Did you hear about the Camillus, NY man that sued his parents when they offered him $1,100 to move out of their house? The story of a 30-year-old deadbeat refusing to leave his parents’ home where he lives rent free fits perfectly into the stereotype of a lazy, self-centered Millennial (those born between 1980 – 1992) that my Generation X (1965 – 1979) takes delight in ridiculing.
That stereotype was fed further this week when the financial information website, MarketWatch, tweeted a link to an article offering Millennials retirement advice. Specifically, the article referenced a rule of thumb put out in a Fidelity Investments report from earlier this year that suggested a 35 year old should have 2X their annual salary saved for retirement.
On cue, Thirtysomethings replied to the tweet with characteristic cynicism and snark.
"By age 35 you should have double your salary saved."— A-Train (@aaronLebeahm) May 21, 2018
35 year old me: IM SUPPOSED TO HAVE A JOB?!?
By age 35 you should have accepted that capitalism will slowly suck the life out of you while the business owners grow wealthy beyond reason on the backs of their workers, retirement experts say.— Existential Comics (@existentialcoms) May 22, 2018
By age 35 you should have amassed a nice collection of hex keys, saved from all the IKEA furniture and futons you’re done with and donated/sold off by now.— Kristin Shafel (@kristinshafel) May 28, 2018
By age 35, millennials should have 40,000 avocado toasts set aside for retirement.— Paul Fairie (@paulisci) May 15, 2018
But instead of affirming ideas of what may be wrong with the next generation, these responses caused me to pause and reflect on what may be wrong with mine.
We X’ers came of age in the relative boom years of the 80’s and 90’s, as interest rates fell from historic highs, the end of The Cold War paid peace dividends, and technology transformed our lives. Millennials, on the other hand, were impacted by the recessionary hangovers of tech and housing bubbles, fought two extended wars, and face the real prospect of being the first generation of Americans that won’t be better off than their parents. As a result, Millennials have accumulated more debt (much from the costs of their education), had a harder time finding high paying jobs, and have saved less money than their predecessors. It really shouldn’t be surprising that they value experience over material possessions and have less optimism than their elders.
While it may be mildly self-inflating to snicker at the avocado toast eating, everyone gets a trophy, tiny home living, selfie takers from time to time, it may also be worthwhile for us older folks to look a little closer at the Millennial point of view.
According to a 2014 Harris Poll:
- 82% of millennials attended or participated in live experiences (parties, concerts, races, sports, etc.) versus 70% of other generations.
- 77% say their best memories came from live experiences.
- 69% said fear of missing out (FOMO) of an experience is a bigger concern than other priorities.
As a financial planner, I regularly help clients develop and implement plans for reaching their goals. Most of the conversations we have are based on arithmetic and statistics, with emotions considered only as an impediment to be managed. But having a better understanding of Millennial behavior has caused me to rethink about planning for all of my clients.
Most financial planning conversations begin with questions about what someone's goals are or how much money they have. While those are important variables that must be part of a plan, other questions may be equally useful to reaching better outcomes sooner. Two great ones are:
- What makes you happy?
- What keeps you up at night?
Sometimes I find that the answers to these questions can significantly influence the direction of someone's plan.
My own experience may offer some insight. When I was in my early 30’s, I looked at what I had been saving and earning on my investments during the 90’s and calculated that I should easily be able to retire by mid-40’s. Around my 45th birthday, nowhere near retirement, I recalled some of those plans and frequently thought about why they had gone astray.
I had a great paying job that typically consisted of half days. You know, 7AM to 7PM. A typical day consisted of commuting, sitting at a desk doing paperwork, listening to conference calls (most of which were about putting a happy face on whatever corporate initiative was being “cascaded to the associates”, aka rolling downhill), and occasionally talking to a disgruntled customer. Along the way, we moved cross country twice, had two kids, traded up to bigger houses with even bigger mortgages, bought nice cars, and generally tried to out Jones the Joneses.
There are 168 hours in a week, of which I spend about 56 sleeping (or trying to). With 60 spent working/commuting, that left 52 hours for my family, friends, and other things I enjoy. I had essentially chosen to spend over half of my life experiences primarily with people that I didn’t have huge affection for to afford supporting the lifestyle for those that I did. Oh, and did I mention that for most of my working career, I had trouble sleeping on Sunday nights?
Then, a few years ago, I had the realization that doing something else was simply a choice. It was terrifying to leave a high paying job to start a new business, but the payoff was much more quality time with loved ones, friends, and my community. I’m still nowhere close to retirement, but now I enjoy what I do and who I do it for.
If I had asked myself questions about happiness back when I was making plans in my early 30's, I probably would have realized I feared missing out on seeing my family grow up and would have focused on how I could spend more time with them. If I had thought about why I was so tired on Monday mornings, I may have understood sooner that being in the corporate grind (and Austin traffic) was causing wear and tear.
At the very least, I believe that I would have made some different decisions along the way that would have led me down a different path sooner. All if I would have had more FOMO.
That's a lesson that we all can learn from the Millenial generation.
And, that avocado toast is pretty tasty.
Oh, and did I mention that these days I sleep like a baby on Sunday nights?
If your plan is keeping you up, get in touch.