A 27-year-old investor posted on Reddit this week with a question that should resonate with anyone under 40 trying to build wealth right now: "What the hell should I be investing in? Everything is so expensive." It's a fair question, and the honest answer is uncomfortable: they're not wrong.

Let's acknowledge the elephant in the room. If you're in your 20s or early 30s, you've entered your prime investing years at a time when valuations are near historic highs. The S&P 500 trades at multiples that make even optimistic analysts squirm. Housing prices are astronomical. Bonds barely keep up with inflation. And everyone keeps telling you to "just keep dollar-cost averaging into index funds" like that's some magic solution.

It's not that the advice is wrong—it's that it ignores the structural challenges this generation faces. High stock valuations mean future returns will likely be lower. Expensive housing eats into savings. Wage growth hasn't kept pace with asset price inflation. And unlike previous generations who bought cheap and rode decades of multiple expansion, younger investors are buying at the top and hoping it keeps going higher.

The Reddit poster mentioned having ETFs in retirement accounts but struggling to find opportunities in a taxable brokerage. They're not alone. When you look at the market through a valuation lens—not a momentum lens—almost everything looks fully priced. Tech stocks that justified high multiples on growth are now mature companies still trading like startups. "Value" stocks aren't actually cheap anymore. Even traditionally defensive sectors have been bid up.

So what's a young investor supposed to do? First, stop pretending this is a normal market environment. It's not. You don't have to force money into expensive assets just because the index keeps going up. Cash earning 5% in a high-yield savings account is a position—and in some cases, it's the smart position.

Second, get comfortable with the idea that building wealth might look different for your generation. Previous generations could buy index funds and ride a 40-year bull market fueled by falling interest rates, expanding valuations, and globalization tailwinds. Those tailwinds are largely tapped out. Future returns will come more from earnings growth and dividends than multiple expansion.

Third, focus on what you can control. Pay off high-interest debt—the Reddit poster mentioned clearing debt by year-end, which is smart. Max out tax-advantaged accounts where you're getting employer matches or tax benefits. Build skills that increase your earning power, because in an expensive world, income growth matters more than investment returns.