The Millennial Trajectory by Lazaro Dinh

The world is hard on Millennials. This generation (who were born anytime from the 1981 to 1996) have taken slack for everything from avocado toast to the death of retail stores. No matter what you want to say about them, there’s no disputing how much influence they have on the economy. They are working longer hours, taking on more debt, and rapidly changing the face of the workplace. Here’s a look at 6 ways the investment and spending patterns of millennials are unique.

They spend huge amounts on health care

In our parent’s generation, getting healthcare was pretty clear-cut. For the most part, good jobs equaled good benefits. In comparison, most millennials don’t even have doctor even though they spend almost twice as much on healthcare as their parents or grandparents did at the same age, according to a report from the Federal Reserve.

They like to job hunt

According to the The 2018 Deloitte Millennial Survey 43% of Millennials plan to leave or quit their current positions in the next 24 months and only 28% want to stay beyond five years. Even if switching jobs gets them a bigger salary, there are often hidden costs, including changing retirement plans. Even small changes in benefits can come at a huge cost. Consider this: a $100,000 annual salary with a 3% employer match equates to $3,000 in annual in extra retirement money. That adds up over a lifetime.

They like investing using technology

When millennials invest, they are more likely than their older counterparts to use apps and other financial technology. In the past decade, a number of mobile investment solutions have hit the market (think Stash, Robin Hood and Acorns) that make the process simple and cut out typical financial advisors. These apps also make it easy to choose low-risk investments — Millennials are most likely to invest in index mutual funds.

Debt is stopping them from making larger investments

According to StudentLoanHero.com, 69% of 2018 college graduates students took out student loans, and graduated with an average debt of $29,800. Much of this is due to the cost of college, which nearly doubled in a single generation. This debt is leaving many millennials locked out of home ownership or other major investments.

They give more

Millennials are changing the face of philanthropy. They are deeply involved in social, political, and other non-profit causes. They put their money where their mouth is too — even though they have less to spend than previous generations, 84% of millennial employees gave to charity and 70 percent donated at least an hour to a charitable cause in 2015, according to the Case Foundation’s Millennial Impact Report: 2015.

They haven’t saved for a Rainy day

A new survey from LendingTree found 60% of self-reported millennials do not have a $1,000 emergency expense fund. In an emergency (medical or otherwise) they are turning to crowdfunding websites like GoFundMe to try and raise money from friends and family. They are also putting emergency costs on credit cards, borrowing from high-interest online loan providers, and asking their parents for help.

Most of them rent and are scared about buying a home

Buying a home is today’s day can be an easy process. One that would be a wise one for Millennials. The problem is that Millennials have very little guidance to the process of owning their first home or investment property. With today’s rates and government programs geared to making owning a home inexpensive, Millennials lack the guidance needed to make the step and are missing out on a great opportunity to grow wealth early in life.

The Millennial trajectory

Their dollar might not be worth as much as their parents or grandparents, but Millennials don’t have it all bad. They are happier at work, and have more economic mobility than any generation in the past century. Keep an eye out on these 20 and 30-somethings — in a decade, they’ll be the ones ruling the economic roost.

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