Baby boomers, they’re quite similar to us. Or perhaps it’s more accurate to say that we are quite similar to them. When we say “we,” we are referring to millennials. As time marches on, it often leads to becoming more like your parents, regardless of how adamantly you vowed not to. Millennials (and even many Gen Xers) are not exempt from this phenomenon. Now that you are responsible for paying the electricity bill, you understand why your father always insisted on turning off the lights.
Millennials, those born between 1981 and 1996, have long exuded a sense of perpetual youthfulness. Of course, they are not going to remain young forever, and many of them are either approaching 40 or have already reached that milestone. This generation has been characterized by a feeling of arrested development. The stereotypical image of a millennial is a 33-year-old who still resides in his parents’ basement, worrying about being a forever renter without any prospect of retirement.
However, the reality for many millennials is starting to mirror that of their parents more closely. They are making progress in terms of earnings and wealth, and while they might still lag behind in homeownership, they are not without hope. It may have taken them some time to settle down, but they are beginning to do so and are gravitating towards suburban living. In essence, millennials are increasingly resembling boomers in certain aspects, and in some areas, they are even outperforming their parents.
After his father’s passing in 2022, William has spent a significant amount of time contemplating how much he has taken after his old man. He pursued a similar career path and became a lawyer. At the age of 31, he is married, just like his father was at that age. Although he has not yet purchased a home, he intends to do so soon in his hometown of Philadelphia. While William acknowledges that he is catching up to his father in various ways, he also recognizes that he has surpassed him in other areas. He is more financially savvy than his parents, thanks to the accessibility of financial knowledge nowadays. Although he is not engaging in anything unconventional in the stock market, he understands how to invest in an exchange-traded fund. He has also noticed similarities in how he communicates, his sense of humor, and his perspective on the world.
He remarked, “You come to realize that you embody more of your parents than you may have initially been comfortable with, and you recognize that you possess some of the same strengths and weaknesses as your parents.” William emphasized the desire to be his own person, yet statistically, he finds himself pursuing a path similar to that of both his parents. It’s as if the apple doesn’t fall far from the tree, as the saying goes.
Many millennial apples are now bearing a striking resemblance to the tree. While they may not have had the best start to their independent economic lives, they have made significant strides in
In 2022, the average net worth was $39,040, compared to $18,740 in 1989. Like William, many other millennials are showing a greater interest in the stock market than their parents. This shift could be due to the move from pensions to 401(k)s, requiring them to take more active roles in their retirement savings. The Survey of Consumer Finances discovered that in 2022, 63.6% of Americans aged 35 to 44 held stocks, whereas only 39.2% did in 1989. For those under 35, the percentage increased from 22.7% to 54.4%.
Beyond the common 401(k) investing, 20.6% of individuals aged 35 to 44 directly invested in stocks in 2022, up from 16.5% in 1989. Direct stock ownership among those under 35 hit a record of 23.1%, significantly higher than the 10.9% seen in 1989. This data seems to support the notion held by some millennials that their parents were lacking in the area of investing.
One such millennial is Faith Bergman, a 28-year-old working in fintech in New York. She shares similarities with her mother but stands out for her focus on investing and long-term financial security, which her mother did not prioritize as much. Bergman believes that investing, especially for women, has not been commonly practiced due to a lack of awareness.
Rob Williams, a managing director of financial planning at Charles Schwab, pointed out that millennials have greater access to investment information compared to baby boomers. According to a recent Schwab survey, millennials started investing at 25 on average, ten years earlier than boomers. Despite this head start, millennials are less confident in their investment strategies and financial goals compared to older generations.
While millennials have managed to build a decent nest egg, a common stereotype is that they may never own a home. The 2008 financial crisis and the recent pandemic have made it challenging for many millennials to achieve homeownership, with the homeownership rate among those under 35 lower than previous generations at the same age. However, the situation is evolving, and more millennials are becoming homeowners over time.
As of 2022, over half of millennials were homeowners. Daryl Fairweather, the chief economist at Redfin, noted that millennials are catching up to where Gen X was at their age and are narrowing the gap with boomers. Despite facing obstacles, millennials are making progress towards homeownership, even if it may take them a bit longer to reach their goals.
Fairweather mentioned that baby boomers are taking longer to downsize and sell their homes, but this trend is expected to change in the future, leading to more housing options for younger generations. The delay in homebuying among millennials is not a matter of unwillingness but rather a result of postponed decisions. The average age of first-time homebuyers has increased to 38 years old, a significant jump from the late 20s in the 1980s. While millennials may not be entering the housing market at a young age, they are not permanently excluded and will eventually purchase homes in their middle age.
Sociologist Rob Gruijters from the University of Bristol highlighted the significant disparities in wealth and experiences among millennials. The wealth gap within the millennial generation is influenced by various factors, including parental wealth and occupation. Wealth and inheritance play a crucial role in determining the financial status of millennials, with those from affluent families having better financial prospects. However, not all millennials inherit wealth equally, leading to differences in economic outcomes within the generation.
The disparity in housing affordability and availability also impacts millennials’ experiences, particularly in comparison to their parents’ generation. Redfin’s analysis shows that millennials in coastal cities face higher housing prices due to factors such as land costs and population density. This challenge makes it difficult for millennials to match their parents’ homeownership experiences, especially if their parents lived in urban areas with more affordable housing options.
The decision to move to the suburbs is influenced by factors such as affordability, availability of housing stock, and family considerations. Black millennials are half as likely to own homes as white millennials, reflecting a similar trend seen among their boomer parents. While there have been some improvements in homeownership rates among older generations, it remains uncertain whether millennials will achieve the same level of homeownership success.
The text discusses how wealth passed down through generations perpetuates inequality, particularly in a country with a significant racial wealth gap. As homeownership becomes increasingly unaffordable, this further widens the inequality gap based on race and wealth. First-time homebuyers today have higher incomes and are more likely to utilize various financial instruments such as stocks, 401(k)s, or cryptocurrency for their down payments, indicating a wealthier demographic entering the housing market.
Aging brings various challenges, including losing one’s “cool factor,” facing physical changes, taking on more adult responsibilities, and reassessing parental influences. There is a discomfort in recognizing similarities between oneself and one’s parents, despite the generational expectation of being different. Many millennials, contrary to the minimalist stereotype, are accumulating possessions and shifting politically towards the right as they age. While delaying marriage and children, they eventually reach these traditional milestones.
One individual, Victoria Lamson, acknowledges the advantage of her generational upbringing, with her parents’ business ownership and emphasis on traditional values. She aims to parent her children differently, prioritizing experiences like travel over saving solely for retirement. However, she acknowledges the influence of her upbringing in her current lifestyle choices.
Millennials face the challenge of matching or surpassing the achievements of previous generations, particularly in terms of homeownership, education, and career stability. They also grapple with economic uncertainty, marked by events like 9/11 and the Great Recession. Concerns about the future of government programs like Social Security and Medicare compound these uncertainties, affecting millennials’ retirement prospects.
Despite past concerns about their financial future, millennials are generally faring well on average. However, they remain apprehensive due to ongoing economic challenges and the concentration of wealth among the top earners. The text ends on a note of uncertainty, questioning whether millennials will overcome these challenges or face prolonged financial insecurity.
It’s not always easy to be okay, particularly in a society where the pressure to constantly strive for more and better is ever-present. Many individuals find a certain charm in recognizing traits of their parents within themselves. Nowadays, the children of Millennials are rolling their eyes at the music of the 2000s when it plays in the car, just as Millennials did with their parents’ ’70s hits. They now comprehend why Mom habitually turned down the thermostat and why Dad stressed the importance of knowing how to change a tire. Despite their complaints about the Baby Boomers’ tendency to hoard things, they are now faced with their own collection of high school yearbooks from two decades ago. Millennials are not a lost generation; they are the Baby Boomers 2.0, complete with a fondness for avocado toast.
Emily Stewart, a senior correspondent at Business Insider, covers topics related to business and the economy.
