Personal finance for MERITs
Wealthy people call their brokers to help them make more money. Deeply indebted people call radio show hosts to help them stop losing money. But how many people really do either of those things? There’s a bigger story here, about a rising young middle class.
The algorithmic polarization of social media would have us believe that everyone in America resides at the financial extremes. The stories that get more attention are about people who are in hundreds of thousands of dollars of debt, or who have trust funds, or—most irresistibly—both. (The scandal!) We find these plotlines compelling not because most of us live like this, but because we do not. Other people are endlessly fascinating.
Money in the Middle
The middle class does still exist, and the young ones are in trouble. Millennials and Gen Z are the first generations of Americans that will not do as well as their parents. Stubborn inflation, high student debt, unaffordable housing and child care… it’s a lot at once.
Extensive news coverage of this personal finance maelstrom can be draining, but oddly comforting in its own way. No one wants to be a statistic, but at least you know you’re not alone. There are 55 million households in America ages 18-39 between the 30th and 80th net worth percentiles. Millions of people somewhere in the middle, living everyday lives, not going viral for anything extreme.
Coining a term: MERITs
Perhaps you’ve heard of DINKs, HENRYs, and ALICEs.* We at Brightfin have a new term for the young middle class: MERITs—Middle Earners, Rich in Time.
There are two possible interpretations of the second half of the phrase, and both apply. “Rich in time” highlights what young people have in spades: time. That means time in the market, time to change careers, time to learn from mistakes, time for all of the things. Warren Buffet is jealous.
The second implies a sort of verbal pause. “Rich… in time” suggests that they may be rich, later, but that’s not their focus right now. Much has been made of this generation’s interest in luxury goods and obsession with picturesque travel experiences. At the same time, they’re also questioning the notion and validity of being rich. When billionaires are coming under increasing scrutiny (and rightly so), more young people are choosing to redefine rich as something apart from extraordinary wealth. Something awaiting its own meaning.
Building for MERITs
We have a lot of work ahead of us on our start-up journey at Brightfin. Our focus is our motivation. We’re building a personal finance platform for the young middle class. For MERITs. Maybe for you?
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*DINK: Double Income, No Kids
HENRY: High Earners, Not Rich Yet
ALICE: Asset Limited, Income Constrained, Employed