Step aside baby boomers and make room for the millennials. Sorry to disappoint, but you are not the only game in town anymore. Now “everyone’s a winner!”
For the longest time we have been hearing a great deal about the impact of the baby boomer generation and their potential to transform the current cultural and economic landscape. What we may have missed is the message that the millennial generation has even more potential to outpace the boomers as an economic force.
The world is home to 1.8 billion millennials, born between the years 1980 and 2000. This generation is 12% bigger than the baby boom generation. You do the math! What kind of an economic impact can you see this generation having? As we look at a potential recovery are they already having an impact? Is your portfolio positioned to take advantage of it?
We know they are different from us. Marketing experts tell us they are:
- Engaged, Inclusive and Tolerant
- Demanding independence, freedom and flexibility in the work force
- Current unemployment is highest among this group
- Born into digital abundance, they are connected
- Personal media, they have the need for speed
- Apple has been their favorite brand, 5 years in a row
- 4 out of 10 were raised by one parent
- They like organic food
What we should be paying attention to regarding millennials:
- Sharing knowledge is power
- Why the privacy concerns? Why not share it or upload it?
- Social capital matters
- They expect to change jobs frequently
- They expect to live their lives while at work
- Renters not buyers
- On course to become the most educated generation
- The most ethnically and racially diverse segment in history
- The least religiously observant
- A pronounced entrepreneurial spirit
There are some truly fascinating aspects of generational dynamics and understanding what makes each generation tick. For example, millennials are ok with commerce but commerce that is lubed with conscience. Just look at the success of such brands as Toms shoes, Ethos water, Lululemon (ok, I admit it, I had to look that one up myself, just so you know it’s a Canadian athletic apparel company!).
The other thing to keep in mind about this group is that they are products of their parents, although I guess that is true for all of us. In a sense they are victims of the so-called “helicopter parents”, or parents that hover. This is also the generation where “everyone is a winner”. Just wait until they realize this is sooooo not true! But being raised this way they thrive on constant praise and frequent feedback. They appreciate structure and stability. Entire industries are emerging to help company CEOs and HR departments figure out how to adapt the work place to accommodate their expectations.
Based on sheer force they could be a force to be reckoned with. This generation, bookended by the .com bubble and the subprime-mortgage meltdown, is more risk averse than their parents. They are also the first generation to be impacted by auto-enrollment. For many company retirement plans the trend is to force people to opt out rather than opt in (auto enrollment) with the hope that more people will participate in the plan. This means that by default more of this generation will be investing in the market especially if we continue to see signs of job growth.
So what does this mean for the financial market place?
We have been engaging with money managers who have positioned their portfolios to take advantage of such technology advances as cloud computing, app development, gorilla glass etc. This type of generational awareness isn’t new. Based on what you are learning about millennials, what do you think will be the next big thing? Money managers including independent investment advisors, portfolio managers, mutual fund managers etc.., should be positioning their portfolios to take advantage of the types of companies that will take the lead with the millennial generation.
Is your manager part of the conversation? If not give us a call at Preferred Financial Strategies, where we help you plan today for the uncertainties of tomorrow. You will be glad you did.