Recent reports indicate that the millennial generation is many things?the last to marry, likely to live with parents for longer than ever before, the least likely to buy a house. They?re more likely to go to college, less likely to use their degrees, and many are without health insurance. While millennials are more educated than previous generations, their financial portfolios certainly aren?t showing it.
And this leaves many young people in a lower income bracket, meaning they?re less likely to make large investments. Reports recently released by Wal-Mart indicate, despite declining unemployment rates, a drop in sales over a three-month time period. The retail giant says that consumers in both older and emerging markets initially reduced spending, but some speculate that the drop in sales reflects less money being spent by younger generations.
The Commerce Department reports a .2 percent increase in sales during the month of July?a good sign for the economy and the future of investing?but a problem that furthers the notion that millennials are lacking in cash. There has been an increase in loans for both vehicles and homes, but those getting approved are far and away part of a much higher income bracket, and we see an overall increase in investments, but a sort of leveling out of age. So while Jason Hartman advises use of borrowed money for investments that will soon pay off, this option is becoming unavailable to young investors.
Part of this stems from the pressing need to pay down debts accumulated during college too?mounting student loan payments and interest rates are eating up much of the income being made by the millennial generation, leaving many questioning the decision to seek higher education at all. A June Gallop poll indicates that households making less than $60,000 (where most millennials fall) are suffering a lack of financial confidence.
For millennials, it is important to maintain healthy finances with the ability to overcome the statistical norm. By paying off high interest student loans quickly and low interest loans slowly, millennials give themselves more liquid assets that can eventually be placed into long-term, money-making property investments. Fortunately, the recent trend toward a sharing-based or cooperative economy make it easier than ever to pay bills while managing to save money for the financial future.
While young people suffer both the stigma and reality of statistics, there is hope?spending money wisely now (on essential items and not unnecessary luxury) ensures a future that is financially sound. (photo credit: Sh4rp_i?via photopin?cc)
The Young Wealth Team