So, David Chen, a millennial who writes about millennials wrote me the other day, wanting to do a guest post here on some tips about investing for millennials. Everyone knows I’m a retired old geezer, so to humor me he wrote not one, but two posts, the first one answering the (to me, anyway) puzzling question: exactly what is a millennial? Tomorrow, he’ll tell us what those folks should do. Enjoy!
It can be tricky to really nail down what defines the Millennial Generation. Most researchers and statisticians tend to define a millennial as someone born between the years 1981 and 1997. Others would rather use “early 1980s” as a fuzzy starting point leading anywhere up to the early 2000s. One thing is consistent enough without the dates, millennials are generally thought of as the generation that succeeded “Generation X,” that generation of the children of the Baby Boomers. Whatever the span or timeline used, we are the most talked-about, studied generation in recent history given the technology at everyone’s disposal. We are the most mobile and connected—far more so than our parents’ generation, and vastly more so than the generations before them.
Millennials are often talked about as “lazy,” “entitled,” and as if our entire generation wants to have everything handed to it on a silver platter. Perhaps it’s because we aren’t happy with status quos. After all, millennials are just on the cusp of taking over the workforce—roughly a third of all U.S. workers are from our generation now—and we may seem far less likely than previous generations to be happy with working “the grind.” Instead, we want to be entrepreneurs and inventors. We want our products and services to have social aspects. We want groceries delivered, and we want to outsource our tasks and often ourselves as well. In an increasingly mobile and connected world, is it any wonder that we are also an increasingly mobile and connected generation?
We are also a generation that is finding work in non-traditional ways. Sometimes it seems that everyone’s ultimate dream is starting an elusive passive-income company then traveling the world while the money rolls in. The funny thing is, there are actually many of us making that dream into a reality. Travel abroad enough and you are guaranteed to run into Americans and ex-pats around the world who are making money from abroad, just managing their passive income. Some are even making thousands of dollars a month off of their travel blogs or Instagram accounts. Generations before us dreamed of climbing the corporate ladder, but our generation has turned the more conventional notion of success on its head in many ways. We, as a generation, may just want more things out of life (at any rate, the lives that we perceive as possible with all this new stuff).
For instance, our generation loves to travel as much as any other generation, but luckily for us, travel is easier than it was for our parents and their parents. Catching an Uber is easier than catching a taxi cab. Who wants to stand on the side of the road when you can arrange your ride half an hour ahead of time for half the cost? Hotels are out and Airbnb is in (and a bit cheaper). On top of all of this (and quite possibly a significant driving factor), it’s all documented on Instagram, Twitter, and Facebook because we’re the social media generation after all. Everyone gets to see and experience a part of what many perceive as the sweet life, and everyone wants to hop in on the fun.
Being a millennial means facing unique money challenges. For starters, our generation faces massive student loan debt that our parents and their parents never had to contend with. Tuition has skyrocketed in the last two decades, and so has the debt that students take on in order to chase their degrees. In fact, many financial experts say that the student loan problem is so bad, our generation is crippled by this particular form of debt. The average cost of a year’s tuition at a four-year college is now around $30,000. In 1980, around the time many of our parents were in college, the average cost of tuition was less than $10,000. It’s no wonder that millennials often self-report that their student loan debt means they put off major financial commitments including starting a business of their own, getting married, and starting a family. While earlier generations often make fun of millennials living longer at home with their parents, an obvious root cause of this—sky-high debt from student loans—is often brushed aside.
Unfortunately, the degrees we’re buying with all that student debt are worth less than they were in earlier generations, so we’re hit with a double whammy. Gone are the days that a high school diploma put you in a stable job where you could earn enough to pay a mortgage and raise a family on just one income, not to mention save for retirement. Yesterday’s high school diploma is today’s four-year university diploma, but the latter costs much, much more. Maybe student debt and the lacking labor market are other driving factors that are fueling our need to break the mold and live very different work lives than generations before us.
Despite these challenges, our generation is doing amazing things and some pretty dumb things. We’re changing the world for the better through our entrepreneurial spirit and innovative way of tackling society’s problems, but maybe we aren’t helping so much with bouts of social media outrage and discontent. Needless to say, we, as a generation, are fueling social progress in unprecedented ways.
But then again, what is so different about that? If one thing is certain, time brings changes both subtle and conspicuous. It brings different challenges and solutions. And generations are defined by these differences from the past. With that in mind, I’d like to think that we’re just like any other generation. Jamming into our ambiguous mold, molding it further to be set in stone just a generation later.
Yes, we are different, but that might not be so unusual.
In fact, I’d call it natural.
Dave Chen writes for his own blog, Millennial Personal Finance, which he got his hands on after graduating college. He spends his spare time putting some effort into this blog in the hopes that some people will take notice and learn a few things.