What do millennials want & look out for in life and work?
Millennials have been portrayed as the lost generation in the media. They do not have jobs. If they do, their income is lower than that of their parents at the same age. They are less likely to own a home. And they have failed to save enough for retirement.
While the millennial retirement outlook is getting brighter, many millennials still have lifestyle expectations that are beyond their earnings and savings power. Here is what millennials want:
Millennials Want #1: Work-Life Balance
This generation does not envision stepping aside from the working world at the age of 65 and travelling. Millennials are interested in seeing the world today while working. Maintaining a lifestyle that combines work and travel, as well as time for family, is important to them. They expect to maintain this lifestyle into their 70s and 80s, working well past traditional retirement ages. They are taking longevity risk seriously - the risk of outliving their savings - but may not envision ever taking traditional retirement.
Either way, they expect to maintain higher consumption patterns well into their 80s. All tallied, millennials need to save more to fund their retirement savings and planned lifestyle in old age. The reality is, most have less in retirement savings than their parents at the same age. The millennials are looking for higher returns from their investment portfolios to fund this gap.
Millennials Want #2 : Entrepreneurial Lifestyle
The iPad generation is often mischaracterized as being selfish. Technology has empowered millennials and allowed them to do more for themselves and others. They can make change in the world from a computer. Online courses allow them to brush up on an area of interest within weeks. Business plans can be developed collaboratively online. And financing for any endeavour - from a new business to a volunteer project - can be sourced through online crowdfunding sites.
The millennial seeks investment options that will allow them to build new ideas, concepts and businesses today. Some view their lower income compared to that of past generations as part of their investment in this future they are co-creating with a business partner, spouse, or social entrepreneur.
Millennials Want #3 : More Investment Independence
Most millennials are receiving investment advice from their friends and acquaintances on Facebook. They are also sharing news, advice and opinions. More informed about investment options, they seek guidance and to fill information gaps but ultimately want to make their own investment decisions. The digital generation seeks transparency in investment transactions. Millennials trade online and understand how much investment services cost. They know exactly how much they paid for a stock or foreign exchange trade. Hidden investment fees are harder to pass on to these more astute investors.
Wealthier millennials are more interested in working with an advisor, according to TD Ameritrade. Sixty five per cent of high net worth millennials, those with over $500,000 in assets, work with an investment advisor versus 40 per cent of those with assets below $500,000.
Millennials Want #4 : Higher Investment Returns
Millennials face a different retirement future than baby boomers. They have lower income and more debt than their parents. They are relying on 'smart investments' above income to fund their retirement savings. The pressure of mass affluent millennials to increase the value of their investments is evident by their expectations.
About 36 per cent place high returns at the top of the list of what they expect from investment advisors, while 24 per cent of high net worth millennials are seeking returns as their first objective, according to TD Ameritrade. High net worth individuals place more emphasis on having a wider choice of investment options.
Millennials Want #5 : To Influence Positive Change in the World
Millennials are ethical investors. They are investing in installing solar panels on their homes and stocks with an ethical investment agenda. They will choose the wind-powered Internet service provider over less expensive competitors. This socially conscious cohort is interested in building social enterprises.
Millennials do not consider making money and doing good as mutually exclusive endeavours.
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