Intergenerational jealousy seems to be on the rise lately. The baby boomers are being accused of stacking the financial world in their own favour and hoarded their wealth.

It’s clear the older generation has messed up the housing market badly, with a system unable to produce anywhere near enough new homes to meet the needs of younger generations. That’s a disgrace. However other aspects of the financial system do not limit young people. 

There is nothing unusual in older people being wealthier. They have been accumulating much longer. Compound interest, earning profits on previous profits, is very powerful. When the baby boomers were young, they struggled, while their parents and grandparents were well off. They had to battle to get ahead.

The boomers have been aided by a compulsory superannuation system that started around 1992. It helped them and will continue to help all workers including young people, ongoing. Yet that is only part of the story. Those well off now also accumulated assets and income in ways other than super.

Today’s young people can ensure their own financial success with focus, discipline and determination. The first thing they must do is work hard on their education and training. Learn a valued skill that will get them a job with a regular, reliable income, at a reasonable level.

Once the income starts flowing, syphon off a small amount that must not be spent on living costs. This can be done by setting up a regular auto-debit into a separate savings account each payday. The amount can start small but must happen always, long term.

While savings are accumulating study how to buy a home – how much can be borrowed, the deposit needed, who will lend, what government assistance is available. The savings goal should be the deposit. Once that is reached, buy a home.

Even after buying, the regular saving should continue. Rebuild the savings account. This time buy managed funds or shares that earn higher returns than bank accounts. Set up a regular auto-contribution into a managed fund.

Continue buying assets that will grow. Consider another property. Or just keep buying shares or funds. Consider borrowing to buy more, just like borrowing for a property. The tax deductibility of investment loan interest will help.

Always buy appreciating assets, things that will grow in value over the years – houses, shares, funds, land, farms. Active monitoring and management will help.

To get ahead young people need to learn, earn pay rises, focus on saving and buying good assets, and be determined in the face of difficulty. Long term persistence pays.