Sheldon Cooper/SOPA Images/LightRocket via Getty Images
- David McWilliams says Gen Z and millennials must master money in a system "rigged" against them.The ex-central banker advises focusing on income, interest rates, and discipline.He says money is imaginary, but understanding it can help young people beat the market.
Economist and former central banker David McWilliams doesn't mince words about the world younger generations have inherited.
"What you have here in the United States is a system rigged against the average person," he said on the "That One Time with Adam Metwally" podcast on Tuesday.
The issue is particularly acute among those starting out without wealth or time on their side.
He said that Generation X and baby boomers have committed "a societal crime" against Gen Z and millennials by breaking the housing-led path to social mobility that once allowed ordinary people to build wealth.
That shift, he said, has left younger generations forced to "embrace risk" rather than rely on the job security and affordable homes their parents enjoyed.
Still, McWilliams said the system can be mastered — if you understand its rules.
"The biggest myth," he said, "is that money is real. It's entirely imaginary."
What's real, he said, are interest rates, income, and discipline, and those who master them can quietly get ahead.
Here are McWilliams' five rules for getting ahead in a system that feels stacked against you:
Learn how to invest and make income your obsession
McWilliams' first rule is simple: learn how to invest properly.
"You've got to find a stock that has not just a good story, but a really strong income because income is the key," he said. "Money in your hand is no use to you unless it generates more money in the future."
He urged young investors to look for companies that actually make money, not just promise it.
"Forget all the rest of the noise," he said. "Understand one sector, become very good at that."
Understand interest rates, the most important force in finance
McWilliams called interest rates "the price of money" — and said failing to understand them is how people get crushed financially.
"If you don't understand interest rates, you'll end up getting crushed," he said. "Poor people pay higher interest rates than rich people."
He added: "The poorer you are, the higher the rate of interest, the more you get screwed."
He said young people need to see how small changes in interest rates can have huge effects on asset prices and wealth creation.
"Once you conceptualize that the cost of money is the crucial foundational cost in society," he said, "then I think lots of things make sense."
As of October 2025, the US federal funds rate is 4%-4.25%, pushing up borrowing costs on mortgages, credit cards, and business loans.
Trump has openly clashed with the Fed to bring rates down, and many forecasters, including those from Bank of America and JPMorgan, expect the next Fed meeting on October 28 and 29 to lower rates.
That level is modest by historical standards but still elevated compared with the near-zero rates the Fed set in 2020 to support the economic recovery from the COVID pandemic.
Know when you're lucky
"One of the greatest mistakes you can make in finance is falling in love with your own success, if it goes well," McWilliams said.
He believes luck can play a large role in wealth creation.
"Sometimes you're just in the right place at the right time with the right strategy — and it's luck."
But recognizing when success comes from luck alone prevents arrogance from clouding judgment.
"Confidence is something that is incredibly destructive because confidence probably results in us underappreciating risk and in some way getting rid of our cautionary nature," he said.
"The more confident you are, the less likely you can discount the possibility of failure."
Know when you're unlucky and when it's your fault
McWilliams also cautioned against blaming bad outcomes on fate.
"What we tend to do in life is the stupid decisions we make we discount as being unlucky," he said. "But the question is — why did you do it?"
There's a difference between being unlucky and being foolish.
"You have a certain amount of randomness in the world, and that is one of the whole points of investing — to understand that there is randomness and you cannot forecast everything," he said.
"But in many, many cases, it's us who make the bad decisions."
Go deep, not wide
McWilliams' final rule is about focus — and tuning out the noise.
"Decide you're going to actually focus your mind on one sector," he said. "Spend the time to chill out, relax, and understand one sector and become very good at that — and forget all the rest of the noise."
He warned that spreading yourself too thin only leads to confusion and bad decisions.
For McWilliams, depth creates calm and confidence in a chaotic market. "It's a very nice psychological place to be," he said.
