What Do Millennials Really Want? Not What You Think…
Millennials: overly sensitive snowflakes, keen to find offence, work-shy, vain, shallow, self-obsessed spend thrifts …well, at least according to The Daily Mail.
Many are undoubtedly quick to criticise millennials especially when it comes to looking after money and planning their financial future. But contrary to popular perceptions, recent research has portrayed millennials in a brand-new light. In fact, they are becoming one of the most important demographics for financial and investment industries. So, why is this generation such an important part of today’s financial landscape?
Having grown up in the digital age, they are digital natives, and as such, are naturally confident when it comes to using all the latest technology and gizmos at their disposal. Because they came of age during the recession, they aren’t quick to trust the financial industry and financial professionals. They also carry more debt and have relatively lower incomes than previous generations.Their parents come from ‘baby boomers’ and ‘Gen X’ers’. Together, these two generations will leave a combined total of (roundabout) 30 trillion pounds to their children over the next few decades. This is a heck of a lot of money in anybody’s opinion and it’s no wonder the wealth management industry, banks and other financial companies are trying their best to woo this increasingly important generation.
The Current Landscape
Figures published by the Office for National Statistics show that numbers for home ownership for those aged between 22-29 has dropped quite a lot in the last 11 years. In fact, a recent 10% drop has left the figure at just 27%. The number of millennials that have any form of savings at all dropped from 59% to just 47%. Yikes.
A combination of factors including the constant rise of inflation, general cost of living and lower wages means the things that were taken for granted by previous generations have had to be sacrificed. This being the case, more and more millennials are now turning to investing as a means of building up their capital stockpiles and getting their finances back on track.
These days, only 3% of millennials expect to retire before the reach the age of 50 – a large number don’t even see retirement as a viable reality! They have comparably modest goals and are far less interested in chasing a gold-plated retirement than other generations. Instead, they are much more concerned with their immediate future and not living from pay cheque to pay cheque. With lower wages and higher debt than their parents, it’s hardly surprising! Rather than further the myth of always chasing instant gratification, millennials are actually far more reserved with their financial ambitions. Still need convincing? Recent research conducted by Facebook via a number of polls has provided an invaluable insight as to how the millennial market operates.
According to their research, it’s not robo-advice, cryptocurrencies, or massively inflated returns that’s turning their heads, but rather interestingly, its engaging and otherwise informative content. Younger people want financial educators. They know that there’s a gap in their knowledge and want credible advisers to help them fill in these financial gaps.
What Millennials Want
Their needs are far different to those generations that came before them. As we’ve already established, your average member of Gen Y aspires for security rather than wealth. But in addition to wanting to live ‘comfortably’, younger people are displaying a desire to be more socially responsible than those before them.
More so than ever, today’s young investors are concerned about their investments having a positive impact upon the world they live in. 86% of millennial investors are more interested in the concept of sustainable investing, whereby investors wish to not only make a profit but make the world a better place. These industries at one point were thought to be less profitable than other traditional methods of investing, but these days, the tables have turned. Companies that are looking to embrace low carbon technology or place an emphasis on reducing carbon emissions are essentially future-proof. This becomes even more pertinent when the issues become even more pressing and important.
So, what’s the solution?
In the case of your everyday millennial, being able to afford luxuries like a car or house are not only aspirational but quite often out of reach. The good news is it doesn’t have to be this way. Where there is a will, there is a way! It’s all about playing the long game. By prioritising your spending and aligning your finances to suit your overall monetary goals, you could actually end up saving a significant amount of money. In this scenario you could then either A) stockpile your money or better yet B) invest! When you invest you earn interest on your original investment, and when you earn interest you earn more money. With a little bit of patience and a dash of good fortune, the returns you earn from your investments could soon start to pay for the things you want. As investing tycoon Warren Buffet once said “Someone’s sitting in the shade today because someone planted a tree a long time ago.”