Overview of Is Financial Independence Still Possible for Gen Z?
In this BiggerPockets Money episode, Evan Lawler and Scott Trench break down whether FIRE is still realistic for Gen Z in today’s economy. Their answer: yes, financial independence is still possible for many Gen Z workers, but the path looks different and requires more intentional planning. They frame FIRE around three core bets—career income growth, controlled spending, and long-term investment returns—and use data to compare Gen Z with millennials on housing, wages, and student debt.
Core Thesis: FIRE Still Works, But the Assumptions Matter
Scott argues that FIRE is still achievable for many Gen Zers because:
- Income usually rises significantly over time
- A typical worker’s earnings can roughly double from ages 25 to 45.
- Spending can stay flat relative to income
- If expenses don’t rise as fast as earnings, the gap can be invested.
- Long-term investing still compounds
- Even if future returns are lower than the last decade, historical averages still support FI over a long time horizon.
Their overall conclusion: for many Gen Z earners, FIRE is still possible in roughly 17–20 years if they can maintain a strong savings rate and stay disciplined.
Key Data Points Discussed
Housing: Renting Is Not Dramatically Worse Than Before
The hosts challenge the assumption that Gen Z has been crushed by rent inflation relative to millennials:
- Using a rent-to-income comparison for young renters, the ratio appears roughly flat or only slightly worse for Gen Z than for millennials.
- They emphasize that while buying a home is much harder now, renting may be closer to prior generations’ affordability than people assume.
- Their warning: don’t compare inflation-adjusted income to nominal rent—the math needs to be consistent.
Income Growth: The Biggest Hidden Advantage
A major part of the argument is that early-career income is not where most people peak.
- Median worker pay rises meaningfully from early 20s into mid-career.
- A Gen Z worker who keeps expenses steady can benefit from this compounding income growth.
- Scott notes that this “feels invisible” when you’re young, but it is central to how FI becomes possible.
Spending Spread: The Gap Between Quintiles Is Huge
They use regional spending data to show how much choice exists in lifestyle spending:
- In the example region, one group spends around $2,500/month, while another spends $10,600/month.
- Their point: if others in your area can live on a lower budget, then it is possible for you too.
- This reinforces a core FIRE principle: FI depends less on income alone and more on the spread between income and spending.
Wages and Side Hustles: Household Income Matters More Than Just Salary
The hosts discuss how Gen Z may have more access to side income:
- Real wages have been growing, but not explosively.
- Household income is often growing faster than wages, partly because of side hustles, online income, and dual-income households.
- Evan shares that his own side income helped accelerate his FI path.
- Scott frames this as an opportunity, not a moral judgment: ambitious people can use extra income streams to widen the savings gap.
Investment Returns: Don’t Assume the Last 15 Years Repeat
Scott cautions Gen Z against assuming the same market performance millennials enjoyed from roughly 2011–2026.
- He expects future returns may be closer to historical averages, not the exceptional recent period.
- That means Gen Z should build projections more conservatively.
- He also notes that a future downturn could ironically help long-term investors if they keep buying consistently.
Social Security: Probably Not Zero, But Likely Weaker
Both hosts are skeptical that Social Security disappears entirely, but they expect some impairment:
- Gen Z generally does not count on Social Security as a major part of FI plans.
- Scott suggests it is more realistic to assume later benefits or reduced benefits, not total elimination.
- He also notes that if someone truly stops earning taxable work income for decades, their Social Security payout could be affected.
Student Debt: Surprisingly Better for Gen Z
One of the most surprising findings in the episode is that Gen Z may actually be in a better position than millennials on student debt:
- Inflation-adjusted average debt among borrowers fell from about $35,600 for 2013–2014 graduates to about $29,560 for 2023–2024 graduates.
- The share of graduates with debt fell from 61% to 47%.
- Starting pay is also somewhat higher in real terms.
- The takeaway: Gen Z appears more likely to treat college like an investment decision rather than a default assumption.
Biggest Headwinds for Gen Z
1. Homeownership and House Hacking Are Much Harder
This is the strongest negative factor discussed.
- Home prices and mortgage rates make buying far harder than it was for many millennials.
- The classic “buy a duplex and live cheaply while house hacking” strategy is much less accessible now.
- Scott sees this as one of the biggest barriers to rapid FI.
2. Lower Market Returns Could Slow the Journey
If future investment returns are more modest, FI timelines will stretch.
3. Career Disruption From AI Is an Unknown
Scott flags AI as a wildcard that could affect knowledge work opportunities and income growth.
Biggest Tailwinds for Gen Z
1. Better Access to Information
Gen Z has unprecedented access to financial education, online tools, and FIRE content.
2. Smarter Use of College
The data suggests more caution and better ROI thinking around higher education.
3. More Flexible Income Opportunities
Digital side hustles, content creation, and remote work make it easier to supplement wages.
4. Stronger Awareness of Spending Choices
Evan’s example shows that a high earners can still live on a relatively modest budget and make serious progress.
Main Takeaways
- FIRE is still possible for Gen Z, but not by assuming the same easy wins millennials had.
- Income growth + controlled spending + disciplined investing remains the formula.
- Gen Z faces a real housing challenge, especially for buying property, but some fears about rent and student debt are overstated.
- The smartest Gen Z FI strategy is likely to involve:
- keeping expenses low,
- pursuing income growth aggressively,
- using side hustles strategically,
- and being conservative about future market returns.
Resources Mentioned
- BiggerPockets Money resources and data tools
- FI-friendly professionals list
- Referenced budgeting and percentile benchmark tools for comparing income/spending by region and age
Bottom Line
The episode’s message is not that Gen Z has it easy—it’s that FIRE is still viable if Gen Z adapts to current realities rather than relying on the old playbook. The path may be harder on housing and more uncertain on investing, but improved student debt trends, stronger income options, and better access to information still make financial independence achievable for many.