A Millennial’s Perception of Wealth

Those of us who were born between 1980 and 2000 (including myself), are classified as being Millennials. We Millennials started coming of age during the global financial crisis in 2008, which pushed us into the Great Recession.

Like previous generations, major international events like WW2 shaped the Greatest Generation, and the after-effects shaped the Boomer Generation. Boomer parents of Millennials’ perceptions of wealth, which grew out of a post-war America, focused on rebuilding and reinstalling soldiers returning from war. Boomers were/are focused on building wealth and their businesses. The idea of being a company man or a workaholic came into existence.

But as was the case in the 1960s, when generation gaps were widely seen, Millennials are seeing the same type of gap in how they work and perceive wealth and its accumulation.

Now don’t misunderstand. Millennials are still are driven to accumulate wealth, but not in the same way. By growing up with technology and Google, information comes very quickly. So instant gratification is something that is not only desired but expected. This does play to their detriment regarding investing and retirement growth. With the rise of Cryptocurrency, meme stock trading, and online platform investments in everything from real estate to personal loans, many Millennials get caught up in the instant gratification of the online process and the hype generated by the new technology. While this isn’t limited to just Millennials, every generation can get pulled in, but a case could be made that Millennials helped create these options.

At the same time, older generations were more focused on saving for different goals, i.e., marriage, a house, kids, and retirement. Millennials focus more on near-term goals like funding their lifestyle. Millennials are more likely to spend more and save less because they feel more confident in future earnings. (Think student loan debt.) But Millennials are also more likely to tap their parents if needed.

Millennials also have a very different view of their working careers. Their parents were more focused on finding a promising career and then climbing the ladder or building a business that would be in the family for generations. Company men/women and workaholics are not terms that are being used for the Millennial generation. They focus more on work/life balance and ample time doing what they enjoy. Technology, however, has made it so that work/life is now more intertwined than ever, so many are always available to work. (Remote work, cloud-based systems, etc.) Millennials also see success less as earning a good wage and more as admiring the entrepreneurial spirit in building their own business, selling that business, and starting again. Even in the family business, they want to run the family business but build side projects as well.

So how does all this set up Millennials for the future? Many Millennials are looking to their parents to pass on wealth to help jump-start them on the path they would like to go. In the US, we have seen a big jump in parents of Millennials pulling cash out of their homes to help purchase a home for their children or pulling funds from retirement savings to finance business ideas or goals, and parents helping finance their children well into adulthood. While some of this is tagged as Millennial behavior in the media, the Boomer Generation has been the one that has provided the avenue for it to take root. Either because of their ability to or felt the need to, it has been a generation-wide event that has affected both generations.

Knowing the way generations function and interact with one another is beneficial. It is also helpful for Millennials to understand what their generation is pushing them towards as a group and be able to look at it from a bird’s eye view, and then develop your strategy to take advantage of the opportunities being created. While saving for the future isn’t a natural effect for the Millennial generation, it is still needed. If parents are building wealth to pass on, that is excellent, but for many, that wealth may be much less than expected, with retirements lasting much longer than before and inflation continuing to rise. Many in the Boomer Generation aren’t prepared for retirement either, which will eat into the estimate future wealth many Millennials might be expecting.