The UWIRE Forum

College a breeding ground for ‘$30K millionaires’
August 10, 2009, 5:49 pm
Filed under: Uncategorized

By Dave Player, guest columnist

They call them “$30,000 millionaires.” Young people, usually in their mid-20’s to early 30’s, who live an exorbitant “millionaire” lifestyle beyond their modest post-college financial means. In a in-depth analysis, Dallas Observer writer Andrea Grimes describes them as having a “distinctive behavioral pattern of spending more money than they make in an attempt to appear wealthy and desirable.” Such individuals can be found peacocking around trendy neighborhood hot spots in leased luxury cars and designer clothes as the “$30k millionaire” is fixated on maintaining a personal image that conveys their fictitious wealth to any passersby. The concept is simple; if you don’t have it, fake it.

There is of course a flip-side to the “$30k millionaire’s” opulence; it’s completely unsustainable. Practitioners routinely lease, rent and buy on credit in an effort to maintain their image. When their bills finally catch up to them, the offending party is left grasping for air. Grimes points to a 667 average credit score for the Dallas-Fort Worth metroplex, 25 points below the national average of 692. However, the true issue at hand is ingrained far deeper into the national psyche than Dallas yuppies overpaying for bottle service. Nationwide, 21 percent of students have credit card balances between $3,000 and $7,000, and the average debt is $3,173 — the highest ever recorded, according to a Sallie Mae study from April 2009.

Most young people, while they may dream of the same extravagant lifestyle, don’t actually seek immediately to indulge those carnal impulses. The safest bet for an eventual high-level salary is embarking on a steady career track equipped with a college degree.

But despite being a recipe for future financial stability, college is also the place with the “$30k millionaires” learn their bad habits.

College tuition, along with books, activity fees and the basic necessities like food, housing and transportation make college an extremely costly investment. The time commitment of a full course load makes it difficult for many students to work a part-time job, much less a full-time one. As such, students must find some outside means to subsidize their education, often in the form of generous parents.

It is that freedom from financial accountability that in part leads to the popular view of college as a time for personal enjoyment and relaxation before the shackles of adulthood. Whether it’s the cult-classic film “Animal House” or musician Asher Roth’s summer hit “I Love College”, society tends to view the undergraduate years as a time for young people to sow their proverbial oats.

But years of consuming at a level disproportionate with the income they are capable of generating can instill an individual with a sense of entitlement that lives on once they must be weaned from the checkbook of mom and dad.

This reality is especially true as advertisers target young people as one of the largest spending demographics and one most likely to quickly part with their money. With the basic necessities already provided for it becomes easy to fixate on the status and image of material wealth.

Pop culture already couples decadence and youth; MTV features shows like “My Super Sweet 16” and “MTV Cribs: Teens” that highlight teenagers living extremely lavish lifestyles provided by their wealthy parents. Such shows reinforce the notion that it doesn’t matter if you earned it, so long as you have it.

I recently ventured down to the entertainment district in Austin, Texas, a town known for its nightlife and college party scene. I was hoping to gather evidence to determine first-hand whether the “$30k millionaire” mentality had seeped into the minds of my generation’s best and brightest. The targets were easy to spot; just look for the guy who’s buying drinks.

The first high-roller I approached seem to fit the archetype, a young Asian-American in a sequined T-shirt attempting to coax a pair of girls to take a shot of tequila with him.

“C’mon, you’ll love it” I overheard him say, “it’s Patron!” After some small talk about the sports highlights playing above the bar he introduced himself as Joseph, a junior at the University of Texas at Austin. When he volunteered the information that he was pre-med, I inquired as to what kind of employment he had. I wanted to know what kind of income compelled him to buy rounds of Patron.

“Oh I’ve got a sweet internship” he replied. When I pressed as to the level of pay he reluctantly revealed “It’s $8 an hour right now” before perking up, “but I’ll make a lot more next summer!”. For reference, minimum wage is $7.25 an hour.

Another prime example, Gary, complimented his designer button-down with a pair of decorative cowboy boots and didn’t look a day over 18 years. While waiting at the bar, Gary drunkenly pulled up next to me and asked to close his tab. As I glance over I saw him signing a receipt for a $60 tab. When I asked if he had a job and was told he did not, curiosity provoked me to question how he paid for such expenses. “My parents pay for food and stuff” was his answer as he turned to stumble out the door. I hadn’t expected him to be so forth coming; most undergraduates are a bit shyer about their dependency.

Inevitably, expenses like cell phones, car insurance, utility costs, and so many other luxuries that young people often take for granted will become monthly bills in the mail box. Expensive clothes, fine dining, and rounds of Patron will not be feasible, at least, not on a balance checkbook. In a time when the economy is suffering yet pop culture is still telling us to “turn our swag on”, frugality becomes an even greater virtue. Hopefully when that day comes college students will be able to use the prudence they learned in school to make wise spending decisions.

Dave Player is a junior at the University of Texas and a columnist for the Daily Texan.


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