Millennials on wealth creation

10 Noteworthy Millennial Takes on Wealth Creation

People born between 1981 and 1996 constitute a significant portion of the world population. Popularly known as millennials, this generation comprises a huge chunk of global consumers and investors, making them hard to overlook. It is probably the first generation that incorporates aspirations, lifestyle choices, and values in their financial decisions. 

They don’t view wealth as a number accumulated in their bank account or numerous investment ownerships on paper. This generation gives more weightage to a whole lot of things such as impact on society, culture of the organizations they invest in, long term growth, societal and environment effects etc. 

If you want to gain deeper and better insights into millennials’ views on wealth creation, the following points will help bring clarity.   

  1. Access to services over ownership

This generation recognizes the importance of establishing financial stability early in life, and it reflects in millennials investing choices. They focus on saving more for retirement without compromising their present-day desires. The hierarchy of needs have shifted from buying to renting. Famously termed as the “Renter generation” a Goldman Sachs report suggests that millennials believe in having access to luxury but without the burden of ownership. A great example is the increasing carpooling across the globe, the increase of  apps offering “pre-loved” stuff- from toys to clothes, from furniture to fashion items.

  1. Early Financial Stability

This generation recognizes the importance of establishing financial stability early in life, and it reflects in millennials investing choices. They focus on saving more for retirement without compromising their present-day desires. Millennials are increasingly focused on building an emergency fund, budgeting, taking side gigs, and reducing debt to secure their financial future without being burdened by debt. Some even resort to frugal living and a conscious spending lifestyle, prioritizing needs over wants to achieve financial stability faster.  

  1. Investment in Cryptocurrency

Millennials have widely different investment preferences than the previous generations, and it shows in their investment choices. While stocks used to be popular investment choices in the past, the young generation of investors is inclined to more alternative investment options, like cryptocurrency. A survey conducted by The Motley Fool echoes similar thoughts. According to the survey, almost 60% of millennial and Gen Z investors own cryptocurrency and/or stocks. But the investment in cryptocurrency is edging out stock investment as the most popular investment choice.  

  1. Investment in Real Estate at back seat 

A Goldman Sachs report suggests that millennials are increasingly looking at staying with their parents because of low employment and low income levels. Although the report highlights that millennials are delaying commitments like home ownership, the market is witnessing mixed reactions. Some millennials still view real estate as a lucrative investment, and are planning to get property ownership. A quick look at the latest Royal LePage 2023 Real Estate Investors report will give you a clear understanding of how millennials in Canada view real estate investment. 

  1. Dependency on Technological Solutions

Millennials are probably the most tech-savvy generation to date. They are digital natives and prefer leveraging technological solutions to optimize their wealth creation plan. It is why robo-advisors, automated investment platforms, etc., are witnessing huge demand. Robo-advisors are harnessing the power of AI to offer personalized investment strategies, rebalance portfolios, and real-time performance tracking. Since using tech-driven solutions provide greater convenience, millennials are more inclined to choose them over traditional options.    

  1. Diversifying Portfolio

This generation understands the importance of diversification; hence, they actively look for better wealth creation options beyond the traditional options. They are ready to explore and invest in assets that have higher upsides and lucrative return potential. Besides investing in stocks, bonds, and EFTs, millennials are also investing in cryptocurrencies to capitalize on the rising digital economy. Real estate crowdfunding, peer-to-peer lending platforms, and ESG-backed funds are other options that they are considering to diversify their portfolio. 

  1. Ensuring Environmentally-Friendly Investing Options

Anyone keeping up with the latest millennials trends would know how much this generation favors environmentally-friendly investing options. It is a part of impact investing that makes it easier for them to contribute positively towards the environment and the world in general. A story published in USA Today, echoes similar notions as it was found that 234 EFTs and mutual funds that invested in socially responsible investments were tracked for governance, environmental, and social factors. Assets in these funds witnessed a huge rise because of the millennial’s rising demand for socially responsible investing.   

  1. Embracing the Entrepreneurial Advantage

Millennials view entrepreneurship as a viable path to creating the desired wealth. Besides wealth creation, millennials are attracted to tap into the entrepreneurial advantage because of the autonomy it provides. It even allows them to pursue their passion, gain better control over their finances, and explore lucrative opportunities. The advent of the fast-evolving gig economy has made it easier for many to embrace entrepreneurial advantage and create wealth faster. Millennials are now leveraging their skills, innovative ideas, and knowledge to create new income streams while enjoying the luxury of being their own boss. 

  1. Picking Investment Options that Help Establish Work-Life Balance

Unlike previous generations, millennials don’t believe in putting all their focus on work and money. They prioritize striking a work-life balance that helps them create wealth without missing out on their desires and living their life to the fullest. Remote work is one option that enables them to earn more while letting them enjoy some ‘me’ time. Some are planning to negotiate flexible work arrangements with their employers, while others are exploring remote work opportunities, starting a small business, etc., that helps them achieve their wealth goals while maintaining a harmonious balance in their personal and work life.  

  1. More Virtual Communication

Active collaboration is at the heart of devising out-of-the-box wealth creation strategies for millennials. While this generation still prefers indulging in meaningful communications with their investment advisor or wealth manager, the way of communication has changed drastically. Millennials aren’t a fan of visiting physical offices to interact one-on-one with their advisors. They rather prefer virtual communication as it is convenient and saves much of their time. In fact, a LivePerson research highlights that approximately 65% of millennials and Gen Z prefer digital communication over in person communication when seeking help or consultation from any business.     

  1. Getting Priorities in Order 

A remarkable aspect noticed in millennial culture is their holistic approach to wealth creation. This generation wants to create wealth for themselves while simultaneously enjoying fun experiences, personal growth, and overall well-being. Their wealth compass doesn’t revolve around money alone. For them, wealth includes their health, growth, money, passion, and values. It is why millennials are increasingly focused on aligning their investment decisions with their values- something that brings them immense happiness and a sense of fulfillment. You can easily find millennials choosing to make balanced investments in the asset class, travel experiences, personal development courses, charities, etc. 

Millennials and Their Unique Approach to Wealth Creation

Millennials make up the largest portion of today’s world population, so it isn’t surprising why the investing and finance world is giving special emphasis to this segment. Their views on money, investment, wealth, etc., matter more as they help create innovative financial products that have a big, ready market. Contrary to the previous generations, millennials have unique priorities and values when it comes to wealth creation. 

Organizations working in the finance and investment sector need to accommodate their notions of wealth creation to design products/services that align with their values and unique needs. The ones that support millennials in their pursuit of financial success while considering their perspectives will continue to thrive and foster stronger relations with this investor segment. Others will have challenging times to even survive in the present and future economy. 

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