A Palermo Properties Team Perspective

If you’ve spent any time around people in their mid-20s to mid-40s, you’ve probably heard some version of the same frustration: “Why is everything so hard right now?”

Leonard Steinberg—Compass’ Chief Evangelist—calls this stage the Life-Compounding Years, and he’s right. From about age 25 through 45, the fun, flexible years of college and early adulthood start to give way to careers, bills, responsibilities, and the long runway it takes to build an actual adult life. None of this is new—but in the Bay Area, it’s intensified.

Welcome to the First Years of Compounding

Ages 25–45 are the earliest years of compounding interest—financially and in life.

Think of a simple example:

• Start with $1,000

• Earn 5% per year

• Add $500/month starting at age 25

By year 10? $79,000
By year 20? $208,000
By year 30? $408,000
By year 50? Over $1.3 million

That’s the quiet, steady power of compounding—not instant wins, but meaningful growth for those willing to persist.

The Bay Area Twist: Gen Z and Millennials Are Already Making the Right Trade-Offs

Today’s 25–35-year-olds—older Gen Z and younger Millennials—are surprisingly disciplined. We’re seeing this firsthand across San Mateo County, Silicon Valley, and San Francisco:

• Cutting back on alcohol

• Spending less on designer labels

• Driving EVs instead of gas cars

• Rooming with friends to reduce housing costs

• Prioritizing mental and physical health

• Choosing experiences over expensive material things

This generation is actually doing the work. They’re sacrificing now so they can build long-term stability.

But the key question is: Where are those savings going?

Too often the answer is: nowhere strategic.

Forced Savings: The Habit That Builds Homeowners

Forced savings—regular, automated contributions to investment and retirement accounts—is the single most powerful tool young Bay Area residents have.

Your cutbacks and discipline should flow directly into:

• Stock portfolios

• ETF and index fund positions

• Roth IRAs and 401(k)s

• High-yield emergency reserves

• Down-payment savings vehicles

Because here’s the truth:

The people who own Bay Area homes today didn’t “time” the market.

They saved early, often painfully, and let compounding interest do the heavy lifting over decades.

Homeownership in the Bay Area Is Still Achievable—With the Right Plan

At Palermo Properties Team, we see it every week: buyers in their late 20s and early 30s purchasing condos, townhomes, TIC units, and starter homes because they embraced forced savings early on.

And once they’re homeowners, the compounding accelerates again—this time through:

• Principal paydown

• Appreciation

• Tax advantages

• Equity growth

• Re-leveraging opportunities for their second home

Buying a home in the Bay Area isn’t a single event—it’s a byproduct of disciplined habits formed 5, 10, even 15 years earlier.

The Lesson: Stop Comparing Yourself to Boomers—Copy Their Time Horizon

Much of the frustration younger generations feel comes from comparing themselves to people who have had 20–40 years of compounding behind them. Boomers didn’t become wealthy instantly—they just stayed in the game long enough.

If Gen Z and Millennials stay consistent with their savings and invest intelligently, they could outperform every previous generation.

Final Thought

The Bay Area will always be one of the world’s most competitive housing markets—but it will also always reward the people who understand compounding, discipline, and long-term planning.

For anyone 25–35 who is cutting back, saving more, and thinking about your financial future: you’re doing it right. Redirect those savings into vehicles that work while you sleep, and when the moment comes to buy your first home, you’ll be prepared—not panicked.

When you’re ready to map out the path from “forced savings” to “first home,” the Palermo Properties Team is here to help you strategize, plan, and execute with clarity and confidence.

 - Mark Palermo, President -Palermo Properties Team 

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