Tuesday, 30 May 2023

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American Dream is difficult to attain even with six figures

American Dream is difficult to attain even with six figures

This bank CEO is not like the other girls, or at least he doesn’t want you to think he is, as he asserts that he knows his customers are struggling. “In many ways, someone today that’s making $100,000-plus really struggles to live the American Dream for a variety of different reasons, and they need a relationship bank,” Anthony Noto, the chief executive of SoFi Technologies, said in a JPMorgan investor conference this week.

Citing the hefty price of going to college, Noto explains that many workers are graduating and “going to be in a hole and they can’t invest.” He’s not wrong. The price of higher education is starting younger generations off on the wrong economic foot, so to speak, making it hard for them to build wealth and reach the same financial milestones as previous cohorts.

“If they buy a home that’s too big relative to their means, they’re not going to be able to save and they’re going to constantly be running over budget,” he adds, explaining that’s where his company would like to come in to help these individuals invest. To be fair, the executive of the fintech company was framing SoFi as the solution to many (or all) of these problems. 

As a giant in the fintech space, straddling the line between financial services and an app, SoFi is active in student and personal loans, originating billions every quarter, but as the Motley Fool notes, the market seems skeptical. Its stock is up about 10% this year, but that’s less than half the increase of the Nasdaq Composite, a benchmark index for tech stocks.

And about that unattainable American Dream because of student loans thing, Noto’s company has sued the government in order to try to stop the pause on student loans, because that’s a huge plank of its business. “SoFi’s attempt to end the student loan payment pause and force millions of Americans into repayment while raking in massive revenues and handing out huge executive paychecks represents corporate greed at its worst,” Congresswoman Ayanna Pressley (MA-07) and Senator Elizabeth Warren (D-MA) said in a statement in April.

Still, there’s an underlying truth to Noto’s words. During a time of high inflation, many, especially younger individuals who are more impacted by market volatility and graduated with greater debt, have realized that the American Dream is no longer accessible or affordable. Wages aren’t keeping pace with inflation, which impacts those with entry-level jobs at a…

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