How Millennials Invest
It’s official, millennials have surpassed baby boomers as the nation’s largest living generation in the United States. People who were born in and after 1980 are considered to be millennials, and their most unique traits are their love for technology, social media, and instant gratification. Millennials were there to witness the most recent stock market crash, have racked up billions in student loans, and turns out they are also getting extremely interested in investing. The importance of understand how millennials invest boils down to the fact that they are about to be the largest generation of commercial real estate investors.
The millennials are a force to be reckoned with not only because of their size, but because of everything they know. According to a Pew Research Center survey, 40 percent of this young group is still in school, 19 percent have college degrees, and 30 percent say they plan to go back to school and receive their college degrees. In addition to being highly educated, these young people have never lived without technology, and are also the most ethnically and racially diverse generation in American history. This creates a very interesting dynamic when it comes down to how millennials spend and invest their money.
It has been said time and time again that the millennial generation is the “participation ribbon” generation. Everyone gets a trophy and everyone is special. While it has been proven that millennials perform better in a work environment when they are praised, it is also true that this generation is extremely confident. In fact, according to a Pepsi Refresh Optimism report, 65 percent of millennials chose the word “optimistic” to describe their feelings about their future, 57 percent chose the word “excited,” and 95 percent reported that “it is important to have a positive outlook on life.” That kind of confidence and positive attitude about their futures is exactly why millennials will make such excellent and profitable commercial real estate investors.
Last year, Millennials finally hit the mark for the largest generation in the workforce, according to analysis of U.S. Census Bureau data. So, as millennials continue to creep up the corporate ladder and pay off their tremendous student debt, there is no doubt that they will take initiative to spend money in ways that will make money. What will be the largest factors in how they invest in commercial real estate?
According to the BNP Paribas Wealth Management report, millennial entrepreneurs have launched about twice as many businesses at almost a decade younger than baby boomers. This is highly attributable to their high confidence levels and their long-time access and experience to the internet. Millennials are business-savvy young people who will only continue to grow. Having this young and valuable experience gives them the upper hand when it comes to knowing how the business world works. They understand what businesses need, how they spend their money, and how to talk about it. This only increases their chances of being involved in commercial real estate on both ends. They know how to make money and they want to spend it in order to make more.
As mentioned before, Millennials have never lived without technology. They thrive on being connected and instantly gratified with all information they could ever need with the click of a button. When it comes to online shopping, there is no limit. That means, that as far as investing in commercial real estate goes, they want to know everything there is to know about a property, see pictures, and get all the facts immediately. They see not being connected online or through social media as a negative and choose to avoid anything that is not worthy of the worldwide web. So anything they are looking to invest in needs to be showcased online. This is also a tremendous marketing strategy for other millennials, as they are so socially connected online that just by sharing a link to a property can generate a huge amount of traffic and increase profitability.
This goes hand in hand with the Millennial love for technology. With social media hitting an all-time high of popularity, came the rise in reviews. Millennials are accustomed to everyone having a voice and being able to express their opinions on things openly. They want to tell everyone what they think of something and before trying something, they want to know what everyone else thinks about it as well. As far as investing in commercial real estate goes, millennials want to hear personal stories from people with either the same experience, or a similar one. They live off personalization, so when purchasing an investment, they want to hear the reality of other investors. And in turn, they will want to tell their investing story to as many people who will listen.
« Previous Next »