SoFi CEO Anthony Noto claims he’s getting what it means to make a low six figures. Christopher Goodney – Bloomberg/Getty Images
This bank CEO isn’t like the other girls, or at least he doesn’t want you to think he is, because he maintains that he knows his customers are suffering. “In many ways, someone today earning more than $100,000 is struggling to live the American Dream for a variety of different reasons, and needs a relationship bank,” Anthony Noto, CEO of SoFi Technologies, said at a JPMorgan investor conference this week.
Citing the steep price of attending college, Noto explains that many workers graduate and “will be on the hook and won’t be able to invest.” He is not mistaken. The price of higher education starts the younger generations on the wrong economic foundation, so to speak, making it difficult for them to build wealth and reach the same financial milestones as previous cohorts.
“If they buy a house that’s too big for their means, they won’t be able to save and will continually go over budget,” he adds, explaining that this is where his company wants to get in to help these individuals invest. To be fair, the fintech CEO was positioning SoFi as a solution to many (or all) of these problems.
As a fintech giant straddling the line between financial services and app, SoFi is active in student and personal loans, churning out billions of dollars 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 in the Nasdaq Composite, a benchmark for technology stocks.
And on that elusive American Dream because of the student loan thing, Noto sued the government to try and stop the hiatus from student loans, because that’s a huge part of its business. “SoFi’s attempt to end student loan defaults and force millions of Americans to repay while raking in massive revenue and handing out massive executive salaries represents corporate greed at its worst,” —MA) said in a statement in April.
There is still an underlying truth to Noto’s words. During a period of high inflation, many, especially young people who were more affected by market fluctuations and graduated with more debt, realized that the American Dream was no longer accessible or affordable. Wages are not keeping up with inflation, which affects those with entry-level jobs at a higher level. All of this has led many millennials to sound like the guy from SoFi Technologies, stating that a low six-figure salary just isn’t the goal anymore. It’s easier to see savings dwindle even with an annual wage of $100,000, as a Morning Consult survey found that households who make more than $100,000 a year see the greatest decline in financial well-being compared to last year.
It doesn’t help that the hallmarks of the American Dream were buying a home and eventually retiring, things that have always been very difficult but are starting to feel like trying with today’s youth grappling with more financial insecurity. With age in a tough housing market, some Gen Z and millennials are relying on their parents to get by and pay their bills. The retirement bench job has also been moved, with experts now predicting that even $1 million is too little for a comfortable retirement.
Even over $100,000 Americans feel restless and calm. “Compared to previous generations, $125,000 is not enough,” says Kelly, the 29-year-old who works in tech. Wealth Alicia Adamczyk, “My parents raised four kids on it. I expected that when you make all that money, you can live a comfortable life.”
And a majority (61%) of millennials and Gen Zers told the Dave and Harris Poll banking app in 2022 that they lack confidence in their ability to take on their goals. It has gotten to a point where many don’t believe they can afford their dream future, dream America or not.