On the other end of the spectrum are those who pride themselves on stockpiling for early retirement. Millennials gave the world the Financial Independence, Retire Early (“FIRE”) movement, whose adherents put most of their money in stocks for the long haul, and live frugally while watching their wealth accrue. By the time they have enough to retire comfortably, they will still have enough time to enjoy it. THE MILLENNIAL INVESTOR
They have student debt. They may have invested in an exchange-traded fund – a bundle of securities with a low barrier to entry – because conventional wisdom said it was the smart step for the first-time investor. And then, all of a sudden, the sky went dark. Meanwhile, millennials who started investing right before the recession just don’t trust the market to reward them, Bishop observes. Instead, they flip houses or invest in regional real estate – rental properties, Airbnbs, and small businesses – because the tangibility of these properties is appealing. Plus, passively profiting off community-building projects more closely aligns with the core values of the stereotypical thirty-something than going along with whatever your robo-adviser says. But then COVID-19 froze all nonessential travel and commerce. Sophia Bera is the 36-year-old founder of the financial advisory firm Gen Y Planning. She’s naturally sympathetic toward the generational instinct to make an enemy out of any entrenched idea or seemingly outdated approach. “Listening to the expert doesn’t work, because look where the expert got us,” Bera defines the iconoclasm she sees in some clients. Bera was recently profiled in a pretty bleak article on the unlikelihood her profession would survive the economic fallout triggered by COVID-19. She was, its author concluded, going to be one of the lucky ones – her company seems well set up to survive the setback. Here I can’t help but agree. What sets Bera apart isn’t the way she’s carved out a niche serving up financial advice to the affluent millennial market... It’s how well
Millennials who started investing right before the recession just don’t trust the market to reward them. Instead, they flip houses or invest in regional real estate – rental properties, Airbnbs, and small businesses – because the tangibility of these properties is appealing. Current conditions are discouraging for even the committed FIRE followers, Bishop bemoans. Like everyone else, these lifelong planners are facing a future no one accounted for. “When they see their $100,000 IRA shrink to an $85,000 IRA, they’ll not just think what’s the use in investing – they’ll think what’s the use in saving ,” says Bishop, who’s generally a FIRE fan. LACK OF TRUST Even pre-pandemic, there was a powerful sense of global instability bearing down on the young investors of today, Bishop allows.
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June 2020
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