Millennials are the tech-savvy generation with individuals that begin to hit their mid-30s and do almost everything different from the way their parents did, including investing.
This generation gets such a bad reputation among baby boomers and they are often associated with being entitled, self-centered, and lazy. Yet, if you take a look at the bigger picture and actually try to understand this generation better, you’ll see that all those stereotypes couldn’t be more wrong than that.
They might do things differently than previous generations, but Millennials, as a whole generation, include incredibly bright and ambitious people that have no fear to explore innovative ways of doing everything from socializing with their peers to making investments to build wealth. Read on to see how Millennials and the baby boomer investors differ.
Millennials make the most out of the internet
It comes as no surprise that this generation of tech-savvies is responsible for bringing alternative investment methods into the mainstream. Since they do mostly everything different than the baby boomers and constantly rely on technology, they surely prefer alternative online methods over the traditional ones. Millennials are the generation that had access to the internet and electronic devices from very young ages.
So, their passion for technology and connectivity make their entrepreneurial spirit thirsty for success turn to alternative investment methods such as forex trading or the stock market. Having real-time access to an unlimited amount of information empowers them to succeed in the online investing markets by easily copying the trading activity from experienced traders. Certainly, Millennials are more actively investing in such alternative investing methods than the baby boomers. In fact, in the forex trading UK markets, Millennials account for nearly 60 percent of the online traders.
Social impact investing is a priority for millennials
Millennials are so determined to change the apathetic labels assigned to them by their elders that they try to do it in a variety of ways. Young people want their work to matter, and not just in their bank accounts but for everyone.
Millennial generation expresses a deep desire and determination to change the way they live in for good. This resolution of them may come as a result of the constant connectivity young people have that offers them the possibility of being aware of global concerns more than previous generations were.
They have access to the internet and more freedom to travel around the world to see for themselves how our world starts to show the negative impact humanity had on it.
Thus, young investors don’t just look for gaining financial returns for their own financial stability but want to put their investments to work for the public good. According to many studies on how Millennials choose to invest, they invest in organizations that prioritize the greater good more than baby boomers do.
In fact, they even go that far to excluding organizations like banks with histories of misleading customers. The millennial’s tendency toward civic engagement has led to numerous young leaders and entrepreneurs who started or invested in sustainable businesses or charitable projects.
Retirement saving comes in the second place, after building wealth
With so many opportunities and experiences to explore, it comes as no surprise that retirement saving isn’t quite the top priority of Millennial investors. They, in fact, show a tendency for being incredibly focused on building wealth by the time they reach their 30’s and generally start saving for retirement at around the age of 36. When they are in their 20’s, retirement seems way too far away for them so investing in something that is nearly 40 years away in the future isn’t their priority. Yet, for the generation of baby boomers, retirement saving was one of their top financial goals.
So, what changed? To understand this difference between baby boomers and Millennials, you must understand that compared to their parents, Millennials are more wealth-focused. Back in the days, baby boomers perceived financial success as keeping a job for their entire lifetime, climbing the corporate ladder, and saving a good amount of money for the retirement years.
Yet, young people have a completely different perspective that also influences their investing decisions. For Millennials, success isn’t only about earning a decent wage that allows them to put some money aside for the future but rather about becoming their own bosses and building their dream business as the leaders they look up to have done.
Young investors are more cautious with their money
Millennial investors show a tendency for being more cautious with their money and wanting to make more informed decisions. Mainly the access to the internet is an important contributor to the skepticism of those young investors. All young people rely on technology to find the best ways to do everything from eating at a local restaurant to purchasing a new product.
They are researchers by nature and always educate themselves on every topic before making an important decision. Also, compared with the business world in which baby boomer investors started investing their money, young people are experiencing today’s fast-changing world that makes them feel more uncertainty.
Today, market trends, consumer behavior, currency values, and political situations can change from good to bad within seconds. Thus, Millennials tend to put the risk in perspective more than previous generations did when it comes to their money.
Millennials listen to wiser experts
Another difference between those two generations is the fact that young entrepreneurs associate value with experience. Baby boomers in their youth tended to not trust older people when it came to advises. Yet, despite their free spirit and thirst for innovative ideas, Millennials do perceive informed people with a few grey hairs as wiser experts that they listen to such as their parents, teachers, and experienced financial professionals. In fact, they might get more inspired to save and invest more money if the idea comes as a recommendation from an experienced adviser.