“It’s Just So Much Tougher for Kids These Days”

“So, what’s it like in the real world? Well, the food is better, but beyond that, I don’t recommend it.” – Bill Watterson

Many of my friends believe that kids today have a more challenging life than we did when we were young.

“It’s more dangerous out there.”

“It’s harder to get into a good college.”

“Good jobs are harder to find and harder still to keep.”

“It’s just so much tougher for kids these days.”

That’s the view of Tamara Draut, who works for an agency that promotes government action and whose book, Strapped. is subtitled “Why America’s 20- and 30- Somethings Can’t Get Ahead.”

I read the book because I was curious. Her assertion didn’t seem true.

Draut argues that escalating college costs, high rents, and a tough job environment have forced our young people into an endless cycle of borrowing. The result? A generation that simply can’t make it in today’s economy. She supports her argument with anecdotes. And she concludes her book with a short chapter urging governmental reforms and running credit card companies off campuses.

I’m not an economist. I’m not qualified to do big-picture analysis. Nor do I think I am capable of saying anything especially new or interesting in terms of big-picture answers. But Ms. Draut’s proof wasn’t very convincing (at least to a skeptical reader) and her recommendations weren’t pragmatic. (Even if the government could ban companies from advertising credit cards on campus, for example, would that reduce their use?)

I’m a businessman. A businessman who’s also written a book for college graduates. It’s a guide to help them start building a career (and wealth) in a way that would pretty much guarantee success. I wrote it because my publisher, John Wiley & Sons, thought it would be a good sequel to Automatic Wealth – which was written for an older audience. In writing Automatic Wealth for Grads,  I gave myself this mandate: Say what you’d say to your nieces, nephews, and children.

I couldn’t tell them: “Write your congressman and ask him to support government initiatives that would make it easier for recent grads to get a solid start in life. Then wait 10 years, with your fingers crossed.” I had to talk about what they could do, as individuals, regardless of how tough times are.

The recommendations I made were based on a much smaller perspective. Not how to solve this “problem” on a national level, but how to get around it, over it, or past it… personally.

Are things really tougher for college grads today?

I’m doubtful. When I graduated from college, I was $7,000 in debt. So was my friend Eric. Peter wasn’t in debt, but he was about to be married so he had different financial concerns. Back then, unemployment was higher than it is now. Bad jobs were scarce. Good jobs were non-existent.

Peter, Eric, and I were doing everything we could to make a buck, but it was tough. I imagine our situation was similar to those who are documented in Strapped. (And $7,000 back then… in 1972… is the equivalent of about $25,000 or $30,000 today.)

We knew we couldn’t save our way out of our situation. We knew we had to earn more money. So we started a little business. An aboveground-pool installation business. We had no connections and no capital, but we had spent the previous summer building pools, so we did have some experience.

We went to a local pool distributor and offered to put up his display pools for free if he’d recommend us to his customers. He let us try one pool, and it took us eight hours – three times longer than it should have – to finish it. But it was built well and he gave us a recommendation.

One recommendation led to another. And before we knew it, we were working 16 hours a day, seven days a week, running four crews and making $300 apiece a day. We did that for 10 weeks straight. At the end of that summer, Eric and I had fully paid off our school loans, and Peter was able to put a down payment on a starter home for himself and his new bride.

I was able to not just get rid of my college debt, but buy myself a car and pay to have my parents’ house repainted.

That gave me a taste for entrepreneurship that I’ve never tired of.

I continued to start and run service businesses for the next several years. And then (after a stint in the Peace Corps) I got a job. As an employee, I learned even more about how businesses work, as well as how to succeed in the corporate world.

I tried to put everything I know about starting out and becoming successful – as an entrepreneur and as an employee – in Automatic Wealth for Grads…and Anyone Else Just Starting Out. If you get the book (and I hope you will), you’ll see that I put a heavy emphasis on what has worked for me:

• Don’t fret about your problems. And don’t wait for the government to solve them. Create a personal plan for success and follow it.
• If you can get a great job (and it’s not impossible), then get to work earlier than everybody else and work harder and longer than everybody else, and do everything you can to work smarter than everybody else.
• If you can’t get a great job, start your own business. Service-oriented businesses, though they have drawbacks, are the easiest and cheapest to launch. The good habits you (hopefully) developed in college will serve you well in this competitive, primarily blue-collar, environment.
• Get an apartment with two or three roommates. And, believe it or not, you can live very well for practically nothing. Good food, wine, and entertainment don’t have to be expensive.
• Save much more than the experts tell you. Pay the government first (taxes can’t be avoided), your college loan next, and then put 15 percent of your income into an investment account. If you don’t make enough money to do that, get another job. Work 16 hours a day if necessary.
• If you begin to feel sorry for yourself, volunteer to work for an institution that treats people who have real problems – like cancer, AIDS, ALS, etc.
• Give yourself a little time once a week to slow down and smell the roses. Then get back to work.

This is probably not the kind of advice that Tamara Draut would like to hear, because it doesn’t do much to solve the “starting-out problem” on a global level. But I’d like to think it can help individual people – college grads and young people – become wealthy despite the challenges posed by our shaky economy.

[Ed. Note: If you know a young person who’s going to graduate next spring… or if one of your 2008 goals is to increase your income… pick up a copy of Michael Masterson’s New York Times best-seller, Automatic Wealth for Grads…and Anyone Else Just Starting Out. Learn more about this and all of Michael’s books at his website.] [Ed. Note: Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Palm Beach Letter. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.]