We don't know their debt level or their interest rates. I have student loans from grad school 10 years ago at 3.5% (and I write off the interest). I pay down about $2k/year. It's not a priority. It sounds bad, but if people prioritize investing, it really isn't.
Ah, but that's not the case here, they said they couldn't invest because of debt, and had to pay it all off first (aside from saving for a down payment), which would take 15-20 years at 1-2k/yr.
That's very different than not prioritizing it for investments.
We don't know their debt level of interest rates, but it's easy to construct a plausible set of assumptions that could result in them only paying off $2k in principal per year while not having "enough" money (in a mainstream, not mustachian sense) to invest.
Let's assume they borrowed $62,500 each, for a total of $125K. Let's also assume their interest rate is 6.8%. Let's further assume that their loans are set on a 25-year amortization schedule to keep the payments "affordable" (again, in a mainstream sense).
These are all completely realistic (mainstream) assumptions!
In that case, their total monthly payment would be $867.59. In the first month, $708.33 of that would go to interest, and only $159.26 would go to principal. After the first year, they would have paid $8439.30 in interest and $1971.78 in principal.
On $75K annual gross income, their take-home pay is probably somewhere around $4K/month (wildly guessing because I'm not about to calculate their taxes right now). Remember, their taxes are going to be pretty high because they don't have a large mortgage interest deduction and they're not contributing much of their income to tax-deferred accounts. Really, the only tax deduction they're probably getting beyond the standard deduction is the student loan interest deduction, and that's capped to only reduce AGI by $5000.
They're probably going by the "standard rule of thumb" of paying 30% of their income on housing (and worse, might even be thinking of the rule as 30% of
gross income), which means their rent might be anywhere between $1200/month and $1875/month.
So, $4K - $1200 (being optimistic here) - $867.59 = $1932.41 left, with all expenses sans housing yet to be paid for. Let's assume they have two relatively new financed cars ($300/month each, all in? -- again, optimistic), spend $200/month on assorted telecommunications (cellphone service, internet, cable TV -- still optimistic), $200/month on electricity and other utilities, and $600 on food (groceries plus eating out). That reduces their "discretionary income" to $332.41/month -- and that's the
optimistic scenario! If I had made pessimistic assumptions, they'd have been in the negative before I even got to the food part of the budget.
And "of course" once you add in things like clothes, entertainment, and "little indulgences" even that $332.41 is gone before you have a chance to even think about investing it.
Speaking as a Millennial myself, all of that above is what middle class, college-educated Millennials have been trained to believe is "reasonable." Isn't that scary?
I'm not saying it's smart or (in a mustachian sense) reasonable, but it's entirely plausible that these people genuinely think they can't afford to invest even though they're only paying $2K in student loan principal per year.