money into reliable index and exchange-traded funds every month for the next 25 years. I expect my retirement accounts to reach $1 million. It may not happen when I first turn 67, but perhaps later in my retirement years.
During the Great Recession, I learned to live below my means. I'm comfortable with a modest lifestyle. Most likely, I won't have to touch the principal in my retirement accounts. I may be able to reinvest some of the dividends so that I will become a late bloomer millionaire in my 80s. Why do I aspire to be a millionaire at all when I'm not a materialist? I think it would be neat to be able to give my children, grandchildren and other descendents a step up so they have a better life than the one I had.
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