Cynical thirty-somethings of the First World

Via Practically Efficient:

Those brochures got one thing right. Buried in them, somewhere in the mice type, was an eloquent out—one that might haunt our generation forever: “Past performance is not necessarily indicative of future results.”

This is an essay that I read a few months ago, that I have gone back to review several times. While Generation X is pretty well defined, post Gen-X folks have been difficult to bin, both qualitatively and quantitatively. This is probably due to a combination of the economic downturns of the market, the changes to basic economic variables (house values, investments, U.S. manufacturing base, etc.) and the now-ubiquity of information thanks to the Internet. Those of us in our thirties have lived through a lot of upheaval in these areas. We have not gone through the major depressions or the bloody wars of the past generations, but our lives have been affected through the subtle paradigm shifts in economics and information.

While Generation Y has grown up mostly online, and Generation Z only knows the world of the internet, I think the author makes a case that there is a missing generation between Generation X and Generation Y. The author calls this group Generation C, with C for Cynical, and I think this essay was heavily influenced by the Occupy Wall Street protests going on in late 2011. So maybe Cynical is s a strong word, and the author's call for C as Comeback at the end of the essay works better.

And, as a potential member of Generation C, I identify with several items in the writeup (but not all of them). But, what struck me the most was the discussion of the 401k returns. Entering into the workforce in the late 1990's, I was told to expect a 10% annual return on my 401k. This has not been the case. In fact many of the common financial advice of the time, as well as popular books such as Your Money or Your Life, which rely on high returns on the stock market or for treasury bills, break down in the current environment. Yes, compounding interest appears magical, but it is a lot more magical at a risk-free 6% than at a risk free 2.01% (today's 10-year treasury bill rate).

As we enter into the next phase of economic "recovery", with high inflation ($5 gas) and low returns (0-2% no risk via savings or treasury bills), we are going to have to discover and invent new ways to interact with the markets to secure a stable economic future. I think it is all part of the "value creation" and "collective invidivuality" points the author makes, and I am totally in favor of this approach, of comeback > cynical.