Time is a crucial ingredient for building wealth. But these economic times for millennials, those born between 1981 and 1996, have not been auspicious.
Culprits included the 2018 Great Recession, which took off just as many were graduating from college or in the early days of their careers. Add to that the huge student-loan debt load that so many millennials carry, the result of college costs increasing 63% between 2006 and 2016.
Top it off with the pandemic-era layoffs and pay cuts, as well as inflation and child-care costs, and you have a group that may not ever make as much as their boomer parents.
Deniesha L. Scott, a millennial herself, has heard her share of money woes from her friends and family. But their complaints encouraged the Temple University finance grad to launch a coaching firm, especially designed for the not-wealthy.
She offers fee-based coaching sessions, or potential clients can also order her e-book that walks you through the steps that lead to building wealth and not just paying bills. She has also provided workshops for local nonprofits including Beyond Literacy and Girls Inc. of Greater Philadelphia & Southern New Jersey.
It started in 2014, when Scott, sitting in her Leadership and Organization Class at Temple University’s Fox School of Business, had an epiphany — she would create her own business. Four years later, she had another aha moment. She should help people, especially people of color, become wealthy.
According to the Federal Reserve Bank of St. Louis, Black and Latinx millennials had a median wealth of $3,000 and $15,000, respectively, compared with white millennials, who had median wealth of $53,000.
“Being an African American young woman, I recognize how much harder it is for us to build wealth,” Scott said. After graduating from Temple she worked with Vanguard, and later J.P. Morgan, and saw how multimillionaires handled their money. The difference starts with the way they think about money.
“You can’t come from a scarcity mind-set” is Scott’s mantra. Scarcity forces people to focus on short-term survival strategies of juggling bills over long-term solutions that will build their assets and create generational wealth.
Scott started Money Elevation in 2019 when the oldest millennials were not yet 40. It was the same year the Pew Research Center released a study on millennials that showed despite a better education and bringing more racial and ethnic diversity to the culture, millennials were more likely to be living with their parents for longer time periods. According to the Millennial life: How young adulthood today compares with prior generations report, “The financial well-being of millennials is complicated. The individual earnings for young workers have remained mostly flat over the past 50 years.”
Scott insisted that bemoaning the issue won’t fix the problem. Instead she insisted that millennials who are trying to build wealth from scratch need to start where they are and take baby steps toward their goals.
What to do
—Reset your thinking
Scott counsels that wealth-building begins with your mind-set. “The old adages of money doesn’t grow on trees, money is the root of all evil, are from a scarcity mind-set.” So the first thing she does is try to reboot how clients think about money to remind them that money is not a limited resource.
—What is your “why”?
“Money can be an uncomfortable topic. I want to work with people who are ready for a consultation, have a sense of who they are and what their goals are and (what they are) working to accomplish,” Scott said.
—Do you have an “I got this” fund?
“I don’t like to call it an emergency fund, because it isn’t empowering." For an “I got this” fund, Scott urges clients to open a separate online savings account and put their savings on autopilot by having it automatically deducted every pay period.
—You can’t save your way to wealth
Interest rates on saving accounts are so low that Scott said it’s essential to learn how to invest. “Saving accounts are only paying percent pennies on the dollar.”
—What is your number?
Work backward from your end goal. “That means how much do you need to live when you retire,” said Scott. Use that number to help you determine if you’ll need to increase your income to bring in more money. “You can go for a promotion, go to a different industry (that pays better), or start a side hustle,” said Scott. “Do what you can with what you have to increase your income.”
