Financially Savvy Millennials

Posted By Darren Winters on Jan 15, 2024

Financially Savvy Millennials

Financially savvy millennials could be what these 20s-something young generation might need to evolve into to survive, get ahead, accumulate wealth and multiply.  

Millennials, generation Y and Z, could be mirroring the Greatest Generation, born between 1901 and 1924, who came of age during the Great Depression and the 1940s, many of whom fought in WW2.

Millennials are finding it harder to get ahead than their parents with rising job insecurity, cost of living crisis, difficulty saving, accumulating, putting a deposit down on a home and starting a family. 

Millennials, the generation that loves to travel and is technology savvy, are frugal with their money, refusing to shell out their hard-earned cash for snob aspirational brands.  

Even alcohol consumption has fallen amongst Generation Z, which is considered the most sober generation. 

These young adults grew during the Great Recession, with many living through the financial hardship of at least one parent losing their job. They have experienced austerity and have embraced frugality in their young adult lives. The savings rates were the highest ever in the post-Great Depression era.  

Financially savvy millennials will need to fend for themselves

Financially Savvy Millennials

The old hands in finance have realised that policymakers will save bonds and government spending to finance state capitalism. So a group of people, pensioners and public workers will be spared, even though their fixed income will wither on the inflation wine. But who will save millennials in a backdrop of stagnating wages, a rising cost of living crisis due to currency debasement and high real estate prices, which will be propped up to save the banks? 

Financially savvy millennials will realise that a fiat debt currency system has inflation built in by default

Think about it. If the inflation rate rises faster than the rate of public debt, then that is one way of eroding the public debt away. 

So savers, people on fixed incomes and, to a lesser extent, wage earners will experience the purchasing power of their currency diluted and thereby falling living standards. 

Financially savvy millennials will not want to leave their cash in the piggy bank as the pig will grow fat on inflation leaving them with less purchasing power. 

First-time home buyers, already saddled with student debts, are already struggling to accumulate enough savings to put down as a deposit for their first home. Home prices annually are rising faster than what they can save per year. 

Financially savvy millennials trying to save a deposit for a home will seek returns on their savings

I remember my economics professor saying that the first thing we should do when we graduate and get a job is take out a mortgage and buy a property. That classic piece of advice, three decades ago, today is relevant. 

Accept what you can’t change. Debt servitude is a form of modern serfdom. At the apex of the human food chain, financial elites are the cow farmers. The well-sought-after Holstein Cow provides the farmer with a voluminous source of milk. The Federal Reserve prized Holstein Cow is the Federal Government paying 729 billion dollars in interest payments per year. State Capitalism, the latter word, implies private ownership. Homeownership, the dream of many to break away from their shackles of slaving on the feudal lord’s private land, is appealing.     

Modern serfdom, remote working on a mortgaged property, with today’s shackle being debt?

But the big difference today is that when that mortgage is paid, the title deeds are yours, with you becoming the landlord, free. 

State Capitalism loves debt. Governments, left and right of the political spectrum, will spend to buy votes, and people would rather own their property than spend their hard-earned income on rent. 

Financially savvy millennials know they need to get on the property ladder as soon as possible

The long-term trajectory of residential properties will be higher because those benefiting the most from higher property prices are at the top of the human food chain. 

Financially savvy millennials know that investing will be vital to building a deposit to purchase a home. 

The higher the reward, the higher the risk.

So young investors need to be ultra cautious with their hard-earned savings. The world’s reserve currency is USD, and in times of war and financial woes, the king dollar outperforms.

Here is my list of the safest investments to protect your savings against inflation;

1) US short-term government bonds: Treasury bills (T-bills): T-bills maturities of four, 13, 26 or 52 weeks 

Some of the most popular short-term government bond ETFs include: 

2) Insured USD cash deposit at the bank with savings rates to compensate for inflation.Check the credit rating of your Bank. 

3) Precious metals. Gold and silver, with the latter being more volatile. But if you are in a warzone, moving across the border with precious metals could add to the danger. 

4) Currencies to hold USD, in times of trouble, people accept USD as tender. 

Greek sovereign debt crisis, US dollars were circulating, and people were paying a premium for dollars.

CHF Swiss Franc holds its value well in wartime.  

5) Higher returns, higher risk cryptos. But it is too volatile to put all your hard-earned savings into. Moreover, any threat to fiat currency will most likely be dealt with. Looking under the cryptocurrency bonnet, I prefer cryptos where the blockchain network has utility for high-value transactions, has built in scarcity, and is not in competition with fiat currency. 

6) NASDAQ, the world’s technology park, could be another good long-term speculative play, particularly when the Fed starts cutting interest rates.

These are volatile growth stocks, and it is better to manage the risk by buying one of the 12 best NASDAQ ETFs.

Financially savvy millennials select regulated brokers, SEC-regulated in the US and FCA in the UK. 

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