CNBC financial analyst Jim Cramer thinks Gen Z millennials are spending too much on discretionary items and not putting enough aside for investments despite economic challenges that has many young adults living paycheck to paycheck.
“They seem like they have a lot of money, even when they don’t have a lot of money,” Cramer said of those between the ages of 18 and 24.
Cramer said that youngsters who frequent the restaurant that he owns in New York City often order $14 margaritas “as if [money] grew on a tree.”
“On the one hand, you’re allowed to have all the margaritas you want,” Cramer said.
“But on the other hand, you say, ‘I can’t invest, I have student loans’.”
The CNBC star added: “I think that’s counterintuitive. They have to change their thinking.”
Last year, Money, Inc. reported that Cramer has a net worth in excess of $100 million. He is said to have started investing in stocks during his career as a journalist.
Cramer told CNBC that his humble beginnings should be an example to young people who are experiencing financial hardship.
“I know you might say, ‘Oh, Cramer’s rich; I don’t want to hear his lecture.’ But did you live in your car on the side of Interstate 5?” he asked.
Cramer said that when he was living out of his car, he continued putting $100 into a stock index fund each month.
“I put that money away, and it made me a millionaire,” he said.
“I’m not calling for something draconian. I’m not saying don’t go out. What I am saying is: Don’t spend money each week that you shouldn’t have,” Cramer said.
He said that young people should use whatever they spend on discretionary spending and pour it into investments each month, even if it’s “the equivalent of going to two movies or a bottle of wine.”
“Just keep it consistent. Over time, stocks have been proven to be an unbelievable asset,” he said.
“People always say, ‘I have nothing to invest, so I can’t invest.’ I hear that from people in their 20s all the time,” Cramer said.
“But if you have a few bucks to spend going out, then you have money to invest, he argues.”
“People have a million excuses why they don’t want to get rich.”
A recent survey conducted by Deloitte found that 29% of Gen Z millennials said cost of living was their top concern.
Just a quarter of those surveyed said they can comfortably cover their monthly living expenses while nearly half said they live paycheck to paycheck.