From Mac and Cheese to McLaren: Financial Expectations of Success

Shane and Tonya explore the shifting perceptions of financial success, diving into surprising salary and net worth expectations. Listen for insights on building realistic goals, managing "expense creep," and finding true financial fulfillment in business and life. 

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Transcript

Announcer: [00:00:00] This is IA Forward, your playbook for success as an independent insurance agent. Here to help you knock it out of the ballpark are your hosts, Shane Tatum and Tanya Lede.  

Tonya: As we go into 2025, I want to talk about an article that was recently in Empower, the financial services company. It was very eye opening to me. 

This article talked about what salaries Americans consider the minimum to be financially successful. This article shocked me. So walk through it and then talk about what our goals are. Would have to look like in 2025 to make this happen. And if it's even realistic,  

Shane: when you shared this with me, I was equally shocked. 

I'm evidently poor. I didn't know that you mentioned that to me earlier today, we're poor. Now, according to this survey, I thought we were doing all right. I was satisfied with my financial progress. [00:01:00] According to this survey. I would be classified well below in some cases. I feel like I make a good living. 

And so that's the question. Is it a regional issue? Is the survey, everybody lives in New York City and high housing costs, or California, Southern California, or San Francisco? I know there's a lot of variables that can take place, but even to get to the averages here.  

Tonya: So let's go through this boomers. 

People Born in 1946 to 1964. This is salary income that Americans say they consider the minimum to be financially successful. For boomers, they're saying right around 100K, 99. 9K a year. That makes perfect sense to me. And then you pop to Gen X and Gen X born from 65 to 80, the minimum salary they consider to be financially successful is 212, 000 a year. 

Shane: That's not household income. That's individual income, which is almost two and a half times what [00:02:00] boomers say. It takes them. So you're already jumping pretty well right there between boomers and Gen X.  

Tonya: This is where it's interesting because millennials born 81 to 96 It drops down a little. They consider the minimum salary to be financially successful 181, 000. 

Shane: Now, let me throw a little wrench into this because I can see why this goes down. I do feel like a lot of the millennials are somewhat minimalist. They are not necessarily The generation of excess. The other thing is just life stage. I'm been putting kids through college and a lot of the millennials are not there yet. 

Some are maybe starting to be there and financial success a lot of times is generated by life stage too. Oh my gosh, I've got to do this thing in front of me. That's also to play here in just the timing of where Gen X is and where millennials are in their stage of life.  

Tonya: You [00:03:00] realize that the youngest Millennials are 28 years old? 

Shane: I understand, but the oldest Millennials are 40. They're not putting kids through college right now. Some of them don't even have kids yet. My point is, is that it's going down because they do not need as much to live. Does that make sense?  

Tonya: To me, it's a generational reaction. I believe that they saw their Parents, Gen X, that were so incredibly success focused. 

You can watch movies from the 80s and 80s professionals that are represented in movies are these ruthless, Money, hungry, ignore the family, work all the time people. Is that a caricature of Gen X? Yes, absolutely, but there's a reason that those movies are caricatures of that. I believe that Millennials expecting less [00:04:00] has more to do with looking at Gen X and saying, That's really not what I want swinging the other way. 

Being way more focused on family, work life balance, enjoying life, enjoying friends, and realizing that time is money. If you want to spend your time doing other things, you're probably going to make a little less money because of it.  

Shane: Yes. But let's also remember that this was the generation that was failure to launch. 

So they're not moving out on their own. They didn't move out on their own as early as Xers did. Yes, you are right. We had the Gordon Gekko's, the Michael J. Fox movies, The Secret of My Success, the original Wall Street, all of these 80s movies that were Excess and all these things, but that's a generation that we're the mediators between boomers and millennials because they constantly seem to be at [00:05:00] friction with each other, at least in parodies. 

As millennials came into adulthood 15 years ago, they were failing to launch, so it doesn't take as much, but there is one disparity that throws this off, and that is net worth success. For Millennials is more than Gen X net worth, financial success by almost half a million dollars. So the net worth of Gen X that they consider themselves financially successful is around 5. 

3 million. And Millennials is between 5. 6 and 5. 7 million, at least 400, 000 there disparity, whereas there's a 40, 000, 45, 000 a year decrease in salary. Financial success or income financial success. Millennials think they have to be worth more from a net worth standpoint to have financial success than Gen X, but they believe they can make less. 

Is that a life [00:06:00] stage thing or is it because of the generational wealth ahead of them? Where they just don't need this much money to be financially successful because of various things in inheritance or gift opportunities from boomer generation or the older X generation. So there's a lot of things in there that could go into this mix around just that whole millennial thing. 

Tonya: Let's jump to the fun one. Now let's talk Gen Z. Born 97 to 2012. Are we ready for this, y'all? The salary that Americans consider the minimum to be financially successful for Gen Z is 588, 000 a year.  

Shane: It's a crazy number. Is this the influencer thing? They've never known life without social media. Is that accurate? 

Tonya: That is definitely accurate. I had the opportunity to mentor a young lady through a local university's [00:07:00] business program pre COVID. She was a senior about to graduate from college, about to start her first what I would call a big girl job. She didn't have her job yet, and she wasn't planning on really applying for anything. 

She and I were having lunch, and I asked her about her career goals. This was a program that the university had sent me a rundown things to ask them, things to talk with them about, how to encourage them to be successful, and all such things. And I asked her about where she wanted to be five years out of college, and her response was five years out of college, she was going to own a record label, and she was going to have a house on the water. 

In Destin, Florida, with an infinity pool, she was going to be driving a McLaren. She had these very specific things that she was going to be doing five years out of college. [00:08:00] Now, I remember five years out of college for me, and I had three goals. My goals coming out of college were I was going to be able to To afford to buy Kraft Macaroni and Cheese and not have to buy the high top or great value generic brand. 

I wanted to be able to have real orange juice. So I realized maybe I set the bar a little low for myself coming out of college, but those were the three things that I really wanted to achieve. She wanted an infinity pool overlooking the ocean in Destin and she was going to own a record label. I saw a true dichotomy. 

Between where I was coming out of college and where she was. Which is fantastic. Dream big. The American dream. You can do anything. And so I asked her, did she have contacts within the music industry? No. Did she have family in the music industry? No. This was what she was going to do by herself in five years with no knowledge or contacts within the music industry. 

And [00:09:00] when I asked how she was going to get there in five years, She cried. It wasn't that I was trying to upset her. It was more that I was trying to help her figure out what she was going to have to do to make this happen. And it just wasn't there.  

Shane: We are at risk of being perceived mean by being truthful. 

And that's a shame of where we're at. The problem is that You get labeled as a dream killer. You don't want to be labeled as a dream killer when you're being honest and truthful. By honest and truthful, I don't mean like you can't do it. Okay, let's talk about how you're going to achieve that goal. 

There's so much that gets wrapped up into that 18 to 25 year range. I'm all about dreaming big and chasing dreams. For whatever reason, I was never at a spot mentally where I was like, I'm going to do this. [00:10:00] And I'm going to get upset if you try to ask me questions about how I'm going to do this. That's the disconnect. 

Some of that is just experience, lack of knowledge. When you're looking at Gen Z, a whole generation, most of which are in that range I mentioned, 16 to 25, 16 to probably what, 27, 28, right on that edge of millennial, youngest millennials, 588, 000 a year, is extremely wealthy. In the, not only the world, but even within this country, it's the disparity of the fact that Gen X and millennials both have a net worth success factor in the 5. 

3 to 5. 7 range, but Gen Z 9. 5 million. It jumps another four million dollars of net worth in order for them to consider themselves financially successful. Minimum! Remember, we're talking minimums here. Whereas boomers consider themselves financially successful in [00:11:00] terms of net worth at a million dollars. 

So, boomers spent their life wanting to become millionaires. The rest of us believe we need between five and ten million dollars in net worth to be financially successful. Five to ten times more than boomers. I bring the life stage in, but also, what are you doing with that? Is that because you want the infinity pool? 

It's a lot of material things that go into this. That social media comparison, the rise of the answer. Anybody can become an influencer mindset. Anybody can build a following, build a tribe. That is where I feel this Gen Z thing is coming from a little bit of just, that's not realistic to all the way to just. 

The perception to the Gen Z's coming into the workforce about how expensive everything is right now in terms of just what it takes to live. They're having to have two and three roommates just to have an [00:12:00] apartment and that's a reality because they can't necessarily afford their own apartment in Dallas. 

It's just expensive. Rent's gone through the roof and these Gen Z's aren't necessarily buying homes. They're getting hammered on the rent side at this point. So, of course, 500, 000 a year salary seems like what I've got to have to be financially successful.  

Tonya: Maybe it's because insurance rates have gone up and they have to be able to pay their insurance bills. 

Shane: It's always the insurance that's the problem. The insurance industries are causing the problem, no doubt.  

Tonya: Talking about insurance, I wish someone had introduced me. To the world of insurance, when I was in college, when I was coming out of college, when I was in my 20s and even in my 30s, I had no idea that this was such a fantastic career option. 

Owning an independent agency, to me, is one of the only ways that I [00:13:00] can see Gen Z. Making these kind of numbers happen for themselves in the amount of time that might make them feel financially successful and that they were achieving their goals. One of the problems that I see happening is that people see numbers like this, they hear people talking, they start feeling down on themselves because they're not making the money. 

That the influencers, or the ads, or the people that are blowing smoke at networking events. First of all, let me tell you, if somebody's telling you how much money they're making, don't believe them.  

Shane: Absolutely.  

Tonya: It's not what they're making. But all of that said, the insurance industry is a really great place to be, especially as an independent agency owner. 

Shane: It is. You don't need this much money to live on. You need this much money to be in excess, to be able to buy a two million dollar [00:14:00] home. You don't need that much money to live as far as what's being portrayed here. You just don't.  

Tonya: Shane and I are not living in poverty.  

Shane: I'm not in poverty. I make a very good living. 

I have a nice home. I don't have a million dollar, I guess if I was in California it would probably be a million dollar home. I have a reasonable home. It's not excess in imagination, but it's good. I was driving into my driveway the other day. And of course now we're in Christmas mode because we're decorated for Christmas. 

We do outside lights on our house and I'm driving in and it's after dark and the lights are on and I'm like, This is so cool. It's not the material nature of it. It's just the fact that it was just a reminder of the last 20 years we'll, we'll have been in our house 20 years this coming February. That did not take 200, 000 a year or 500, 000 a year. 

What it took was being [00:15:00] reasonably conservative. We don't spend a lot of money in terms of the salary or the income that we make. And that's the problem. Most Americans spend what they make. If you make 50, 000 a year, you're going to spend 50, 000. If you make 100, 000, you're going to spend 100, 000. If you make 500, 000 a year, guess what? 

You're going to spend 500, 000 a year. So this whole thing is a facade. It might take that to keep up with the influencer that you're trying to become or meet or run in a circle of, but it doesn't take that much money. To be financially successful,  

Tonya: I'm going to raise the ante on what you said. For most Americans, if they are making 50, 000 a year, they're spending 60 and most Americans that are making 100, 000 a year are spending 150. 

Shane: And therein lies the problem because that's what we're doing. With our government budget. We're [00:16:00] spending more than we make. It costs that much to live based on what you decide to do. There was a really interesting little video coming across social media. It was a young lady in her early 20s. Holding a child at some event and an interviewer was like, What do you do? 

Do you work? And she was like, No, I'm a stay at home mom. And how much does it take for your husband to provide for your family? She said something like 20 something thousand dollars a year. And the person doing the interview was like, That's all it takes. Yeah. That's what it takes. I mean, we have a budget and we could have more. 

If I went to work, this interview went viral with the amount of money that it took for them to live. It was blowing people's minds. I don't think this young lady was ignorant at all. She was actually very smart and very clearly understanding what their budget was and where they spent money. I actually went the other direction than a lot of people went [00:17:00] with this sort of interview. 

I envision that she actually manages the household budget, so she knew exactly what was going on. And it was just refreshing to see that there was this young person that understood that You don't have to spend what you make. There is another way to do this. There is another approach.  

Tonya: Shane, what does this have to do with my agency? 

Shane: Actually, it has everything to do with your independent agency. Because if you're spending money you're not making, managing your finances, managing what you're doing, and we're doing this thing, Tanya's tired of hearing me use the phrase, expense creep. Expense creep is you don't realize what you're spending because it just goes up and up subscriptions to investments That aren't working that you don't pull back These just creep up on you and you don't pay attention the next thing you have Doubled your expenses from three years ago It's not because you needed to because [00:18:00] you are making that much more money Or maybe you are making that much more money, and you Aren't making the profit you could be making because it's just not that big of a deal anymore because you've got more money That's actually the thing that that has happened to our organization a little bit and it's not bad. 

It's natural It happens to everybody the more successful you get the more For  

Tonya: the first part of my adult career, I worked for a gentleman who was so accounting, expense creep minded, that he would fuss at me that my handwriting was too big, and I should learn to write smaller. to conserve ink because in the long term, that would save money. 

The man took paper from every hotel, every airline, and I would get all these notes on random pieces of paper because he didn't buy a [00:19:00] notepad. I am blessed to have worked for a person. who taught me that you can be a very successful marketer, you can be a very successful promoter, but have the balance of don't spend. 

In our household, I'm not the spender, my husband is. It's an interesting dynamic because I'm the outgoing one and he's the more quiet one, but he likes really nice things. I like really nice things. I just, I don't like to pay for them and I'm going to thrift or find a coupon or figure out some way to get the nice thing and make it as affordable as possible. 

To me, it's not all about how much money you make. It is more about how you're able to take that money to create time and enjoy your life. Now, I would not have said that in my 20s. I would not have said that in my thirties, but sitting where I [00:20:00] am now, I get it. And expense creep is such a challenge for our personal budgets as well as our agency budgets. 

Going into 2025, take the time to look at it. Take a deep dive into it. Even if it's nine bucks a month, if you're not using it, that's almost 120 a year. That is a fantastic idea. Dinner, with your significant other, or a cute outfit at TJ Maxx.  

Shane: So, When my dad accepted the position as President and CEO of a community bank here in East Texas, everybody thought he was crazy. 

He was tight from a spending standpoint. Because he was so concerned about the growth and profitability of the bank, he felt that his charge as a finance guy was to manage expenses. If you want to know how to be profitable in any business, and specifically the independent agency business, Well, to Tanya's point, 8 to 10 of those 1 a [00:21:00] year savings, which they're there, they exist, multiplies out to 10, 000 and that 10, 000 to 12, 000 can take you on a significant family vacation plus some. 

So just think about it. If you add all these savings up, that savings goes to your bottom line and you're the independent agency owner. Then that bottom line gets to come back to you in the form of, of distribution, the profit, which can do something for your family. I'm not advocate going and buying a McLaren. 

I love assets that are appreciating assets, and I'm going to. Include family vacations as an appreciating asset. It's way more than money. If you're not taking vacation seeing your family in doing that, then that's actually creating a depreciating asset around family time back to your college student. 

You're advising. I wish that when I was 21, 22 [00:22:00] years old, that I would have had somebody ask me those questions. I actually wish when I was 13 that somebody would have asked me pointedly, Okay, what do you need to do to become the shortstop of the Houston Astros? Because that's what I was going to do, is I was going to play Major League Baseball. 

Like every other baseball player. baseball player in, in the world. Nobody ever said that. Nobody ever asked me, okay, what do you need to do? Do you need some help setting some goals? Physical traits aside, what do you have to do to meet your goal? That goes to so many things today. In our businesses and so many things this time of year, it's just such a refreshing reset time for me to pause, look and think and pray and get discernment about the next directional place that we need to go. 

Sometimes it's just. Stop spending as much money as we're spending on things that aren't working. Sometimes it's reviewing things that don't work. [00:23:00] And that's what makes your business better in the end. Making those investments and having those goals. And when somebody's challenging you. What is your goal to achieve that dream? 

There's no reason to cry about it or get upset about it. It's for a good purpose.  

Tonya: Set realistic goals. Make a plan to reach those goals, because to me, that's what really makes a difference. We can set goals all day long, but you have to have a realistic plan to reach those goals. And stop trying to keep up with the Joneses. 

Create the life that you love, that brings you serenity and happiness and joy in your idea of success. And when you read articles like this and you're thinking, I am not anywhere near the minimums of what the world says I should be making, it's okay. You are going to be okay. If you are having [00:24:00] personal, spiritual, financial success, then that is your idea of success. 

Forget what everybody else is saying.  

Shane: Yeah. The keeping up with the Joneses is right. And the new Joneses are the social media influencers. I'm excited for them as individual businesses that they figured out how to make money being an influencer. They had a dream. They chased a dream. It's hard to build an audience. 

It's extremely hard. We've done a podcast for almost three years now, and it's hard to build an audience. And we're in a very extreme niche within the insurance industry. But still, if you think about these folks that have built followings, that's the new Joneses. Kids are being asked, what do you want to do when you grow up? 

And now, instead of doctor or lawyer or major league baseball player, It's, I want to be an influencer. There's so many kids seeing this. It's no different than the percentage of kids that are actually going to become major league baseball players. It's the same with influencers. [00:25:00] There are a few lucky ones who did something possibly obscene to get into catapulted spot. 

We have a recent young lady that went viral off of an interview of an inappropriate remark. Who is now everywhere on social media. Not everybody gets that route and not everybody wants that route. We have to watch out for it because the new Joneses are amplified through social media and sometimes it's just not real and we need to keep perspective around it. 

Tonya: I'm going to leave us today with this quote from Billie Jean King. Natural talent only determines the limits of your potential. It's dedication and a willingness to discipline your life that makes you great.  

Shane: Attitude's a choice. Make a great one.  

Tonya: Bye  

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