InvestingStrategies

Millennial Finance is Multi-Dimensional: Here’s Why

Hipsters, Whipsters & neo-mainstreamers. Let’s talk money.

I’ll do my best to refrain from dwelling on the cards we have been dealt as Millennials. To all intent and purposes, I am probably a mainstreamer. Sure, the occasional lurch to the left as a whipster, I’m often back in line one day later.

Just like every ‘generation’ we like to work hard to work out how we have been dealt our cards – the benefits and drawbacks. Financially and from a general economic perspective, we are set to be subject of delayed financial benefits of inheritance. So much is made of the economic challenges we face so I’ll sum it up as concisely as possible.

Student Debt Is Grim (& Getting Grimmer)

No one wants to be in the starting block with a £28,000 debt and it has meant we are immediately a unique case as a generation. How we pay that debt off and the mindset with which we approach our finances is our first major challenge.

Getting A Job (Or Not)

Unemployment is low, historically low at 4.2% but this is not a true reflection of the country’s employment levels, with the ‘Gig Economy’ and self-employment contributing significantly to the numbers.

Internships, stagnant wage growth and a severe lack of recognition of new skill sets mean getting the right gig is not easy nowadays.

Cost of Living.

Rent is ridiculous.

I’ll leave the generational broad-brushing there. This is about moving forward and doing more with your money. The number one point to take away is that you can always do better. In today’s world of digital financial services and money management tools – the world of financial advice is opening up to all the nooks & crannies of millennial life. So, despite being jobless, roofless and bedraggled with debt – financial brands still want your services.

Millennial Financial Considerations

The government has been responding to all the noise I have mentioned above. Workplace pensions are a nice touch for some, ISA improvements (including LISAs) and a big panic move from financial services, suddenly means we are the centre of attention.

Dreamy? In some ways.

There are a huge variety of different services that help you get on top of your money; as well as some desperate and at times, cringe-worthy attempts from banks to connect with millennials.

On the flip side, the market is hugely fragmented and picking out what is right for you in achieving your personal goals can be tedious.

It is important to be aware that this is a commercial push from corporates, not a social one. Corporates and start-ups are now targeting younger generations as they are set to inherit more money than any previous generations.

I’m a firm believer that most of what our generation is saying and doing is authentic.

Social media obviously paints a deluded picture of most of us but in terms of understanding the social implications of what we do, eat and say – in a wild generalisation — a significant number of people are better-informed when it comes to the consequences of their actions.

People are able to share and distribute information quickly, which is driving an instantaneous response. The point being, I don’t see ethics as the fad or fashion as is often claimed.

Ethically-considerate decision-making has grown in popularity because Millennials are more diverse in their thinking and decision-making is multi-dimensional. The rate at which we consume information allows us to making informed decisions far more quickly and the same applies to investments. Ethically farmed (free-range) food is more popular because concerns around battery-farming conditions have been shared on all social channels. People will pay for quality if the information is clear and the story transparent.

And yet the banks don’t…or haven’t been.

What Do Millennials Want From Their Finances?

They don’t tell us where they put our money every month and they don’t explain what our investment is doing for the world.

Wouldn’t it be charming to see the inner-workings of your money? Just some information about what banks are doing, the stories they are telling? Some are trying but I think we stopped listening years ago.

Triodos Bank shared some research recently. Millennials want their money to make a positive change to society and the environment but they have never been offered the opportunity to invest ethically.

  • 63% would like their money to support profitable companies that make a positive contribution to society or the environment.
  • (60%) said that they would move their money if they discovered it was being invested in companies that conflicted with their personal values and ethics.

Nothing we don’t know. But there are a number of financial brands that put their backs into long-term ethical value, you just need to look or in our case, get someone to look for you. Check out some of these:

  • Abundance (investment)
  • Alliance Trust Sustainable Futures (investment)
  • Charity Bank (savings)
  • EQ Investors (investment
  • Rathbone Greenbank (investment)
  • Triodos (savings and investment)
  • WHEB (investment)

IF you wanted to invest directly into some funds, MorningStar recently picked out these funds as their Top funds for Ethical Investors:

Saving and Investing

Our thing at Lumio is all about instilling financial confidence into the world. Empowering you to take control of your financial destiny.

We’re not looking to create the next top algo-trader, we’re just looking to move the conversation away from squirrelling acorns and towards growing your savings.

Savings accounts are a great start but what if you’ve got bigger aspirations, appetite for risk and bigger plans?

Cash in the bank account is a nice start – no risk, protection from the Financial services compensation scheme, easily accessed and you have some nice options with Cash ISAs which are tax-free. But… and it’s a big BUT – interest rates on bank accounts and savings accounts are pitiful at present and you might as well be stashing it in the floorboards.

If you’re interested in learning more about investment platforms or robo advisers – check out our comprehensive guide on everything you need to know about robo advisers.

But if you think you’re ready… we have done the hard work of gathering the information you need to compare the digital wealth managers that can manage your investments for you. Just remember.

Your money can fall in value and investing in the stock market is risky. You should be willing to lock this money away for at least 4 or 5 years minimum to ensure you have the time to ride the investment waves. 

CharlieWP
About author

Fully qualified CISI Investment adviser for 6 years. Managing high-net worth private client portfolios as well as whilst providing Equity insight for numerous publications. Brains behind Spotlight.
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