Gen X and Millennial Investors: Key Differences

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By Joe Globensky, RFC®

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You’ve probably heard the terms Gen X and Millennial, but may not be exactly sure what ages they refer to.  As I was conducting research for this article I found there is confusion even among the “experts” as to who should be included in these generational groups.

For the purpose of this post, we will use Gen X for those born between 1965 – 1979, which makes them 40 – 54 years old.  Along with 81,999,999 other people, I am included in this generational powerhouse.  Millennials, occasionally referred to as Gen Y, were born between 1980 – 1994, making them 25 – 39 years old.  And, because the Millennial generation spans milestones from early adulthood to house and family, this could even be split into two sub-categories.  This might make more sense when we delve into the differences in how they might invest.

Generation X Investors

As Gen Xers, we are now in our prime earning years.  Some may be in their prime spending years too, as they help pay for college and possibly the weddings of their children.  And, as part of the “sandwich generation,” they may be helping their parents financially as well.

But it should also be our prime saving and investing years.  According to a Deloitte study, Gen X investors are projected to nearly quadruple their assets to $22 trillion by 2030.  We tend to be more emotional in our investing habits.  And, why not?  While we may remember how our parents benefitted from the huge stock market gains of the 1990s, we may personally remember the technology stock carnage of the early 2000s.  And we experienced firsthand the 2008 financial crisis.

These market swings have made us skeptical, self-reliant, and prone to make emotional investing decisions.  Sometimes to the detriment of our long-term plan.

Millennial Investors

Millennials have the potential to become the wealthiest generation in history.  The transfer of wealth from parents and grandparents will be staggering.  But Millennials are also the most hesitant to invest in the stock market.  Why?

As early Millennials graduated from college and began taking on financial responsibilities, along came the Great Recession.  A decade later and Millennials are carrying an average $36,000 in debt, primarily from student loans and credit cards.  And less than half say they have a good grasp on how much they can spend versus how much they should save for the future.  Our recent blog post may help.

The economic skittishness caused by the Great Recession has Millennials suspicious of traditional investing.  They are clearly more pessimistic about investing.  And, that may be the financial industry’s fault.  77% of Millennials believe it’s just a matter of time before the bad behavior of the financial industry leads to another economic crisis.1

Millennials also have a high level of risk intolerance.  According to a recent Bankrate survey, they prefer cash investments over investing in the stock market.  And with current interest rates low, and possibly heading lower, this could end up costing them millions.

A well-trained financial advisor who can help with the emotions, be objective towards your goals, and educate and empower you along the way, can help make planning for your future much more comfortable.  If you would like to speak with one of our financial advisors, reach out today.  Your introductory meeting comes with no obligation and no fee.


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