What the Stock Market Crash Means to You, a Broke Millennial

How will your rent and student loans change?

by Mack Lamoureux
Feb 6 2018, 8:03pm

Photo via screenshot.

So… some shit is going down in the stock markets it seems.

It’s dropping and it’s dropping fast. On Friday, the Dow Jones industrial average dropped 666 points (nice) and on Monday, it dropped by 1,175 points—which represents the biggest one day point drop in history—after investors were spooked by possible high interest rates and the threat of rising inflation. Now, if you’re like me, you don’t really know what that means but you know it sounds bad.

To further that sense of anxiety, if you take even a peak at the headlines going out today and yesterday it feels like you might as well just walk out of a window, 1929 stockbroker style—however, that might not necessarily be the case. Shannon Lee Simmons, the founder of the New School of Finance, told VICE that while the numbers seem immense, “market volatility is normal” and that “you should simply stick to your plans” in terms of investment.

Anyhoo, it’s not like this is even our first time dealing with this shit.

“Many millennials graduated during and just after the 2008/2009 stock market crash,” Simmons told VICE. “Their first experience hearing about investing as an adult may have been negative. Hopefully this volatility doesn't solidify any apprehension or distrust of investment markets.”

All that being said, it’s hard not to be worried when you read sentences about trillions—TRILLIONS—of dollars being lost in the plunge. So because we broke, anxious millennials here at VICE know our audience—other broke, anxious millennials (there are a lot of us)—we’re here to answer some questions. This is what you, a broke-as-fuck millennial, need to know:

Is the stock market crash going to impact the $1,600 in rent I pay for my closet-sized apartment?
No, it’s probably not. The reason behind the fact that most of us pay insane amount of rent is real estate, not the stock markets. There are several things that drive these prices, mainly being the ever existing pull of supply and demand. An increase of trained young professionals making their way to major cities drives up demand for livings spaces—meaning that the increasingly-smaller spaces that you, a broke millennial, would be going after become more expensive.

Shitty rental rules don’t help things either.

How will this affect my student loan of $42,598?
In Canada, federal (and most provincial) student loans have locked-in monthly payments, so a change in interest rates won’t affect you today, but will change how much you pay in interest over the course of the loan if you have chosen a floating rate. So a change in the prime rate could affect you like eight years from now when you pay your loan off a few months earlier or later than planned.

[My boss wrote this because I am very, very dumb.]

How will this affect my investments?

First of all, let me start by saying: you have investments?!!? Nice work. Secondly, this is where you might be the most impacted. However it’s not completely doom and gloom—Simmons told VICE that if you’re investing for ten years down the road, this plunge “shouldn’t keep you awake at night.”

“Yes, it's scary, but it's a normal part of investing,” Simmons said. “This recent volatility may make some first time investors nervous, especially if this is their first taste of investing. But, as long as they don't need that money for a long time, then they can handle the ups and downs of the market and hopefully wait out the storm.”

However, if you’re investing money you might need in the next three to four years, like for a downpayment… well, it’s going to be a lot scarier. As Simmons says, it’s “so so so important not to invest money that you may need in the short-run.”

How will affect my job(s)?
Because you’re a broke-as-fuck millennial, you are most likely working for a soulless corporation or several soulless sharing-economy corporations. And if that’s the case, no this most likely will not affect you. While yes, a drop in the stock market changes the value of a company on paper, it tends not to influence actual corporate profits very often. It certainly does influence investors in the company you work for but, when the drops are this wide, most companies are affected, which means a relatively even playing field.

That said, you’re probably still going to lose your job, but that’s because you’re reading this story while hiding in the bathroom at work. Get back to work!

What about Bitcoin?
Lol, moving on.

OK, first of all, please don’t yell at me. Secondly, no it really doesn’t seem to be as bad as it is. Now, again, I’m no stock market expert but there are several things making this look way worse than it is. First of all, as this Poynter article articulately puts it, the market “has done that before. In fact, it has done far worse in a single day.” This is because the markets have grown so much in several years, and yes this is the biggest drop in points, but the thing is the points don’t matter as much as the percentages. The 1,175 points for the Dow Jones only constituted a 4.6 percent drop—whereas in 2008 it was 7.8 percent and in 1986 it was a devastating 22 percent. Furthermore, the stocks were riding such a high that even with a major drop, many of them are still sitting a lot prettier than they were a year ago.

So, my best advice for you—and I should be perfectly clear on this, do NOT listen to my advice on this—just go back to not giving two shits about the stock market and scraping by paycheque-to-paycheque like a good young person should.

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