Sometimes stereotypes become so widely accepted that nobody takes a step back to actually examine the sweeping generalizations to see if they hold any truth. This is especially true of millennials.
From Time Magazine's 2013 cover story, "The Me Me Me Generation," to articles in the Wall Street Journal, Boston Globe and features on The Today Show, the drumbeat pounded into our heads suggests GenYers are lazy, entitled, indebted and unreliable. That they are barreling towards being a lost generation, setting up a catastrophic situation for the economy generally.
It's a worrisome picture that should make us all fear for what's next.
Except, of course, for the fact that it's not true.
Millennials have indeed racked up $1 trillion in student loan debt to become the most highly educated, highly indebted generation in history, and they're handling their business a whole lot differently than their parents' generation. This is causing many people who are stuck in the "there's-a-right-way-to-do-things" mantra to spin out of control.
I recently had an interesting chat with Kate Holmes, a 31-year-old Certified Financial Planner and founder of Las Vegas-based Belmore Financial. A millennial herself, Holmes authored the newly released, free eBook The Millennial Next Door [Revealed]: How To Be Financially Successful in Your 20's, in collaboration with personal finance community MoneyTips.com. It's based on a survey of more than 500 millennials, nearly 300 of whom self-identified as successful millennials.
This landmark survey generated some fascinating results. An astounding 96 percent of successful millennials have already begun saving, with 35 percent accumulating $10,000 to $50,000 in various savings accounts and instruments. 59 percent regularly spend less than they earn, and 50 percent have saved enough to maintain their standard of living for at least three months. An impressive 89 percent have some college education, with 71 percent of them footing at least some of their own tuition fees. 91 percent consider themselves financially literate.
But the number that stood out most to Holmes, and shocked me: nearly 47 percent of successful millennials said that saving enough for retirement was their biggest financial concern.
I've spent a large portion of my career helping people prepare for retirement. I can't tell you how many hundreds of people in their 50s and 60s have walked into my office without having a penny saved for their golden years. So to hear that young people in their 20s and early 30s are already looking that far down the road was eye opening.
"That was the most unexpected thing to me," said Holmes. "I think they look at what their parents have done and said: 'I don't want to be in the same position when I'm that age. I don't want to work in a job that sucks and that drains the life out of me.' They are reimagining the whole concept of retirement. Rather than just saving 30 percent of their salary and then traveling the world when they are retired in their 70s, millennials want to enjoy their lives now, while keeping an eye on their future."
Rethinking retirement was just the tip of an overall change in the way millennials are viewing success.
In the eBook, Chelsea Krost, a leading millennial voice and a TV and radio host, says the word "success" is defined differently by millennials than by older people: "success could mean being financially independent and debt free, working in a space that you are truly passionate about, or getting married and having children. A millennial has the flexibility and resources today to really create what they define as success."
Holmes was quick to point out that what makes millennials so unique is often what gets them labeled lazy by older generations. They don't want to be in an office from 9-5. They don't want to work at times they find themselves to be the least productive. They want to set their own hours and are in a position with technology and the Internet to do exactly that. Eventually, they want to do more than just set their own schedules -- they want to run their own businesses. According to a Bentley University study, 67 percent of millennials want to be entrepreneurs.
In order to follow that path, millennials need to be out of debt. They grew up in a terrible economic environment. They saw their parents had been faithful employees for decades and were suddenly out of jobs. They thought 'we can do better.'
They looked at the piles of credit card debt their parents had from spending frivolously on expensive cars and big luxury items they didn't really need -- and have gone out of their way to avoid it -- 60 percent of successful millennials have less than $15,000 in debt.
"I tell my clients to make sure they are always living below their means," said Holmes. "Spend less than you make. Then you have more flexibility throughout your life. If you don't have debt, you can start a business. You can make different financial decisions and life decisions. It gives you options and the ability to stay open to opportunities."
The study also found that 87 percent of successful millennials set financial goals and are on track to meet at least some of them.
You really need to know what it costs to live. I think that goes back to figuring out what's truly important to you. When I sit down with millennials, one of the best exercises is to not only know how much you're spending, but what percentage of your income. When you realize you spend 20 percent of your take home pay on happy hour, you have to ask -- is that really contributing to the life I want in the long term? For a lot of millennials, they find they can often be happier with less than they think.
Holmes wrote The Millennial Next Door to challenge our misconceptions by spotlighting her most successful peers. The eBook reveals the attributes and behaviors of those living comfortably today and shares their savings, investment and planning secrets for affording the lifestyle they want in the future. It may very well be we all have something to learn from this crowd.
