How Different Generations Invest
Different generations invest differently, according to a recent finding from Visual Capitalist.
Just how different generations invest was revealed in a recent survey where a sample population representing three generations, millennials (18-34 yrs), Generation Xers (35-54 yrs and Baby boomers 55+ years where asked how they would invest 10,000 dollars.
Note that the survey was asking how each generation would spend the money as there would obviously be differences, bearing in mind varying priorities among the generations.
But asking how each generation would invest 10,000 dollars is another way of asking where millennials, Generation Xers and Babyboomers see or perceive value going forward.
The question; If you were given $10,000 tax-free and had the ability to invest all of it in one of the following options, which would you choose?
See how different generations invest.
At the top of the list was pay down debt. Millennials, this is the generation that grew up during the Great Recession 22.4% would pay down debt, generation Xers 25.3% and the Boomers 33.1%. So there was no change in the top priority of how the generations would invest, at the top of the list for 18-55+ years is paying down debt. This confirms that households are up to their neck in debt.
With regards to real estate look at how the different generations invest and an interesting trend emerges. Only 15.1% of millennials would choose to invest in real estate, generation Xers14.6%, 11.2% Baby boomers. Previous generations of 18-34 yrs would jump on the idea of owning their own home. For those of you a little older who can remember the older generation telling you to get a mortgage and get on the property ladder as soon as possible because real estate is the ultimate investment that was true back then. But it is not so for millennials today.
Perhaps this is just one impact of the central bank’s funny money monetary policy to keep asset prices artificially inflated. The central bank’s greatest monetary experiment has evidently changed how different generations invest. The millennial generation is not that eager to invest in overinflated real-estate prices-not even if they were given 10,000 dollars to do it!
How different Generations invest in stocks also shows that millennials don’t have confidence in current stock prices. Millennials would rather invest in education 9.9% (third on the list) and the next on the list Virtual currency 9.2% only 6.6% would invest in stocks.
What can we deduce from how the different generations would invest? The millennials (the soon to be the leaders of tomorrow) do not see value in what the previous generation believed to be rock solid investments. Real estate, stocks are somewhat discarded as being in a bubble. Moreover, the fact that millennials would rather invest in cryptos is evidence that this generation doesn’t have confidence in the central bank’s status-quo of fiat currency.
Nevertheless, millennials would invest in themselves, in an education setting up a business.
So if how different Generations invest, particularly future generations gives investors a heads-up on future trends then perhaps we will see a long-term correction in what was once considered rock-solid investments.