Revealed: Millennials Are Not the Lost Generation
For our parents and grandparents, success meant having a good steady job and providing for their family. That's not the case with those born in the 1980s and early '90s. Millennials want to be in charge of their destiny. Working the same job for 30-plus years isn't as attractive as having a career on their own terms, working when and where they're the most productive and having the flexibility to enjoy travel and day-to-day life.
Personal finance community MoneyTips.com, recently released "The Millennial Next Door [Revealed]: How to Be Financially Successful in Your 20's," a free ebook that I was asked to weigh in on. It's based on a survey of more than 500 millennials, nearly 300 of whom self-identified as being comfortable with their current lifestyle.
Survey results gave me the comfort of knowing the next generation isn't the economic catastrophe-in-waiting that the media makes it out to be. True, millennials have racked up $1 trillion in student loan debt to become the most-educated generation in history, but they define success more broadly than their parents' and grandparents' generations, and they've set themselves up to handle their affairs a whole lot differently.
Successful Millennials Are Very Much on the Right Financial Track
Consider some of these results from the survey:
- 96 percent of successful millennials have started saving, with 35 percent accumulating $10,000 to $50,000.
- 50 percent have saved enough to maintain their standard of living for three-plus months.
- 89 percent have some college education, with 71 percent of them paying for some portion of their own tuition.
- An eye-opening 91 percent consider themselves financially literate.
- 34 percent have already calculated what they'll need for retirement.
That's not lazy. And it's certainly not entitled. It's smart.
Enter the Entrepreneurial Generation
Today, 34 percent of successful millennials are employed by large companies, and many are preparing themselves for a future without corporate America. Whether it's a distrust of the system that left their hard-working parents jobless in their later years, or just being part of a generation that has grown up with technology that allows them to be constantly connected, millennials are charting their own career and financial paths. They are self-aware, ambitious and willing to gamble on themselves.
In fact, 67 percent of millennials said they wanted to start their own business, according to a recent Bentley University study. To do that, you have to understand what it really takes to start a business. For example, you might be a very talented graphic designer and a master of your craft, but can you market your services to get new clients? Can you handle bookkeeping and keeping track of invoices and receipts? Can you manage staff accordingly and make sure that they're getting work done and also keeping tabs on payroll? What a lot of people don't realize in starting a business is that you have to wear many hats, and just because you're skilled in one area, doesn't always mean that you'll have a successful and thriving business. Entrepreneurs may be better off by hiring out some tasks.
Millennials recognize that starting early is the most important step to financial success
As a certified financial planner, I always advise younger clients that the most important thing they can do from a savings and investment perspective is to simply get started. Create a plan and start socking money away, using any tool available to automate savings and keep track of their budgets.
By spending less than they earn, millennials are putting themselves in a great position to invest early, giving their money more time to work for them than most in their parent's generation. I can't stress enough the power of compounding growth. It's hard for many people to comprehend that putting in just $100 a month into an investment that can grow at 8 percent to 10 percent compounded annually could grow to be hundreds of thousands of dollars by the time they reach their retirement years.
The fact that 60 percent of successful millennials have less than $15,000 in debt puts them in a great position to start their entrepreneurial careers with a side job. Get a feel for how it's done, putting in the hustle and getting themselves prepared to go out on their own.
Which it seems, is exactly what this generation wants. Kudos to millennials for putting themselves in positive financial situations to accomplish their goals.