Mrs. Dow Jones: Why Old Wealth Rules Fail Millennials When Cost of Living Is So High

If millennials follow the rulebook their parents used, they may be in trouble, says financial influencer Haley Sacks, known as Mrs. Dow Jones. She’s seeing younger generations struggle as wages don’t keep pace with inflation. College education and housing are no longer affordable.

“I’m in my DMs and people are complaining because since 2000, the cost of living has gone up 67%, but wages have gone up 7%,” Sacks said on a recent episode of the Bloomberg Talks podcast. “There need to be new rules that meet us where we are at now.”

If anything, her cost of living example number is an understatement. Between 2001 and 2024, the cost of maintaining a basic standard of living actually rose 106%, according to the LISEP’s True Living Cost (TLC) Index.

Sacks, who has spent nine years building her brand, recently published a book, “Future Rich Person: The New Rules of Building Wealth.” In it, she pushes back on the finance industry’s canonical “all debt is bad” line.

“One of the old rules of building wealth is that all debt is bad, that we need to all be out of debt,” she said. “But, I mean, you guys talk to really rich people all day. You know, they love leverage … If you have student debt and it’s below 7%, which is sort of the threshold of low interest rate … it’s actually OK. Let’s just pay the minimum on it and use whatever extra money that you have left over on these other financial goals.”

Run the numbers on a hypothetical millennial balance sheet. Say you have $30,000 in federal student loans at 5%, and $500 a month in discretionary cash. Option A: throw all $500 at the loan each month. Option B: pay the minimum, route the $500 into a workplace 401(k) with a standard 50% employer match on the first 6% of salary. Invest the rest in a low-cost index fund.

In Option B, the employer match alone is an instant 50% return on every matched dollar before the market does anything. The loan costs 5% a year. Choosing the loan payoff over the match means trading a 50% return for a 5% return. Even ignoring the match, a diversified equity portfolio has historically returned roughly 7% to 10% annualized over long periods, comfortably above a 5% loan.

This is what Sacks means by leverage. Wealthy households do not rush to extinguish a 3% mortgage. They let cheap money sit while their capital compounds elsewhere.

The variable that flips the answer

The interest rate at play is important. Sacks’s 7% threshold is a reasonable line because it sits at the upper edge of long-run expected stock market returns after inflation. Above that line, paying down debt becomes the better “investment.”

Same $500 a month, but now the debt is a $10,000 credit card at 24%. Investing instead of paying it down means earning maybe 8% in the market while bleeding 24% on the card. You are losing roughly 16 points a year on every dollar you choose not to apply to the balance. There is no diversified investment that reliably clears a 24% hurdle. Pay it off aggressively before anything else except capturing the employer match.

The rule is simple: compare the rate on the debt to the rate you can earn elsewhere, after tax and after any employer match.

Tips for millennials

1. List every debt you have with its exact interest rate. Sort the list from highest rate to lowest.
2. Draw a line at 7%. Everything above the line gets aggressive extra payments. Everything below gets the minimum.
3. Before any extra debt payment above the minimum, capture your full employer 401(k) match. That match is a guaranteed return no debt rate beats.
4. Park 3 to 6 months of expenses in a high-yield savings account so a surprise bill does not push you back onto a 24% credit card.
5. Route anything left after those steps into a low-cost index fund inside a Roth IRA or taxable brokerage.