Millennial Investing Trends
Millennials also know as Generation Y are body of people born between the 1980s and early 2000s. It is estimated there are 80 million Millennials, just by the number this is a very significant and important generation. More on the demographics on millennials.
Here are some statistics from an article released from Bank of America / USA today report.
Statistics on Millennials
· 37% of millennials have less than $5000 in savings
· 22% have yet to start saving and more importantly the 18% of the group between 30-34 have not started saving.
· Of those who are both saving and employed, only 18% have an IRA, while 43% have contributed to a 401k.
· 33% have student loans (of those with student loans, only 4 in 10 get help from parents with payments)
· 66% of college graduates say they are in good financial shape, compared to only 30% of non-college grads.
· 37% of millennials in the 18-21 age group still live at home, but the numbers are also high for older millennials too. 26% of those aged 22-25 still live at home and don’t pay rent or expenses. 12% of those aged 26-29 still live at home and don’t pay rent or expenses (is this sounding more like Europe?).
· 59% do not worry about doing more “adult” things, like buying a house or starting a family.
· 86% say that their parents taught them about money.
· 47% wish their parents had started talking to them about money sooner.
· 53% of respondents with a credit card worry about overspending.
· 33% without a credit card say they worry about overspending.
Millennials and their investing trends from an article by published by thecollegeinvestor.com says the following.
Millennials are a different generation when it comes to money and investing compared to prior generations. They grew up in the face of two huge economic events – the tech bubble in 2000-2001 and the housing crisis in 2007-2008. They grew up in a decade of war overseas. And we have been growing up in a world of increasingly polarized news – it’s the news, spun how you want it to be (i.e. liberal vs. conservative). All of these things have us investing in a different way than our parents, and a recent UBS study confirm it.
Beliefs on investing for millennials looks a little like this:
· Conservative and risk averse, holding more cash than previous generations
· Savings and budgeting is what creates wealth, not investing
· Worried about helping parents, whose portfolios have been impacted by market events
· A distrust for TV, online, and social media personalities when it comes to investing and money management
Check out generous first time home buyers programs.
The following excerpt if from a us news money article on real estate trends.
For years, many millennials have postponed homeownership in favor of renting, but that may also change next year as a growing number of Gen Yers start families and seek more stability. “By the end of 2015, millennial buyers will represent the largest group of homebuyers, taking over from Generation X,” the article states. “They prefer smaller units closer to the urban core, so it will be interesting to see whether they follow the time-honored path towards the periphery of the metro.”
Baby boomers are also likely to make a move in 2015. A spokes person from the article says he’s “gotten so many calls from baby boomers recently saying, ‘We’re downsizing, and we’re moving to be closer to our grandkids or our son or daughter.'” With fewer homes underwater, they’re finally in a position to sell.
While mortgage rates may not remain at the historic lows seen recently, more people may qualify for home loans as issues like foreclosures or short sales age out of their credit reports and Freddy Mac and Fannie Mae ease mortgage eligibility. Freddy and Fannie recently announced a new mortgage program for buyers with a down payment as low as 3 percent. “Freddy and Fannie have always been the industry leaders, and they’re saying, ‘It’s OK to lend to people who don’t have 5 percent down. It’s OK to extend credit in a reasonable and safe manner,” the article mentions.