A Wharton professor says late boomers and Gen X will take center stage over millennials by 2030 — here's why we should be paying attention to them
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Today, the world's 2.3 billion millennials — those born between 1980 and 2000 — are the focus of the world's attention. Their minds, wallets, and votes — companies and politicians want them all. According to Morgan Stanley, millennials are currently "the most important age range for economic activity," because they'll start families, have babies, and spend money to settle down in life.
This is a misconception. For starters, millennials are no different from previous generations in their heterogeneity. People in this age range come in many different shapes and sizes. Some are highly educated; others are not. Some are rich; others struggle to make ends meet. Some are consumer narcissists; others abhor commercialism. The media loves to generalize their attitudes or behavior, often in sensationalist ways: "Millennials are killing the dinner date." "Millennials have officially ruined brunch." "Millennials are killing the beer industry with their rosé obsession." "Millennials are killing the napkin industry." "Millennials are killing the movie business." "Will millennials kill home ownership?" "Why aren't millennials having sex?" But there's another, far more fundamental reason that the fuss around millennials is overblown. Contrary to conventional wisdom, millennials are not the fastest-growing market segment in the world. In fact, the fastest-growing segment, by age, may surprise you. They've often been neglected by companies, but they are courted by politicians (because they are more likely to vote), and they happen to own at least half of the net worth globally — around 80% in the United States. They're the population above the age of 60, and by 2030 the world will have 400 million more of them, mostly in Europe, North America, and China. In the United States, this age group includes both the baby boomers and the Silent Generation (those who grew up during the Depression and either lived through or fought during World War II; Tom Brokaw called them the "Greatest Generation"). The American historian Neil Howe, writing in Forbes, notes that "the relative affluence of today's elderly is historically unprecedented." Howe knows a thing or two about the topic: He coined the term "millennial." Federal Reserve data indicate that members of "the Silent [Generation] hold roughly 1.3 times the amount of wealth as Boomers, more than twice that of [Gen] Xers, and 23 times that of Millennials." According to Howe, "Marketers are attracted to [Boomers'] newfound spending power and are pouring ad dol- lars into drawing older consumers in their 60s and 70s." The industry's magazine of record, Advertising Age, "even spotlighted a string of campaigns featuring octogenarians from global brands like Nike and Poland Spring." And it's a myth that healthcare costs associated with the senior population in the United States are soaring. In fact, most of the increase in healthcare spending since 2002 has occurred in the population between 18 and 64 years of age. How to think about generations We're at an unprecedented juncture in history: Several generations of relatively similar size are sharing the stage and competing for influence. Generations matter because they behave in specific ways related both to when they came of age and to their situation at the current moment. "The creation of a world view is the work of a generation rather than of an individual," wrote novelist John Dos Passos. "But we each of us, for better or for worse, add our brick to the edifice." These days, companies face a two-tiered issue: They are puzzled by millennial consumer behavior and uncertain of how to approach an older generation living and spending longer than any other to date (the notion of a comfortable retirement beginning at 65, a familiar benchmark, may no longer be as relevant). To further complicate the issue, is there any common ground between these generational groups? "Boomer bashing is in fashion," wrote Linda Bernstein in a 2016 article in Forbes. Many young people are angry with baby boomers, blaming them for everything from the financial crisis and climate change to an unpredictable economy. There's also a rift politically. While, on average, young people tend to be more progressive, they see among their parents and grandparents widespread support for populist politicians, new forms of nationalism, and walls to keep out the unwanted. Furthermore, the 2008 financial crisis made people question the old idea that each successive generation was poised to do better financially than their parents. But the finger-pointing goes both ways, as generations exchange accusations of self-dealing and narcissism. What's fundamentally new about these intergenerational dynamics is that as 2030 approaches, conventional definitions of "young" and "old" will become obsolete. We can no longer assume that dynamism is a synonym for youth and decline is associated exclusively with old age. New technological developments will completely transform how we deal with retirement and geriatric care. Pause for a moment to visualize a world in which our parents and grandparents are among the most active and productive people on the planet. Imagine millennials, raised in a high-tech world, starting businesses consciously intended to benefit a population over 60. Consider the possibility of a world where age is less of a factor in hiring — where a 70-year-old new hire, for example, might not be unusual. How will the spending power of this over-60 group, which is estimated to reach $15 trillion a year, materialize? Is gray the new black? The German sociologist Karl Mannheim was the first to point out the importance of generations. Writing a century ago, he defined generations as groups of people united by time and space who behave in unique ways that last over their entire life span, forming a kind of collective meaning attached to certain experiences: the Depression, World War II, the civil rights movement, the Internet, or social media, for example. This is different from an "age cohort," which simply denotes being born within an arbitrary time period, like a decade, with no unifying trait ascribed to it. Members of a particular generation develop a shared consciousness, despite differences in, say, socioeconomic status or cultural values. Mannheim referred to such subgroups as a "generational unit." For instance, consider the differences within the American "Civil Rights Generation" in terms of their views about society, their proximate relationship to the cause, and their level of political engagement. But there's another side to generations that was first conceptualized in the 1970s by French anthropologist and sociologist Pierre Bourdieu. Rather than identifying a historical event, Bourdieu focused on "predispositions." In his view, each generation develops "natural and reasonable practices or aspirations which another [generation] finds unthinkable or scandalous." In other words, an element of acquired routine (what he called "habitus") and socialization sets each generation apart. This element of identity is essential to understanding the impact of generations on the economy, especially in terms of savings and consumption. Consider the implications of different generations vying to advance their own economic and political agendas. Then consider that within each of these generations are diverse subsets with their own preoccupations and needs. Let's also ponder how aging within a specific generation impacts attitudes or behavior over time. Whatever their differences at birth, do people in a generation converge on a set of values as they get older? From 2030: How Today's Biggest Trends Will Collide and Reshape The Future of Everything by Mauro F. Guillen. Copyright © 2020 by the author and reprinted with permission of St. Martin's Press.
Mauro F. Guillén is one of the most original thinkers at the Wharton School, where he holds the Zandman Professorship in International Management and teaches in its flagship Advanced Management Program and many other courses for executives, MBAs, and undergraduates. An expert on global market trends, he is a sought-after speaker and consultant. SEE ALSO: Remember the word 'tomboy'? Here's how cultural forces and norms are finally helping us shed the outdated term READ ALSO: The inside story of what led a Beverly Hills mom — once named one of the most powerful women in Hollywood — to get tangled up in the college admissions scandal Join the conversation about this story » NOW WATCH: Here's what you're actually seeing when you spot a meteor shower
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THE MILLENNIAL FINANCIAL HEALTH REPORT: How the largest generation is saving and managing their money, and how banks can target products and messaging to reach them
Summary List Placement This is a preview of the Business Insider Intelligence Millennial Financial Health premium...Summary List Placement This is a preview of the Business Insider Intelligence Millennial Financial Health premium research report. Purchase this report here. Business Insider Intelligence offers even more banking coverage with our Banking Briefing. Subscribe today to receive industry-changing financial news and analysis to your inbox. As the largest living generation by population, and soon income, millennials are a prime target for banks — butovergeneralizations of their financial health make it hard to attract the group. Millennials have been the subject of misinformation with regard to financial literacy, spending habits, and brand loyalty. In reality, they're encountering diverse financial milestones, and tailoring products directly to their varied needs can help banks take full advantage of the opportunity presented by serving millennials. Business Insider Intelligence conducted an exclusive survey to better understand US millennials' financial health. The Master Your Money: Learn & Plan Survey was designed by Business Insider Intelligence and fielded online from November 23 to 27, 2019, to a third-party sample of 2,007 US millennials aged 19-37. The sample was selected to closely resemble the overall US population (based on census data) on the criteria of age and gender. The results of the survey reveal fresh insights about millennials that banks and other financial services providers can use to build targeted products and tailored messaging for the group. Our data highlights three areas that are impeding this generation's financial health: debt, trouble growing savings, and lack of financial education. Millennials' debt is heavily concentrated in credit card debt, student loan debt, and auto debt. Meanwhile, low-income growth and high debt burdens have made it more challenging for them to save. These findings, and our analysis, are supported by interviews with executives from major banks, like JPMorgan Chase and Bank of America. But millennials aren't a homogenous group — rather, they behave like three "sub-generations," with distinct lifestyle habits, financial needs, and behaviors. These factors impact the sub-generations differently, making it important for banks to understand the characteristics of millennial consumers in each segment, which can sharpen acquisition and servicing strategies for banking providers. In The Millennial Financial Health Report, Business Insider Intelligence identifies strategies for banks and financial services providers to reach millennials. We identify three millennial sub-generations, the unique financial needs and challenges of each, and the ways providers can tap into them. We offer recommendations for acquiring millennial customers, encouraging them to save more, and deepening the customer relationship to become a trusted advisor. The companies mentioned in this report include: Acorns, American Express, Apple, Bank of America, BuzzFeed, Capital One, Citi, Citizens Bank, Credit Karma, Digit, Disney, Goldman Sachs, Hulu, JPMorgan Chase, Mint, Navy Federal Credit Union, Netflix, Robinhood, Santander, Sprint, Stash, US Bank, Verizon, Wells Fargo. Here are some key takeaways from the report: Millennials are estimated to be the largest living generation in the US — but the disparate financial needs of consumers at different stages of this age group can make it challenging for banks to take full advantage of the opportunity presented by serving them. They're often treated like a homogenous group, but millennials can be divided by age into sub-segments that boast different financial realities, which banks need to understand in order to effectively cater to all customers in this generation. Supporting millennials through their unique financial milestones can allow banks to form lifetime relationships with these consumers early on. Banks should take a behavioral approach where they meet consumers' specific needs based on their actions rather than try to broadly serve the generation. In full, the report: Uses primary data to identify the unique needs and challenges of each millennial sub-generation. Explores strategies banks should consider to tailor their offerings to millennials' needs in order to improve their financial health via savings tools and, in turn, cement their loyalty as customers. Supports analysis using interviews with executives from incumbent providers like JPMorgan Chase and Bank of America. Gives recommendations for banks regarding how to acquire, service, and encourage millennials to grow savings. Highlights noteworthy strategies taken by banks and third-party financial apps to reach this generation. Interested in getting the full report? Here's how to get access: Business Insider Intelligence analyzes the banking industry and provides in-depth analyst reports, proprietary forecasts, customizable charts, and more. >> Check if your company has BII Enterprise membership access to the full report Sign up for the Banking Briefing, Business Insider Intelligence's expert email newsletter tailored for today's (and tomorrow's) decision-makers in the financial services industry, delivered to your inbox 6x a week. >> Get Started Purchase & download the full report from our research store. >> Purchase & Download Now Join the conversation about this story »
'It's Gen Z you want': Millennials are defending themselves from accusations that they're out partying and ignoring warnings amid the coronavirus pandemic
Millennials say it's Gen Z, not them, who have been partying and ignoring coronavirus warnings. "Millennials...Millennials say it's Gen Z, not them, who have been partying and ignoring coronavirus warnings. "Millennials are not partying," tweeted one millennial. "We and our anxiety issues are holed up ... It's Gen Z you want." Young people have been called out for not social distancing, but it's Gen Z who keep crowding beaches for spring break. Visit Business Insider's homepage for more stories. Millennials are sick of getting called out for not staying inside during the coronavirus pandemic. Everyone from celebrities like Hilary Duff to federal and local government officials have urged millennials to stay home. In a White House press conference on Monday, Deborah Birx, leader of President Trump's virus response group, said millennials "are the core group that will stop this virus." "It's important that we all work together, especially younger people, millennials," Seema Verma, administrator at Centers for Medicare & Medicaid Services (CMS) Administrator, said. "They may feel healthy. They may feel like if I get this virus it's not going to be that big of a deal, it's just going to be like the flu, but the reality is they can contribute to the spread." But according to millennials, they're already heeding coronavirus warnings. It's Gen Z you should be reprimanding, they say. "Millennials are not partying," tweeted National Review reporter Mairead McArdle. "We and our anxiety issues are holed up working from home, watching Hulu, and yelling at our parents not to go outside. It's Gen Z you want." Millennials are not partying. We and our anxiety issues are holed up working from home, watching Hulu, and yelling at our parents not to go outside.It's Gen Z you want — Mairead McArdle (@JohnsonHildy) March 19, 2020 Younger generations have recently gotten a lot of flak for taking advantage of cheap airline tickets to book travels or vacations and for crowding beaches and partying on booze cruises while on spring break. Jawontae Rodgers, a 21-year-old who spring breaked in Panama City Beach, told Valerie Crowder of local outlet WFSU he didn't think the virus was a "big deal." "I'm not saying I can't die from it," he said. "I just don't want to stop living my life because you only have one. YOLO: You only live once." According to the Pew Research Center, millennials turn 24 to 39 in 2020. The oldest of Gen Z turns 23. That means millennials have graduated college — it's Gen Z who are the ones living it up on spring break. Both generations, though, seem to be into today's cheap travel, according to Ben Kesslen for NBC, who talked to a range of 20-somethings about the trend. Millennials are more concerned about their boomer parents Lauren Morgan, a millennial licensed professional counselor in Cleveland, told Troy L. Smith of Cleveland.com that not all younger generations have recognized the gravity of the coronavirus pandemic. Their attitude isn't surprising, she said, when they already feel the deck has been stacked against them. "For a lot of millennials [and Gen Z], it already feels like the end of the world," she said. "These are young people who don't know anything other than living paycheck to paycheck. They're riddled with student loan debt. They can't afford something like a house or even a car. She added: "We're also in this political climate of young people choosing to vote for Bernie Sanders and baby boomers voting for the same sort of thing we've always had. So, millennials and Gen Z say to themselves, 'You don't care about us and whether we can afford healthcare. So, we don't care about this thing that's affecting you.'" But as McArdle's tweet shows, there are millennials out there taking this seriously. The coronavirus is scary to the generation because it shows them how old their parents are. Many millennials have baby boomer parents in the high-risk group for coronavirus: Those over age 60 and those with preexisting conditions are at greater risk of becoming ill. Coronavirus risk also increases with age. Business Insider's Hayley Peterson spoke to several millennials who said they are concerned about their parents' health and who voiced frustration in trying to convince them to stay inside. As Jared, 31, told Peterson: "Literally was fighting with my mom this morning about her a) going to Atlantic City last weekend; b) going to another casino via bus this weekend; and c) a cruise in April she refuses to cancel."SEE ALSO: 'We're not worried about it:' Photos show the coronavirus pandemic isn't stopping spring breakers from crowding beaches and partying on booze cruises DON'T MISS: 'The party is over': Officials in Miami, the unofficial spring break capital of the US, are kicking partiers off beaches and implementing 11 p.m. curfews to curb the coronavirus spread Join the conversation about this story » NOW WATCH: How networks treat the Democratic debates like reality TV
A startup founder who spent 100 hours interviewing millennials found 3 hangups usually keep them from being good with money
Sunny Israni, founder of personal finance app Clasp, spent over 100 hours interviewing millennials about...Sunny Israni, founder of personal finance app Clasp, spent over 100 hours interviewing millennials about their money perspectives and habits. In his interviews, he found that millennials who aren't good with money don't have a clear vision of what money means in their life. He also found that they tend to over-spend in social situations. And, when millennials fall behind their peers financially, some of them have a tendency to give up. What separated millennials who are good with money from those who aren't is mindset — they know what role money plays in their lives and have goals, have boundaries on spending, and work to improve their finances. Want to do better with your money? SmartAsset's free tool can help find a financial adviser near you » Sunny Israni wanted to know what separated the millennials who are good with money from those who aren't. So he asked them. For his new business, a personal finance app called Clasp, the tech entrepreneur and former Wall Street trader spent over 100 hours talking to millennials across the US about their money habits, attitudes, and goals to find out what made millennials good with money. "I wanted to target two different groups: people who tend to make really great decisions around their finances, and people who may not have made the best decisions," he told Business Insider. "I wanted to try to understand, 'what are the big factors that drive the quality of our financial decisions? Is it income? Is it geographic location?'" He found that what made millennials good with money wasn't either of those factors. Rather, it was how they thought about money. In his research, Israni found that three main psychological hurdles tend to keep millennials from being good with money: 1. They don't know what money means to them Israni found that nothing had a bigger impact on how millennials manage their money than their mindset. "I think about it in the terms of identity. As I was speaking to a lot of the participants, I got the sense that when people describe their financial behavior, they're really describing who they are as people," Israni said. "It's like their spending is a declaration of their identity." Millennials who are good with money tended to have a clear vision of what they want from it, and know their money goals. "I spoke to someone from the Midwest who was early in his career and really militant with savings. I got the sense that he was deriving his whole identity from financial freedom. He had crystal clarity on what money represented in his life," Israni said. "People who weren't necessarily making as sound financial decisions had this tension around what money really represented in their life." This tension tended to mean more than internal conflict for the millennials Israni spoke to — it also led to bad habits. "The people who had that tension the most tended to be the people who didn't necessarily make the best financial decisions," he said. 2. They don't set limits on social spending Israni noticed a bad habit that held millennials back: Spending too much on social situations. He also noticed that millennials who are good with money knew where to draw the line on their social spending. "When you're in social situations, people tend to spend more, and we know this. But when I looked at the people who are doing really well, I've found that almost all of those people had an understanding with their friends and their social circle around activities that made sense for them, and that were not necessarily so expensive," he said. "I got the sense from everyone that the price tag you pay to pursue a social activity almost never really correlated with the joy and happiness and the memories that come out of that." Meanwhile, the others kept spending, and weren't honest and realistic with their friends about what they could afford. "The people who weren't making sound decisions didn't talk about it with their friends," Israni said. Israni made it clear that cutting out social spending isn't the answer. Rather, it's about knowing where your boundaries lie. "Have a list of things to do that don't necessarily break the bank," Israni said. "Your friendship with someone shouldn't be expensive." 3. They adopt a 'screw it' mentality and stop trying Israni found that millennials who were financially behind didn't feel that anything could change for them. He found that eventually, they stopped trying. In his opinion, it all comes back to mindset. "After they were past a certain level of circumstances, they got into this whole 'screw it' mentality, where they just felt like they couldn't get a leg up," Israni said. "Oftentimes, it was mental. They felt so behind their peers that they just said 'screw it.'" "It's exacerbated by the current macro trends, especially around climate change and our political system," Israni said. "People are like, 'well, climate change is going to end the world anyway, so might as well live it up right now.'" For a generation that's been behind financially from the start, that's a problem. "It is very much negatively impacting financial behavior, especially for people who are already behind," he said. For these millennials, Israni said making progress comes down to thinking differently. "If their mindset isn't right, then they're not going to use any budgeting, whether that's a spreadsheet or an amazing app or even just you looking at your bank account," he said. Millennials who are good with money, he found, want to improve their circumstances, and don't let the doom and gloom stand in the way of their money goals. SmartAsset's free tool can find a financial adviser to help you get better with money » More personal finance coverage 4 reasons to open a high-yield savings account while interest rates are down It took less than 10 minutes to open a high-yield cash account with Wealthfront and earn more on my savings How to buy a house with no money down When to save money in high-yield savings Best rewards credit cards 7 reasons you may need life insurance, even if you think you don't Join the conversation about this story » NOW WATCH: How to find water when you're stuck in the desert