Financial Accomplishments – The Millennial Generation
There is a lot of evidence that suggests that are facing unique challenges that older generations never had to encounter, as it relates to finances. With this backdrop, it’s easy to see that Millennials have actually accomplished quite a lot despite having to navigate the 2008 financial crisis, as well as overcoming a reputation for being notoriously bad savers.
Let's take a look at the facts:
- Roughly than one in three Millennials own a home. While this is still lower than the national average, about 40.2% of Millennials are now homeowners. This becomes even more impressive given all the headwinds facing Millennials, such as high housing costs, overwhelming student loan debt, and stagnant wages. In fact, many experts agree that the first increase of ownership since before the Great Recession is due to the recent increase in Millennial homeownership.
- Millennials are hitting their savings goals. Despite being known as unable to save money and wasteful with their money, studies show that Millennials are actually excelling at wealth management. A 2020 report by Bank of America revealed that nearly three in four Millennials are saving and that 24% of Millennials surveyed have saved $100,000 or more. Furthermore, their findings showed that Millennials are starting to save for retirement earlier than previous generations, with most Millennials starting around the age of 24.
Millennials aren’t afraid to ask for raises, and they often get them. In the same survey done by Bank of America, it was reported that 46% of Millennials have asked for a raise at some point in the last two years and that 80% of them received the requested higher pay. In comparison, Baby Boomers, Gen Xers, and other generations have lagged behind when it comes to asking for more money.
Millennials have made investing cheaper and easier. Once upon a time, investing was exclusively for the elite and could only happen through a stockbroker who charged outrageously high commissions on your investments. Since Millennials have begun investing, however, the cost of investing has come down. This is because index funds with super-low expense ratios have completely revolutionized investing. Additionally,
Additionally, Millennials are responsible for the invention and explosion of smartphone apps, as well as for the surge in new services such as robo advisors or account aggregators. These have all provided new ways to manage stock investments by making it even easier to buy even fractional shares of stock.
The Millennial generation is 72.1 million strong, larger than the current Baby Boomer population. While there are clear generational differences in each approach to personal finance, savings, and investing strategies, it is clear that this younger generation is finding success.
If you count yourself among this generation, know that a comprehensive financial plan can help you determine a wealth strategy, make smart decisions with your money, and prepare you for retirement, or whatever the future may bring. If you’re ready to speak with a financial advisor about your next best step, the Arcadia team would love to hear from you.
Tags: wealth management, investments