Pt. 2: Millennials, Money, & the Bizarre American Fever Dream: the Role of "Personal Finance Education" & Our Collective "Expectation Hangover"

Katie: Welcome back to The Money with Katie Show, #RichGirls and Boys, and not just any episode of the show, but part two of a two-part special I'm calling “Millennials, Money, and the Bizarre American Fever Dream.” Last week, we talked about why I wanted to explore these concepts after observing and pondering them for the last two years, within the broader context of being a personal finance content creator; signs of cracks in the American dream façade for millennials; the education systems that built us from the ground up as especially hyper-competitive children, despite being widely misnomered as the “participation trophy generation;” and how the public and private sectors have found a way to profit off of us at every turn, under the guise of helping us. It was…a lot. 

We also heard from Malcolm Harris, the author of the book Kids These Days: The Making of Millennials, that's widely cited throughout these pieces. And if you haven't listened to part one yet, I would suggest going back and listening to that first, but you don't have to in order to understand part two. And to make sure that we are weaving in individual solutions wherever possible, we did close out last week with the reminder that our generation's unique wealth-building edge comes from our near-complete lack of a barrier to investing in the stock market. We may not be able to afford homes in our neighborhoods of choice, but we can begin investing in the stock market in minutes for free. That would've been unthinkable to our parents at our age.

So without further ado, this is part two. And today we will cover where personal finance advice comes into play, privilege as a somewhat uniquely American concept, the promise of the American dream, and the foundationally millennial concept of scamming. You will also hear from Gaby Dunn of Bad with Money fame. They will touch on some of these same ideas from their perspective, particularly the irony of the role of “girlboss capitalism” as a solution. Yeah, so let's get into it. 

So what role does personal finance advice play in this complex web? And I think this was really the heart of this episode, the spirit of it, and why I wanted to make it, because sometimes personal finance advice feels like tossing a life raft woven together with Pull 'N’ Peel Twizzlers to people drowning in a perfect storm style thrashing. Sure, it's helpful, but is it helpful enough to overcome the difficulties that most modern young people are up against? Now, there is empirical data…I'll link the academic papers in the show notes…to support the idea that people who are financially literate and make an attempt to plan for retirement retire with two to three times as much wealth as those who don't. A life cycle simulation estimated that 30% to 40% of US retirement wealth inequality can be accounted for by differences in financial knowledge, which is just nuts. But still, it feels as though the truth is becoming more and more self-evident, particularly because those studies were done with a generation that is already retired, and millennials are obviously not there yet. 

The American dream is increasingly only possible for a chosen few. And I know that that probably just made some of you angry, but unlike the software and finance companies that have made a few millennials unimaginably wealthy, it doesn't seem to scale, as Harris points out in his book. Not everybody can win the game. It is rigged such that exceptionalism is the only way out, and by definition, not everybody can be exceptional. Now I feel an intense level of personal guilt stemming from some combination of privilege and survivorship bias. The privilege that I had, the parental support, a full scholarship to college, and the guilt that accompanies somehow escaping the typical unfortunate pay that's available to most of my peers in so-called regular jobs, because ironically, I have the most millennial job there is: content creator, a title I have a feeling we're all gonna laugh at in 20 years from now. But anyway, it feels like I don't deserve to shed light on this system for being unfair because the unfair system has worked out for me so far. And in my case, the irony of succeeding at the hyper-speed American millennial adolescence that Harris describes is that mine just so happened to be pockmarked by a dizzying array of bad choices. I was arrested for being blackout drunk in public when I was 17 years old. And I was in trouble frequently at school for partying or talking about partying on that new app, Facebook, and still somehow I escaped my own bad decisions, made it to adulthood, and reached the 1% of earners in my age range.

And though I did graduate from college with a net worth of $0, it would be too easy to shrug off all of the data and say, “Well, if I can do it, anyone can do it,” because it's just not true. The benefits available to me began accruing from a very young age, and much like returns in the stock market, they compounded. So it's a source of great cognitive dissonance when I recognize that, yes, the good decisions I made with money in adulthood, like opening investment accounts and living beneath my means and educating myself, taking action, that, yes, those did land me here, but so did a fair bit of luck and privilege. And simply knowing the definition of a Roth IRA probably is not enough to outpace wage stagnation and crushing student debt. 

All right. So we're gonna take a break here. And now that I'm thinking about it, it's been a while since we've used the bridge section of our theme song. So Nick, can we cue that up? [music starts] Why does it sound like that? 

Nick: Come on. It's been so long. You gotta blow the dust off. I thought everyone knew this. 

Katie: Oh, that makes sense. 

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Katie: Privilege is uniquely American, right? This word “privilege,” this concept, it's inescapable in America because it is so consequential to how and why your life turns out the way it does. That's not to say that some people don't overcome being distinctly disadvantaged, right? But the majority of those in vaunted positions in our society started life on third base. You think about people like Gates, Musk, Zuckerberg, all of them came from money. All of them came from supportive families and are, unsurprisingly, white men. Conversely, if you are poor for just one year, you stand a coin flip’s chance at escaping. A study at UC Davis found that the exit rate after one year in poverty is only 56%. And if you're poor for seven or more years, your chances of escape drop to 13%. I have a blog post about this—I’ll link it in the show notes—but of course, right, there are plenty of people who also came from money and supportive families who didn't achieve what those three people have. And I don't intend to vilify people who have achieved outstanding things, or dilute or attribute their success to just having basic resources and support as a child. But it is hard to deny that while not all white men with resources become rich, most rich people are white men with resources, having access to basic goods like quality childcare, healthcare and education, food, shelter. That enables somebody to ascend Maslow's hierarchy of needs long enough for their hard work to begin accruing into something impressive. 

The author of the book The Nordic Theory of Everything notes in an interview titled, hilariously, “Capitalism is working better in Finland” with Pitchfork Economics, that privilege is more or less absent from the cultural rhetoric in her home country of Finland, because every citizen is guaranteed a certain base level of social safety nets by the state. You get higher education, you get healthcare, you get childcare, you get paid family leave. The floor is much lower. And as a result, this concept of privilege is far less prevalent in conversations about success and achievement there. 

But access to all four of these things is considered a huge privilege in the US: health insurance, paid time off, higher education? These things are game-changing for quality of life. And in the US, they are fully dependent on ending up employed by the right corporation. And the spoils are not divided evenly. So for example, as of 2020, roughly 75% of white Americans had private health insurance, compared to only 50% of Hispanic Americans and roughly 55% of Black Americans. But we have discussed these things before at length. Hell, I even made a podcast episode about my theory that this small faction of young Americans who are obsessed with financial independence is born from a fundamental unmet need for security and safety in the US. Cue Adele: “Hello, it's me.” So is it a broken promise or a fundamentally flawed promise, or maybe most terrifyingly, was it never a promise in the first place? Maybe it feels like millennials are being screwed out of something that should have been theirs, that a promise of some kind has been broken. This idea that the spoils for working hard and following the standard path is guaranteed entry to the American middle class, a birthright even, is ahistorical. 

As Jacqui Shine from the LA Book Review writes, she says, “It's a shared American delusion, but a dream is not an entitlement. The American middle class to which we were supposed to aspire was vanishingly short-lived. And it was certainly never uniformly accessible. Maybe we are experiencing a collective expectation hangover. We grew up being told that following this path: school, debt, more school, more debt, would deliver us on the doorstep of our affordably priced white picket fence house that we could buy with our job money and nothing else. And for a small few of us, us, it played out that way. And for many more of us, not so much. So how did we get here? And perhaps more importantly, why does America as a whole keep this idea of the American dream alive?”

Her words really have stuck with me—this, you know, idea of being vanishingly short-lived and never uniformly accessible, because the American dream is not only not birthright, it's incredibly aspirational. It pushes us—all of us, not just millennials—to work harder, strive more, and compete with one another for the seductive riches, or even at this point, I'd say the simple stability that it promises. And as someone who has somehow lucked into quite a few of those spoils, with relative job security, private healthcare, generous compensation, I can confirm it's great. 12 outta 10 would recommend. The whispers of the American dream beckon those born in other places to our shores, and many hope to build better lives for themselves than they could have attained in their home countries. Americans, both the natively born, and those who choose to become Americans by coming here, are nothing if not industrious, but Shine suggests this idea that it's widely attainable or even the same level of attainable to all people is and has always been a lie. She says it has very little to do with millennials per se, and everything to do with a set of historical and economic forces that lurched into operation long before 1980. The game was rigged from the start and the prize was never real. The deceptive rhetoric of the American dream fuels our exploitation and prompts a third question: Why are we so surprised we got scammed? 

Feeling generally scammed is how it seems a lot of millennials would describe their situations, which brings me to my next point: Scam or be scammed. In her debut book, Trick Mirror: Reflections on Self-Delusion, Jia Tolentino masterfully encapsulates the confusing millennial experience. In her essay, “The story of a generation in seven scams,” she weaves together the late capitalist explanation for why life as a young person in the 21st century feels so fraught in how we usually deal with it. She opens with Billy McFarland's Fyre Fest clusterfuck, which unfolds into an exploration of the 2008 global financial crisis and the simultaneous mounting student debt debacle, with stories of those like Anna Delvey and Elizabeth Holmes peppered in. The global financial crisis is a particularly poignant case study, since the fraudulent bankers responsible for torpedoing the American economy for the middle class didn't go to jail like their counterparts in places like Iceland. No, they instead received multimillion dollar bonuses and they quietly retired. Must be nice. Her conclusion is that millennials have implicitly learned that the only way to succeed today is to focus almost exclusively on yourself, at the expense of others. And yes, that's right, scam and exploit where necessary. I thought this review that I'll link in the show notes, by Miriam Francisco, did an excellent job of explaining why the situation is cyclical. This is a quote. She says, “In an economy like ours, trying to buy responsibly is nearly impossible. You buy something from Amazon because it's cheap and you're poor, or you're busy, or you have a disability, and you are directly contributing to a whole host of bad things that will soon befall another human being. Another person who is also poor or busy or disabled. This is America, where we're all screwing each other over in a million different ways.” 

This brings me to this idea of the ownership class and the middle class. After all the threads of the seductive middle class prosperity narrative have been slowly unraveling, captured in near-real time by a graph that I will link, that maps the cosmic gap between the rich and the poor and the increasingly nonexistent middle class in between. The income of the top 0.1% has grown by 382% since 1976, when adjusted for inflation, which is an average income of $7.5 million dollars per year. While the income of the bottom 50% has grown by just 32%, an average income of $19,800 per year. This means that for every American earning an annual multimillion dollar income, there are 50 Americans surviving on less than $20,000 per year. To crack the top 10% in this country, you have to earn more than $400,000 per year, but most of us exist in the shrinking middle class, the middle 40% of Americans earning an average of $92,000 per year. This is a quote from Malcolm's book. He says, “Every bit of this so-called progress has made employees both desperately productive and productively desperate, while the profits from their labor accrue to a shrinking ownership class. From this perspective, all that work in childhood seems motivated more by fear of a lousy future than by hope for dignity, security, and leisure time.” 

And it's true. In a lot of ways, we are becoming desperate. We are all looking for the home run, because a series of base hits does not feel like it's enough anymore. We would rather go broke trying to create an app, than work our way up in a corporate food chain with wages that have proven to be more or less stagnant since the seventies. Now this isn't to say that you need to be a top 1% earner to be happy with your life. And it's not even worth posing a question about fairness or equality, 'cause anyone who can read a graph can see that there's nothing fair or equal about the way things are continuing to shake out. And the funny thing is that most extremely wealthy people know it and readily admit it, as Bezos has admitted in the past, that those critical of billionaires who are using their wealth to go to space are mostly right in their criticism. And I'll link the article. Oddly enough, the defenders of the status quo, at least the ones that I encounter and those who deny that the current state of affairs is unsustainable or uniquely hurting the millennials who inherited said state of affairs, are often the ones found in the middle 40% group, those clinging to their positions in the middle class and aspiring to the unimaginable fortune of the 1%, embracing the American dream all the more desperately as their wages stagnate and health insurance costs rise. That if they can just work a little bit harder, they'll be ushered into the ownership class themselves. And hey, for some people it works, and for most everyone else, it doesn't. The American dream on profit-driven uppers is heading toward a cliff, and millennials may be the ones forced behind the wheel. Here's Harris again. “We didn't happen by accident. Over the past 40 years, we have witnessed an accelerated and historically unprecedented pace of change as capitalism emerged as the single dominant mode of organizing society. It's a system based on speed, and the speed is always increasing. Lately, the system has started to hyperventilate. It's desperate to find anything, but hasn't yet been re-engineered to maximize profit. And then it makes those changes as quickly as possible. The rate of change is visibly unsustainable. The profiteers call this process “disruption,” while commentators on the left generally call it neoliberalism or late capitalism. Millennials know it better as the world, or America, or everything.” 

It's time for another break. So can we pull up the track “MWK ad toss two final audio mix 4.0 underscore final draft final final dot MP3,” please? Don't worry, guys. I got it this time. 

Nick: Katie, listen to it. This one needs oil. 

Katie: Ah, yeah, that makes sense. 

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Now I would love to welcome our guest, the host of the very popular show, Bad with Money, Gaby Dunn. Gaby has written for The New York Times, The Boston Globe, Playboy, Vice, the Huffington Post, Cosmo, Salon, and Slate. And they've written several books. Most recently, Stimulus Wreck, a new ebook and audiobook available exclusively on Scribd, which we will link in the show notes. In short, they are prolific. Gaby is also a comedian and an LGBTQIA+ activist. Gaby, welcome to The Money with Katie Show. And thank you so much for being here today. 

Gaby Dunn: Oh, thank you for having me. Wow. My journalism bio, very impressive. Sometimes could go either way, but I was like, the journalism bio. 

Katie: I know. I'm like, well, let's set the stage with all of the impressive publications that you've been published in.

Gaby Dunn: Oh, thank you.Thanks. 

Katie: So to start, I wanted to mention a quote of yours about mega-rich money preachers that I found that I thought was really funny, because you said “While you scrounge, they are flying private.” As in, the personalities associated with being good with money are often just really wealthy, and it's pretty easy to be a good budgeter once you're a multimillionaire. And it's a little bit antithetical to that dogma that part of being good with money is being willing to scrimp and sacrifice. So as someone who went from having $32,000 in debt and describing themselves as being bad with money to a successful artist, creator, comedian, you name it, can you speak to that financial transformation and what it's taught you, having been on both sides of the experience, and of not having and of having the financial resources that you need?

Gaby Dunn: Yeah. I mean, I'm not flying private, but I've been waiting for somebody to let me do a full, deep dive on the prosperity gospel, which is where people believe that because someone is really wealthy, it means they're a good person and that they deserve it and they've earned it in some way. And that if they themselves can be a good, more moral, more smart, better person, then they too will achieve that money. That's kind of like the crux of a lot of self-help where the people are very wealthy, a lot of evangelical situations where the people are very wealthy. For me, the biggest thing is not thinking about it as much. Although I will say that there's this misnomer where people who are good with money, they think, oh, that means wealthy. And then those people are actually not budgeting, largely. When you're low income or, you know, like, exactly what your minimum wage job is going to pay you, you have to be like, does this cable bill make sense? Does it make sense to have this streaming service? Even more so, like even more tragic, like, can I get my meds this month? How many hours can my kid go to daycare? Like this kind of thing. And those people know down to the dollar what they have. If you're flying private, you probably are not budgeting. And I think that they're seen as good with money or they're seen as better or smarter than us. When in actuality, they're probably not paying as close attention as somebody who is on a fixed income is, so they're, they're, it's easy for them to tell us just scrimp and save, just cut coupons, et cetera, when they're not doing that. 

My car got sideswiped like a week ago. And I was crying about, like, what if I can't afford to pay for the repairs? My partner’s like, we can work it out between us, or…which I'm very lucky to have, but I still have the like panic mindset of like, I do not have this money. It's really weird how quickly it fluctuates, right? So like me having $50 in my account in, let's say, 2010, was very normal. So I was like, figuring out life around that versus like, now if it falls below $5,000, I'm like, what's going on? And then your brain still worries in the same way. And it happens so fast. And so that's why I can see some of these people, even if they say, well, I started out as a waitress or, well, I started out as a child of immigrants, I know how quickly you can lose perspective and it's very quickly. 

Katie: Mmm, oh, that's so powerful. I love that line of thinking around, being good with money equated to budgeting, and this idea that like actually the people who are the best with money, if being able to budget is our metric, is our benchmark, is someone who's low income. And I see that type of rhetoric, I guess, on Twitter all the time, where people will be like, Warren Buffett still lives in his same house and eats at McDonald's. And it's like, I resent the implication that we're drawing here. Warren Buffett is a billionaire because he still lives in the same house and eats at McDonald's? It's like, these things are not connected or correlated in any way. 

Gaby Dunn: Yeah. He figured out investing. 

Katie: He has a private jet. It's like, okay, he lives in the same house. He has a $100 million plane. Like it's a interesting kind of moral high ground that we assign to, you know, being ultra frugal, even when you wouldn't have to be, as if it's not the reality of people that are not choosing it, but have to live that way because of their…the income that they have to spend.

Gaby Dunn: Yeah. Look, if someone is white, cis, able bodied, I'll throw straight in there. If they are someone who comes from money, it's seen as frugal and smart to forgo things. Whereas if somebody is not those things, it's seen as irresponsible. “Why do you wear the same thing to work every day? Why don't you have this metric of…why doesn't your house have AC?” Whatever it is, these things that some people are praised for. And then other people are seen as, “Oh, that's a tragedy.” That's somebody who doesn't have. And so there's a difference between cutting cable because you want to, and somebody who's like, they're gonna turn my lights off.

Katie: Right. 

Gaby Dunn: Like for instance, I see a lot on Reddit, like people being, like, I'm meal prepped for like, you know, weeks. And I made this one soup or whatever. And it's like, amazing. That's so frugal. That's so cool. But like, if somebody goes to a food bank or if somebody is on Snap or whatever, they're irresponsible. 

Katie: Right. Something that's been really cool to witness in the last few years and I would say since the pandemic, especially, is the way that it feels like personal finance content is evolving to begin recognizing these types of systemic inequities and cultural differences. And even the economic shifts that have taken place since the great recession in 2008 that make a lot of traditional advice not so “one size fits all,” or maybe it's better to say that it's revealing that it's never been one size fits all. And I think that your work has played a role in that shift of making these conversations more nuanced and more inclusive. And I'm curious, what would you say to someone who doesn't yet believe that these types of differences are worth acknowledging as consequential, or that, “Oh, just stick to the math? Like, why would you even bring that up?” Why is it important that we call attention to them alongside the traditional advice? 

Gaby Dunn: Well, thank you for saying that. It's ahistorical, and we know that history repeats itself. And I think these people are not taking into account the histories in the US, if we're talking US-based. But because they're ugly, they're ugly histories, right? What did redlining do to the ability for people of other races to get mortgages? What has gentrification done, specifically I'm thinking in Los Angeles, to the Latino community? Disability benefits have not been updated since like the eighties. So people who are on disability…by the way, a minority group that anyone can join at any time…they are not able to access money in order to like actively save. And if they get married, their benefits are cut. There's like all of these things that are just plain as day. I understand the impulse to not pay attention to these things and to think that every situation is equal, and if it doesn't affect you, why would you pay attention to it? 

But if you knew the history, you would say, oh, certain people start off, you know, behind the eight ball. Like certain people are not in the place where they can just start budgeting. I mean, and there's also this thing where stuff keeps happening. So if something…it's true. Like…and people don't realize it, like if you’re in college and your mother passes away, that doesn't mean that your student loans will stop wanting payment or gathering interest. If your kid gets cancer, god forbid, or whatever, that doesn't mean that suddenly the government will be like, actually, we're gonna be lenient on your light bill. People give advice as if like one bad thing has happened, where they're like, oh yeah, so probably like you're dealing with, you know, maybe the unexpected death of a spouse or something. Okay, but what if that happens, and then your car is in a fender bender, and then you end up with medical bills. Like when you see people who are unhoused, multiple things have happened to them, right? Mental health crisis, eviction, death, unexpected illness. Most people don't have $4,000 saved for an emergency. People don't realize that they themselves are like…like I always say, like three things away from being in a place that they would judge someone else for being.

Katie: Oh my god, that's so powerful. It reminds me, there's this show that came out on HBO Max called We Own This City. And it's all about the Baltimore police brutality around the time of Freddie Gray. And there's a true story. The whole thing is a true story, but then there's this one individual one that really stuck with me that I think illustrates this idea of compounding, where somebody was arrested basically for no reason and robbed by the police in Baltimore—at the time, especially, it was like extremely prevalent and there was a lot of corruption. So he was arrested. He was in jail for three days. And in that time, he was not able to contact his employer, so that he lost his job. And then he came out of jail, tried to get his job back, but couldn't get his job back. You know, if you're living paycheck to paycheck and your most recent paycheck is gone, there's nothing. And then his car got repossessed 'cause he couldn't make the payment. And like, there you go. There's the domino effect: three things in a row. And in the story, it's just like this one snippet of one life. But it becomes very easy to see how one or two instances of things going wrong…as someone who grew up with quite a bit of privilege, talking about myself, from both family structure, social class, what I look like, who I love, et cetera. I was like, you know, for most of my life, oh, as long as you follow the traditional path and you work hard, things are easy and things work out for you. And it wasn't until I became an adult, got out of my small town in rural Kentucky, and started hearing about other people's experiences, that not only was my experience not typical, but that my hard work had a lot of tailwinds that were helping to push it in the right direction. So how do you think about helping change financial habits for someone if they are starting from a disadvantaged position? Or maybe they have a lot of financial trauma to overcome because of the way that they were raised or what they've been through? 

Gaby Dunn: I think, release the shame about how much it's gonna suck, to start. 

Katie: I like that. 

Gaby Dunn: The amount of panic…I started going through my bank statements. I had to put together all of my, okay, this is this loan. This is, this care credit card is from a dentist thing that had to happen years ago. Like I started gathering all the things that I needed and it took about three days to gather all of it. And I would say 25% of that was just sobbing. Like I was crying. I was like, I don't wanna do it anymore. I was fighting it. I was having a very bad time. So just like, let go of the idea that this is not gonna be a bad time, and just be like, this will be a bad time. One of the first things that I figured out was like the interest on my student loans. And I realized that one of them had a 14% interest rate and one of them had like a 3% interest rate. So I just started focusing more on the one with the higher interest rate. And that was like a small change. But I ended up being able to pay that one off first. But before that, I had never opened it. I didn't wanna know. I set it and forget it. 

It's gonna suck. But there's gonna be things that you find out that will actually be incredibly helpful to you. And that's like a very small one, but I think it saved me a lot of money in terms of interest, to just like be specific. It's not like people start fixing their stuff and are just like “La la la, this is great.” And you judge yourself. You go, why do I have this? Why did I take out this loan? Why did I do this? You can't go back in time and think about why, you just have to move forward. And I like ruminate, you know, like, okay, so what's the best decision? Like I got a chunk of money. Do I pay off my credit cards? Do I keep it liquid? Should it go in the stock market? What's gonna happen to the stock market? If you're just starting, you're on the internet, Googling “better to consolidate loan?” And you're finding different answers. You know, I would say one big tip that was helpful is talking to your friends and asking people. So instead of Googling “better to consolidate loan?,” I just started talking about it. So I was just like, in my podcast studio being like, ”I'm thinking about consolidating my loans,” and our producer at the time was like, “I just did that.” And I'm not like close friends with him. And I was like, “You did?” And it was just because on the off chance that I said, “I'm thinking of consolidating my loans.” If I had been too embarrassed to do that, maybe he wouldn't have said, “Oh, you know, I actually just did that. Do you have any questions?” 

Katie: I like this idea of releasing shame, too, because shame is one of those tricky emotions where if you are trying to address something that makes you feel shameful, it's almost that negative feedback loop where like you're now embarrassed and shameful that you feel ashamed. 

Gaby Dunn: Correct. 

Katie: You feel guilt about the way that you're feeling, which then makes it worse and kind of sinks you deeper into that hole. And I think it's very hard to think rationally and make forward progress when you're feeling that way. So I like focusing on that side of the emotion of like, it's gonna suck, and it's okay that it's gonna suck. And I feel shameful and I'm gonna try to release that, but I'm not gonna blame myself for feeling that way. 

Gaby Dunn: And it comes from the assumption that other people aren't going through this. 

Katie: That story about your producer highlights that perfectly. You don't realize that other people are in your same boat. So I guess switching gears a little bit, there was one thing that I wanted to get your thoughts on, 'cause I've been thinking about it a lot recently. And it's an episode that you did back in May about “girlboss capitalism.” And we'll link it in the show notes for anyone that wants to listen. The interview is fantastic. It's something that… 

Gaby Dunn: Thank you. 

Katie: Of course. It's something that I think is really fascinating, 'cause it's…the idea of girlboss capitalism, for anyone listening that's not familiar, it's the concept or narrative that you as an individual can navigate a system that may not be made for you, by individually—and I think your guest said, accumulating and descending. As in, if you build a business empire, you are overcoming misogyny for everyone. And that somehow becoming rich yourself defies the patriarchy, or that wealth acquisition is in itself feminist and progressive. And your guest in the episode made this point that this just supports these structures. It doesn't critique them or challenge them. And I'm really curious what your perspective is on this. 

Gaby Dunn: Yeah. So this is a journalist named Koa Beck, whose book is amazing. I actually have like a more funny episode coming out on the 15th on the same topic, where myself and Chelsea Devantez, who does Celebrity Book Club, reads Sophia Amoruso’s #Girlboss. Yeah. It's interesting. You know, a lot of my friends in the space, in the money media space, are women who feel this way, who are like, I'm here to make women rich. And it's not just white women. There's a lot of women of color in the space who feel that way as well. And I can't speak to them or take anything away from them. It's hard because Koa goes into talking about the suffragettes and the way that the suffragettes were very like white and cis and thin and able-bodied and straight. And they were like, we want the vote, but we also don't mind the patriarchy and we wanna be mothers and things like that. Whereas like the anarchists were more like, I don't want your vote because I hate the government. I see that repeating now, too, where there's financial literacy people who are like, you cannot be an ethical landlord, go fuck yourself. And then there's, you know, people who come on my show and are like, I wanna be a landlord who provides good, you know, housing for, let's say, specifically, LGBTQ people. And I'm like, okay, I see both sides. Like, I get it. So it's tough, because even I struggle with that, where like my partner and I are both trans-masculine people and there was one time we were flying first class. And we were like, we are most likely the only trans people in first class. But like, does that matter? And like, probably no, because I felt like shit the whole time, because people were walking past me…no joke, a woman and her son walked past and he says, “Mommy, I wanna sit up here.” And she says, “Well, if you work really hard, one day you can.” And I was like, I hate this. This feels terrible. And why do they make the people in economy walk past you? That's like such a metaphor. Instead of saying, how about everybody gets a nice seat? We go, let's aspire to this…to what? To leave everyone in economy? To say, bye Mom, you're in economy, I'm in first? And I think that's a metaphor for a lot of it. But like, as Koa said, like, then who's left behind? If you aspire to this, like who's left behind? That mom saying that to that little boy, when I wanted to like chase after him and be like, that's not true. Like the people up here have either like generational wealth or they… 

Katie: Points! 

Gaby Dunn: They lucked out or they have points or they have the literacy to have points or like, you know, they have a partner whose father was very nice. And I was flying for the very first time with my dog and was really anxious, and he offered to help. But like that's a privilege that someone could help me. 

Katie: Well, and that’s…what I'm thinking about right now, and kind of the challenge to reconcile these ideas, I think, is in a late capitalist society, money is power. And so to say that having money gives you power and choices and options and freedom is true. 

Gaby Dunn: It's true. 

Katie: And so I understand how we've gotten to the place that we've gotten to, where it's like, well, we just need to make sure that women have this. And then if they have the resources they need, but then how that morphs into this, like… 

Gaby Dunn: Then they start acting like the men. 

Katie: It's a stamp of approval from free market capitalism. Right? 'Cause it's like, oh, oh, the plan now is that everyone's gonna work really hard and make a lot of money. Great. The market approves. Like you can make merch around that idea, but it's not, it's not really… 

Gaby Dunn: Give UBI. Give reparations. The problem is you don't want to, because then all of a sudden there would be power in communities that you don't want power in. They need to maintain a lower class. The idea like, oh, if you just work hard enough, you can get to this place. Okay, well, what about all the people who are working hard enough and they don't get to that place? If you really wanna stimulate…and this is like controversial, I guess, but if you really wanna stimulate the economy, if you really wanna like give people the chance for like economic mobility, why not give them universal basic income? Why not give them universal healthcare? Why not give reparations, which we've talked about on my show. Like, I think it's something that could actually be done. There's something called baby bonds where you could like give disadvantaged children money and then it accrues and then they can get it when they're 18. Why don't you make universal wi-fi? Kids in school? Like, it's just like, there's so many things that you could do to actually give people a chance at economic mobility. Universal pre-K. Why not forgive all student loans? 'Cause a large number of people that have student loans are actually like Black families who have been trying to create economic mobility by sending their children to “better schools.” Hello? But you don't want, you don't want the American dream to be real. You want it to be aspirational. 

Katie: Well, 'cause an aspirational American dream makes you work harder, and sometimes erroneously, 'cause you think, oh, if I just work hard enough, I too can achieve this. 

Gaby Dunn: Individualism over collective.

Katie: Right. It's the exceptionalism.

Gaby Dunn: Exactly. 

Katie: And you can point to people that have done it and say, see, it's possible. But I think it's not scalable. It's not possible for everybody to be exceptional. Like the word “exceptional” itself implies that you're better than everyone else, and that you have risen above the average. And I think that's where I get frustrated with these ideas that like, oh, well, if you are working a minimum wage job, well, just go get a better job. 

Gaby Dunn: Exactly. 

Katie: Anyway, thank you so much, Gaby, for joining us today. I really appreciate it. 

Gaby Dunn: Thank you for having me. 

Katie: This is the first time I've ever done a deep dive like this, that synthesizes multiple books, years of observation, and other sources. So I appreciate you all being here and hopefully bringing an open mind to consider some of the ways in which the world really is different today for our generation, and will likely require us having a different set of skills, perspectives, and expectations than our parents did. If nothing else, it's my hope that any guilt or self-doubt you may feel because your life isn't exactly what you expected, based on doing all the right things…or maybe just that it's harder than you anticipated, will make you feel less alone. Moreover, you may come to the same conclusion that I have, which is that I need to throw out a lot of what I believed to be true about the way I'm supposed to live my life to be successful. And a lot of this is deeply internalized, like, get a secondary degree, stay at the same company for 30 years, buy a home as soon as possible, work with an expensive financial advisor. The scripts and the strategies that worked for previous generations look a little bit different against the backdrop of our current economic reality. And it may be time to invent some of our own rules. Like I said, one of my rules is that investing is non-negotiable and it's never been easier or more important than it is today. 

Welcome back to Rich Girl Roundup. As a reminder, we will take listener questions every month on Instagram. Follow @MoneywithKatie and then we'll pick one that feels interesting and widely applicable, and we will answer it. As my standard CYA language, I am not a licensed financial professional. This is not financial advice. This is just my attempt at giving you a framework for thinking through these types of problems or questions. This segment is brought to you by Betterment, giving you the tools, inspiration and support you need to become a better investor. Here is this week's question, from Nina. 

Nina: Hi Katie. This is Nina, calling into Rich Girl Nation from good old Kentucky. Go Pandas! Woo woo! I'm in medical school. And I often feel like I'm very behind because I make $0. So I'm wondering what that would look like for someone who starts making money later in life. How do we invest? How do we plan for early retirement? How do we set up our financial success? I'm really excited to hear your answer. And I'm really proud of everything that you've accomplished with Money with Katie so far. I've been there since day one, so go you, KG. 

Katie: This is a great question, Nina, and fun fact: Nina and I went to high school together, and she has been planning on being a doctor since we were 16. We used to study for physics together at Starbucks every day after school. So, good times. I am very thrilled to know that she's actually doing it. While I'm gonna run with a doctor example today, since that's specifically what you asked about, note that this same framework for modeling an outcome can be applied to anyone who's in school for a long time before making their salary: lawyers, vets, PhDs, you name it. So in order to answer this question, I wanted to tap my trusty Financial Independence Planner. For the uninitiated, this is a simple spreadsheet that I built that effectively takes a few inputs—your salary, your spending, your invested assets, and a couple other things—into account to determine how your financial independence timeline is impacted by your decisions. With respect to becoming a doctor, Nina, I figured it would be helpful to bake the assumptions that you're describing. The first is debt. So according to Forbes Advisor, the average student graduates from a public medical school with $194,000 in debt as of 2021. I will resist the urge to rag on every aspect of our untenable healthcare system right now. But yes, if you wanna be a doctor, prepare to take on six figures of debt in order to do so. The second thing she mentioned: late starters. It takes about 10 years to become a fully licensed doctor, and longer if you have a specialty. That's 10 years after you graduate from college, I believe; maybe that includes college. I don't know; fast math is not my forte. But assuming you went straight from undergrad to medical school and beyond, that means you may not be earning doctor money until you are 32 years old. So for all intents and purposes, we can pretend that we've got a 10-year delay beyond your average student, who goes straight into the workforce after attending college. Salary-wise, when you do become a fully licensed doctor, your income skyrockets pretty much overnight. According to the Medscape Physician Compensation Report’s 2020 analysis, the average primary care physician salary in the United States is $243,000, while the average specialist salary is $346,000. The median look to be over $300,000, though, depending on what type of doctor you are. So if you assume the person with $194,000 of debt is on a 10-year payoff plan and has a 5% interest rate, that puts their monthly payment around $2,100 a month for 10 years. Now that sounds like a ton, but remember, their income is anywhere from, according to this Medscape Physician Compensation Report, $230k to $511k per year, on average. If we shoot for the low end and assume they'll be getting $240,000 in their first few years as a fully licensed practitioner, that makes their take-home pay, after federal and FICA taxes, a little over $13,000 per month, making their loan payback account for about 16% of their take-home pay for the 10 years that they are paying it off, and then falling off entirely. 

Now in order to go any further, we do have to make some assumptions about their other costs, both inclusive of things like medical malpractice, insurance, and otherwise. But let's assume this person is single and paying the less forgiving single filing taxes. And let's say that they're spending $6,000 per month on their other expenses plus the $2,000 on their debt. So that's $8,000 going out per month. That still gives us about $5,000 left over after taxes per month to save, or about $60,000 per year. If we assume they begin at a salary of $240k and they get a 4% pay increase every year, that they increase their spending by 3% every year to account for the average inflation, and that they do pay off the debt in 10 years with that $2,100 a month amount, this individual, this doctor, is still set to reach financial independence after just 15 years of working, with a net worth of $3 million, putting them at work-optional status at age 47, if they officially began making doctor money at age 32. Obviously we assumed a lot of variables here, too many to count in order to flesh out this example, but using the averages, we were able to assess that a doctor really isn't actually far behind, thanks to their great incomes that kick in in their early thirties.

So like I said, if you are in a similar boat, where you're gonna be in school for a while, or you are delaying your earning years, you can kind of run through this same type of exercise to figure it out. I hope this helps. Fortunately so much of this can be calculated and projected. If you hit the ground running, you will still likely find yourself in a pretty great spot, though I'll leave up to you whether or not you wanna leave the workforce so soon after studying for 14 years to learn how to do your job. My guess is probably not. But hey, you could always plug away at that $3 million and then stop saving entirely at age 47, and then just live large on that doctor salary. And by age 65, your $3 million will have compounded to $10 million on its own if you assume an average return of 7%, which is not too shabby, right, Nina?

All right, y'all, that is all for this week. That's all for this two-parter. I will see you next week, same time, same place, on The Money with Katie Show. We will tackle something more tactical next week, I promise. Our show is a production of Morning Brew and is produced by Nick Torres and me. Sarah Singer is our VP of multimedia, and additional content editing comes our lovely senior editor, Henah Velez. The talented Christie Muldoon is our video producer, and Sam Cat is our VP of chaos, as always, while Jojo is our chief of woof.