How Millenials Are Changing the Economy

by Vincent King · 5 comments


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? 

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{ read the comments below or add one }

  • J.Mesina says:

    Thank You so much for writing. We millennials are all about the front game, and wanting to prove ourselves to the rest of the world. Let’s face it, this world is getting smaller by the minute. Anyway, I wanted to get a personal opinion on my situation.
    I recently started a consulting firm with my boyfriend, about 1 year ago, and it’s been doing pretty well. Unfortunately, the success is getting into our heads, mainly because we have major differences into where to allocate our budget. It’s completely frustrating!
    Some friends are telling me that it’s just a minor thing, since the website is been doing really well, but I don’t want to risk our relationship over a business. Other friends suggest a third party CFO consultant. What say you? Am I being a baby, or is an unbiased third party CFO worth looking into? We’re kind of having a clash at the millennials sort of thing happening.

    Thanks for writing and the insight!

    From: A Financial Dummy with weak constitutions for ties.

    • Grinch says:

      J, I recommend you use the website. You can find a mentor there to help you and your boyfriend make wise business decisions. You will at least have a list of questions that you can work together to answer. And you can’t beat the price! Just be advised that most of the people that volunteer for SCORE are retired boomers…

  • Simon says:

    Millineals also seem more optimistic of their lives and their futures despite the politics and economics of the day. They are go-getters with a knack for challenging status-quos and long held beliefs. They are going out there and finding solutions to sticky problems and aren’t afraid of failing because they keep on learning! I agree with Brian up here, they haven’t seen the best of us yet!

  • Bryan says:

    The biggest difference I see is the millenials and the boomers definition of success. Boomers thought the big house, nice car, fancy job was the life. Millenials definition of success I’m seeing is more introspective–am I happy with what I’m doing? Am I making an impact? This generation due to technology is more worldly focused, boomers didn’t have to worry about chinas economy or indians but millenials have an awareness that is unprecendented. This generation is not only going to save the US but will change the world and we’re just getting started.

  • Ruben says:

    I’m 34 (which barely makes me a millenial by the definition above), and I think 2 messages that seem to be communicated to my circle of friends are that pensions no longer exist in most places (true for me), and social security might not pay us as much as it does for the boomers (adjusted for inflation). Since retirement is supposed to be a ‘3 legged stool’ of pension, social security, and personal savings, by default we’re only left to concentrate on personal savings since the other 2 are either uncertain or nonexistent.

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