Helping Your Kids Weather the Storm

At a time of hyperinflation and home prices that are through the roof, it’s understandable why young adults just starting out might be feeling let down. Baird’s Mike Antonelli (“Bull and Baird”) and John Taft (“Finance for the Greater Good”) sat down to discuss how parents can help their kids through tough economic times.

John: Help me out, Mike – we’ve been telling our kids and grandkids for years, “If you want to be financially successful, go to college, get a job and buy a house. Brew coffee at home instead of hitting the local coffeeshop.” Is that advice still relevant today?

Mike: Good advice is good advice, regardless of who gives it. But I will say this: We need to be thoughtful about what younger generations are going through. Not only have they lived through some scary historical events, but they’ve also had doomsayers delivering bad news to their phones 24 hours a day for their entire lives. To say they’re disillusioned with repeating what previous generations did is an understatement.

Every generation wants the same things: To feel safe and secure, to be part of a community and to have their work valued. Advice to rising generations needs to center on how they can achieve those things while reminding them the world has always been a crazy place. They may have grown up with COVID, but other generations grew up with the Cuban Missile Crisis, the Vietnam War or 9/11. It’s the messaging that needs to change, not the advice. We also need to appreciate that younger generations get their content delivered in five-second snippets on TikTok – believe me, young adults aren’t champing at the bit to listen to a 30-minute talk on retirement investing.

John: Sometimes the old-school wisdom still applies – like “Compounding is the eighth wonder of the world.” Translation: Start saving early, automate your saving and don’t stop and start. The value of the S&P 500 today is 7× what it was 50 years ago, and it could grow in value by as much again over the next 50 years.

Mike: I think the best advice we can give young people synergizes what we know to be true with where they are in their lives. I’d want to tell a 21-year-old, “Save for your future, it’s important, but also enjoy this time because experiences, not account balances, make us who we are.”