The people who are really getting screwed in this downturn (it's not who you think)

My editor emailed me with a request on Thursday:

“Can you do a piece on the Treasurer’s economic update to the nation?”

My answer?

Sure, and I can do it in one line:

“The Treasurer is throwing the kitchen sink at COVID like there’s no tomorrow.”

The rub, of course, is that for most voters there aren’t that too many more tomorrows left … especially those who read the newspaper!

So today I thought we’d talk about the people who are really getting screwed right now.

People like 17-year-old Louise, who sent me this question:

Hi Scott, I've been reading The Barefoot Investor as I am interested in kick-starting my financial freedom. However, I am only 17, and about to graduate, so I don't have a strong income. I am slowly working towards setting up the different bank accounts but I am having trouble with the advised percentages for each. Any advice on how to get ahead?

Yes, Louise is still a kid. She’s not old enough to vote, but she’s young enough to spend the rest of her working life paying off the multi-billion-dollar promises our politicians are making today.

Thankfully, the concept of shouldering an unfair amount of future government debt isn’t high on her priority list.

Louise is more focused on the here and now — and with good reason: her age group has been the worst hit in this crisis, with a staggering 44% of the jobs lost this year belonging to 15-to-24-year-olds.

Now, Louise, here’s the thing: our lives are shaped by our experiences, right?

My generation’s experience has been 29 years of non-stop economic growth, falling interest rates, and rising house prices.

Yours will be different. 

As you grow up and get the keys to the (err) Uber, you’ll be starting your working life at the bottom rung of the employment ladder, leaning up against the worst economic downturn in a century. 

Fact is, every generation must play the hand they’re dealt, and you just got a Joker (Donald Trump).

Contrast this to your parents and grandparents, who’ve enjoyed the greatest economic boom in history.

Lucky buggers, right?

Well, maybe. However, the irony is that this long boom has softened people up. It’s allowed them (well, many of them) to paper over their financial mistakes. And, as a result, many older Aussies have never had to learn much about managing their money.

You will, though.

You won’t have a choice.

Yet thankfully you’re two steps ahead of most people — you’re asking the right questions while you’re still a teenager. So don’t fret about the percentages; you’re already on the right track by setting up your savings buckets. What that tells me is that they’re going to fill up. It’s only a matter of time — and you’ve got plenty of that.

And if all this doom and gloom is getting you down, know this: the last generation that encountered genuinely tough times was that of your great-grandparents, who lived through the Depression. The tough times hardened them into one of the greatest generations in history.

Tread Your Own Path!