I graduated from college in 1987, into a rip-roaring bull market, when the only requirements for employment were a heartbeat and a clean drug test. You had to be a complete moron not to get a job. None of my friends lived at home with their parents, even those who graduated with student loans.
Still, it’s tempting to downplay the role of luck in one’s life. I’ve written a couple of books about money, and what to do with it, and I’ve noticed this: My generation (older Gen X and younger boomers) likes to assume its experience is universal.
Parents, you look at your young adult children and think: Why can’t you just do what we did? Work hard. Save your money. Buy a house.
You don’t want to accept that your kid is struggling because of things beyond their control, and beyond your control. The fact is, housing costs have increased dramatically. Inflation has exploded. Interest rates surged. Industries are now being reshaped by artificial intelligence.
Young people, you lament: I have been dealt a terrible hand.
You have every right to feel bad for yourself—for about five minutes. Then you need to get off the pity pot and deal with it. You cannot control mortgage rates. You cannot control inflation. You missed the housing market in 2021 when interest rates were on the floor? That sucks. You took out loans to finance a degree that’s not paying off? That’s frustrating. Now what?
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Start by ignoring your parents’ financial advice. And moms and dads, if you’re still with me: Listen up. I’ve spent decades thinking about money—as a commodities trader, chief investment officer, certified financial planner, and CBS News business analyst. Over that time, the rules have changed dramatically. Your understanding of what your kids should do with their money may be out of date for the world and the economy we’re living in. Allow me to give you some examples.
“Buy a Home Once You Can Afford To.”
I’m close to a couple in their 30s, who live in New York City. They have a baby, earn roughly $400,000 a year between them, and have diligently saved hundreds of thousands of dollars.
They’re renting.
They can afford a down payment on a million-dollar home, but tying up $250,000 of their precious savings in a house feels like a risk to them.
Their parents don’t understand. “You’re throwing your money away,” they say. They are not.
Many of us are emotionally attached to the idea of homeownership and the sense of stability it evokes. But telling a 30-year-old in a high cost-of-living city to buy at all costs ignores today’s math. Just five years ago, the typical mortgage consumed about 30 percent of a median household’s income, which is just barely on the edge of affordability. Today it’s roughly 42 percent.
The idea that renting is “throwing money away” ignores the fact that mortgage interest, property taxes, insurance, and maintenance are all money you’ll never see again, too. Renting buys flexibility, liquidity, and freedom.
The American dream of homeownership wasn’t handed down from the heavens. It was largely a post–World War II creation aimed at white men returning from war, fueled by government subsidies via the GI Bill, inexpensive housing, and an economy that no longer exists. Clinging to a model built for 1945 makes little sense in 2026.
“Get a Professional Degree.”
A friend of mine has a son who was working as a consultant in his late 20s. He wasn’t at one of the most prestigious firms, but he liked his job and was making a good living.
At his parents’ urging, he took the Graduate Management Admission Test (GMAT), the entry ticket to MBA programs, and aced it. Suddenly, mom and dad saw the University of Chicago or Stanford in his future. With a business degree from one of the top schools, he could leave his middling firm, pivot to private equity, and turbocharge his career.
But he didn’t want to.
“What are you worried about? We’ll pay for it,” they offered.
He was progressing quickly at work, had just moved in with his girlfriend, was earning a good living, and couldn’t see the logic of stepping out of the workforce for two years to pursue a credential he wasn’t sure he needed.
For previous generations, an elite professional degree was a golden ticket. Today, its value is far less clear. Employers increasingly reward experience, judgment, and performance over another line on a résumé.
This young man’s parents were beside themselves. “Why are you squandering this opportunity?”
But just a year later, his career has flourished exactly where he was. He became a bigger fish in a smaller pond, earning more money and doing more interesting work. His parents thought the safer choice was another degree. He understood that, for him, the safer choice was staying put.
He was right.
“Pay off All Debt as Fast as Possible.”
A friend’s daughter called me one day. “My mother is up my ass because I want to put money into my retirement account.”
She was young, had a good job, and carried some student loans at a reasonable interest rate. She also had access to a company 401(k) plan with a generous employer match.
Her mother was adamant that every spare dollar had to go toward paying down debt before anything else. I get it. Many of us have a neurotic fear of owing money, often fueled by bad experiences where high interest debt stymied forward progress. Boomers, in particular, were raised by parents traumatized by the Great Depression, and taught to abhor all debt.
Not contributing to a retirement plan with a match is leaving free money on the table.
But not all debt deserves the same urgency. If you’re carrying a credit card balance at 22 percent interest, by all means, pay it off. Immediately. But a student loan at 5 percent or a car loan at 4 percent is a different proposition, especially if your employer is offering to match retirement contributions. Refusing that match in the name of “being responsible” is senseless. The reason is simple: Not contributing to a retirement plan with a match is leaving free money on the table.
I told her: At the very least, contribute enough to get the match. Get your money working for you. Start building the habit of investing. You can pay down debt and build wealth at the same time.
“Don’t ‘Waste’ Money on Fun”
This is the one that really drives me crazy.
You’ll hear all sorts of “experts” telling young people that their avocado toast habit is stupid and wasteful. Don’t eat out. Don’t go to concerts. Don’t spend on anything that doesn’t “compound.”
I find this bizarre. No one actually becomes wealthy—or stays wealthy—because they skipped enough iced lattes. What actually happens with this “don’t waste money on fun” mindset is that some wind up feeling deprived. The idea that younger generations are struggling because of discretionary spending is overblown. The real problems are the high cost of housing, soaring post-pandemic prices, and student loan burdens, all of which have grown faster than wages.
To be clear, I am not saying that you should be careless with your spending. But also don’t turn your life into a punishment because a centimillionaire on your Instagram feed thinks your sandwich is frivolous.
Post WW2, 90% of Americans were white and 87% of households were headed by men. So I'm not sure why the author felt the need to say homeownership policies were “aimed at white men.” They were aimed at Americans.
And FYI, I’m not interested in some CBS crossover on financial topics here at The Free Press.