Jane has always wanted to see Aruba. She wants Robert to take her there to celebrate his late retirement. But Robert’s head is pounding from an unrelenting fear: they won’t have enough money to spare from their savings.
Fifty-six years (give or take a decade) working for a company, and you’d think there’d be a comfortable package waiting for him, but this year, Robert’s company is sinking and the funds aren’t there for him, or his retiring colleagues.
Now that Robert’s account is thinning faster than he thought it would, Robert isn’t loving — or even really enjoying — his retirement in the way he expected.
This didn’t happen only to Robert, though; Boomers across the country are struggling with financial shortages because most didn’t start saving until the average age of 35. Couple those late saving attempts with common mistakes, like purchasing cars and homes priced beyond their means, and well, you get the picture. So does Robert.
The Rise of the Millenials
Millenials, often touted as today’s “lazy” generation because they’ve camped out in their parents’ basements far longer than the Boomers did, have the power to flip the economy from which their predecessors are suffering. Millenials are already proving to be more financially savvy than their Boomer colleagues. The 16-34 year olds are showing signs of hustle and flow in the financial markets, as well as an understanding of the fundamental need to start saving early.
This newer generation is taking their success to the financial streets — turning more profits and savings than the Boomer advisers before them.
Millenial financial advisers are earning $8M more than Boomers. They’re earning three times more client referrals than the older guys. And they have 60% more assets to manage. Not sounding much like a “lazy” generation at all.
How Are They Doing It?
What’s the deal with Millenials, and why are they more successful than Boomers? It’s because they hustle. Millenials are not only financially savvy; they are digitally astute, working social networks like celebrities and shifting the marketing landscape from push to pull.
They pull in the business because they take part in social media, run their blogs, and use new forms of technology that ING and Merrill Lynch struggle to master. This new agenda is paying off for them BIG when it comes to careers.
This new horizon is changing lives and breeding entrepreneurs. That spirit is revitalizing the economy in its own way, too. But, what’s triggered the Millenial shift away from what Boomers used to do?
They Watched and Learned
As this latest generation watched the Boomers struggle, they learned that they couldn’t make the same mistakes — and they started saving early. On average, the Millenials start saving at 24. And while they invest in their beloved gadgets, they tend to take a minimalist stance in other areas of their lives.
Because of their stance on “stuff,” they spend more on apps, self-help downloads, and education than they do on cars or houses. This generation has shown a slow-down in debt accumulation (unlike Boomers), and is experiencing less financial stress and psychological strain.
Thus, they are called the Happy generation.
What Does All of This Mean?
With Millenials’ spending and saving habits shifting from the current Boomers’ car and home buying patterns, the economic landscape could be changing for the better.
Using their tech wisdom and eco-consciousness, this generation is not only earning more money, but they’re smarter about where and how they spend it. They share living spaces and cars rather than buying their own. This smart thinking is leading to a re-urbanization of the population.
And since Millenials are keen on re-urbanization, the generation is moving toward doubling the sizes of established cities. With that doubling of population comes the doubling of productivity. This is a big win for the economy, especially since they’re digging into sharing (think ZipCar and Airbnb) more than owning, and education more than material goods.
In short, the Millenials’ lifestyle habits of sharing (not owning), digital goods over materials goods, and city-centered living could shift the economy for the better. Only time will tell.
What do you think is the biggest difference between the Millenials and the Boomers?