Are millennials self-centered, valuing their personal interests over relationships? Do they prefer technology to human interaction? Do they avoid investing? Are they are in debt and unhappy?
These are some of the common stereotypes about the 75 million Americans ages 20 to 36 — members of the millennial generation. But are the myths true? The 2017 Wells Fargo Millennial Survey, a Harris Poll that collected data from 1,771 millennials June 16-29, found a few of the answers.
Myth: Millennials value money over relationships
Of those we surveyed, 26 percent were “affluent” — earning an average of $88,000 annually and with $100,000 or more in investable assets — and 74 percent were not affluent, earning $43,000 annually on average and having less than $100,000 in investable assets.
An old Beatles tune taught the world that “money can’t buy me love,” and millennials seem to have embraced this message — valuing family and relationships over finances. In fact, 88 percent of millennials surveyed said success is more about being happy and less about material prosperity.
Love and relationships are the top drivers of that happiness. Sixty-two percent of millennials chose “love” over “money,” “work,” “power,” or “doing good” among words they most associate with happiness. They also ranked spending time with family and friends highest among the top three activities they pursue to be happier.
Myth: Millennials don’t invest
There is some truth to this. Just as the Great Depression produced a generation of thrifty Americans, our survey found the Great Recession has made millennials wary about investing in general and the stock market in particular.
Thirty-seven percent aren’t currently investing, 20 percent say they never plan to, and about 41 percent say they’ve reduced their investments because of the recession.
But, that doesn’t mean money and investing aren’t important to millennials. Fifty-one percent of millennials overall (and 69 percent of affluent millennials) still think the stock market is the best place to invest money.
In fact, 98 percent of millennials surveyed consider feeling financially secure as important as physical and mental health. Moreover, a higher percentage of millennials than baby boomers who aren’t currently investing (17 percent versus 7 percent) say they plan to invest in the future.
While fewer millennials have financial advisors than baby boomers, they’re also more likely to want one when they do choose to invest (39 percent versus 14 percent).
Myth: Millennials prefer technology to human interaction
Despite the common misconception that millennials would rather interact with technology than real people, our survey yielded different results. When we asked about building a relationship with a financial advisor, 14 percent of millennials — more than twice the amount of baby boomers — said it was important to them that their advisor called them on their birthday!
They said birthdays are a great time for advisors to check in and offer tips to make their financial lives even better. This is emblematic of a generation that wants relationships that go beyond the portfolio and investments. In fact, Wells Fargo will launch Intuitive InvestorSM later this year — a digital advisory service that blends the convenience of online investing with the personal touch of unlimited access to phone-based advisors.
Myth: Millennials are in debt and unhappy
Another myth the survey shatters is the belief that all millennials are debt-strapped and pessimistic about their financial futures. Instead, we found great diversity among millennials in financial wealth and knowledge.
True, many come into adulthood with student debt (around $20,000 according to the 2016 Wells Fargo Millennial Survey), and this does make a big difference in flexible spending and ability to contribute to retirement savings. But there’s also a large number of affluent millennials who are actively engaged in their finances, and who feel more in control of their financial lives than baby boomers and non-affluent millennials combined (85 percent versus 62 percent).
The biggest aha! moment during our millennial research was discovering the connection between financial engagement and happiness — what we dubbed the “Positive Financial Indicator” (PFI).
Millennials who could affirm each of these five statements that make up the PFI reported being happier than those who couldn’t — a finding that held true across age, sex, and other factors:
- I have enough money to be able to save for future needs.
- I am saving enough for retirement.
- I feel in control of my financial life.
- I take an active role in setting and achieving goals for my financial life.
- I am able to pay for my monthly expenses.
This is important insight since 69 percent of millennials say they want to conquer their anxiety about money, and only one in three are satisfied with their financial lives.
So, are the myths about millennials true? Our research indicates that many aren’t. Millennials are starting to save and become investors. They value their friends, family, and other relationships. They are a little anxious about money, but those who have overcome that anxiety are happier. And while they use and enjoy technology, they also aren’t afraid to ask for advice from financial advisors. Advisors owe it to millennials to be ready, to meet them where they are, and to provide the personalized advice, guidance, and relationships they want.
Majority of millennials are happy despite financial Anxiety, Wells Fargo study finds (News release, Sept. 20, 2017)
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