Wednesday, January 15, 2020
The Average Millennial Spends $93,000 on Rent in Their 20's
This data from RentCafe.com/blog blew me away. The average Millennial pays a whopping $92,600 in total rent by the time they turn 30, more than what their Baby Boomer parents paid by the time they hit the same age. Not only do Millennials pay more in rent than previous generations, but their total median income is the highest among generations, earning about $206,600 in 8 years. However, they spend 45% of this income on rent between the ages of 22 and 30, which is much higher than the recommended ratio.
This is staggering, and money you will NEVER see again. It is a 0% return on investment--in fact, it is a negative return. Renting postpones financial freedom.
What should you do instead? Live RENT-FREE and start building equity by buying a home, renting rooms to your roommates you are living with anyways, have them pay your mortgage and rent, and sit back and watch as your equity grows, outpaces your salary, and you real the benefits of one of the smartest financial decisions. This is how so many people I know got out of the rat-race and exponentially increased their net worth without adding 3 part-time jobs.
Stop following the fear-based financial advice that MAY have some money waiting for you when you're 65 and you've sacrificed your 20s, 30s, and 40s "saving up," budgeting, and working 3 jobs. Retire in your 30s. Knowledge creates wealth. It's 2020. It's your turn.