With every generation, attitudes shift and trends emerge that define an era. As the Millennial generation comes into adulthood, countless researchers and journalists are expounding on the behaviors and attitudes of this “Next Generation.”
Though opinions differ, there is a growing consensus that global events and rapidly changing technology have combined to create a perspective among Millennials that is unlike that of their parents or grandparents.
Nowhere is this more evident than in financial markets, where the Millennial perspective is already influencing how assets are put to work. Millennials are demanding more integration of their money and values by seeking personal fulfillment in their careers, applying a global consciousness to their purchases and investing in sustainable, impactful business models.
They may be the first generation to recognize that ‘all investing is impact investing.’
“NextGens are saying we need to look at opportunities; investing rather than divesting,” said Philippe Cousteau, President and Co-Founder of EarthEcho International. “This is a positive opportunity. It is an empowered mind set.”
“NextGen,” “Generation Y,” or “Millennial,” refers to the approximately 80 million U.S. individuals born between 1980 and 2000. Millennials are the largest generation in American history, with approximately 20 million more people than the Baby Boomer generation.
The oldest in the generation are now entering their 30s, and experienced their formative years around the turn of the millennium. While other generations were forced to adapt, Millennials have always known rapid globalization and technological innovation. Millennials are the first generation therefore to be “truly global,” sharing experiences across cultures and geography, connected by technology more than any generation before them.
Critical Factors Shaping the NextGen Perspective
Consider the major events that occurred in their relatively short lives; Millennials have experienced major boom and bust periods, including the prosperity of the nineties dot-com frenzy and the financial markets’ collapse in 2008.
On the other hand, they’re the children of the Baby Boomers. By many accounts, they’ve been insulated from the world, coddled, celebrated and awarded trophies simply for participating. At the same time, technological advances and the proliferation of mobile and social media have provided them with unprecedented access to information and networks.
It all adds up to a generation that is confidently self-directed, but seeks out expertise from a variety of sources. For those interested in understanding this new perspective, it is important to peel back the layers of the NextGen worldview and the circumstances that influence them. Here’s why.
Wealth Transfer to the Millennial Generation
A tremendous shift of financial and generational influence is on the horizon. It is estimated that over the next several decades, $30 trillion in financial and non-financial assets will pass from Baby Boomers to their heirs (including Millennials) in North America alone.
They’ll look to put those assets to good use, with the emphasis on good. Articles and white papers have noted that Millennials consider social responsibility to be a major factor in evaluating investments, far more than previous generations, and have a keen interest in impact investing.
“I’m not willing to invest my financial resources in ways that create problems for us to solve down the road,” said Millennial investor Courtney Hull. “It just doesn’t make sense.”
In a phrase, while many of those in the Great Generation sought to work during the week and be a part of community on the weekends, and the Boomer Generation sought personal fulfillment and social change, many of those in the Next Generation seek profit with purpose.
These unique attitudes and investment preferences of Millennials are not a fad, nor are they indicative of an immature approach to investing; they are the logical and engrained response to the global environment in which they came of age. In a world where financial markets have been opaque and unstable, skepticism and caution are survival tactics.
And while they seek financial security, MIllennials want it to happen through sustainable investments they hope will help solve some of the world’s toughest challenges.
“How we manage our money has to reflect our values and vision for a better world,” said Blue Haven Initiative Founders Ian Simmons and Liesel Pritzker Simmons. “As a young couple, this is part of our family’s future legacy—to set an example that wealth is a privilege to be managed for more than personal gain.”
With uncertainty and isolationism feeding fears in the U.S. and globally, fresh views to solve problems are needed more than ever. Fortunately, many Millennials are already bringing creative and impactful solutions through work and play. As they earn and inherit wealth, demand for socially responsible and impact investing will continue its rapid growth among this next generation that realizes that social, environmental and financial outcomes are inextricably linked in an increasingly globalized world.
