How Millennials Could Be the Next Greatest Generation of Personal Finance

This post is from an article on The Art of Manliness and ties in with an article they did and I blogged about a few months ago:

Articles written about the financial woes of Generation Y tend to follow one of two pervading narratives:

1) Millennials are lazy, entitled narcissists who have brought their problems on themselves by not being ambitious, hard-working, and independent enough.

Or

2) Millennials came of age during the biggest financial crisis since the Great Depression (caused by the hubris of entitled, narcissistic Baby Boomers, of course), are saddled with massive student loans, and thus have the deck impossibly stacked against them. (And if they are a little coddled, well, who raised them to be that way?)

 Here is where the article ties in with the previous blog post:

According to the Strauss-Howe theory of history, similar geopolitical and economic events, as well as generational archetypes, repeat themselves roughly every 80 years.

Within that 80-year cycle (or “saeculum”) are 20-year mini-cycles (or “turnings”) which each witness distinct sets of events as well as cultural moods. They are most easily thought of like the seasons of the year: The first turning (“spring”) is a “High” period in which institutions, optimism, unity, and progress are strong. The second turning (“summer”) is the “Awakening” period, which seeks a rejuvenation of the inner worlds of art, religion, and values. The third, “fall,” is called the “Unraveling,” as the culture fragments and institutions become dysfunctional. The fourth turning is a historical winter — a “Crisis” period in which there is typically economic turmoil and war. Then, spring comes once more.

Moving through these four seasons are four generational archetypes (Artist, Prophet, Nomad, and Hero) whose characteristics are shaped by the turning they pass through as they come of age. For example, during a fourth turning, those of the Artist generation are little children, those of the Hero generation are young adults who serve as “foot soldiers” in the fight, middle-age Nomads lead Heroes, and older Prophets impart vision and values for navigating the Crisis.

The last Crisis began in 1929, ran through the 1940s, and was driven by the Great Depression and WWII. The young adults who grew up in financial straits and fought the war on the ground were the last Hero generation.

Over the past eight decades the wheel has spun round once more, so that we again find ourselves in a fourth turning. This one, according to Neil Howe, co-formulator of the generational cycle theory, began with the financial crisis of 2008.

The cohort coming of age during this Crisis period are, of course, Millennials, who find themselves in the position of being the new Hero generation.

Although in the previous post we don't talk just about finances...we also talk about war. Is another war on the horizon? I'm not sure, but I personally think the prospects are pretty high and seemingly getting higher all the time.

What are some of the hurdles facing millennials?

• Millennial income is stagnant and will likely remain stagnant for two decades
• Millennials are laden with debt
• Millennials are financially dependent on parents
• Millennials are financially fragile
• Upward economic mobility is decreasing

But there are some hopeful signs:

• Millennials are savings more than other generations
• Millennials are more careful about credit card debt
• Millennial entrepreneurs have a committed, long-term, legacy-minded view of their business

Overall, Millennials are happy with what they’ve got; 9 in 10 say they currently have a sufficient amount of money.

Even though it doesn't mention it in this article, millennials are very open to network marketing. Check out this article by my friend, Jackie Ulmer, that talks about the subject.

There will be more to come from AoM and probably from me:

Despite the economic challenges they face, Millennials remains stubbornly optimistic about the future. As one study found, 67% “believe they will achieve a greater standard of living than their parents” and 72% “say they feel in control of their future and believe they can achieve their goals.” (It should be noted that Strauss and Howe predicted this characteristic optimism of Generation Y more than twenty years ago.) That may sound naive, but they actually have great reason to hold such hopes. If the Strauss-Howe theory turns out to be true, and if we are able to navigate successfully through this Crisis period, in about a decade or so we’ll find ourselves in the midst of another High. An economic boom period like the 1950s that the last Heroes enjoyed after twenty years of hardship and strife.

That doesn’t mean though that we should just sit on our hands and wait for 2028 to roll around. Developing and deepening a commitment to the principles of sound personal finance now will not only help us weather the current storm, but prepare us to deal with what is in many ways an even greater challenge: robust prosperity.

Next month we’ll lay out suggestions for how our generation can do just that, and surmount the challenges laid out above. ‘Til then, keep living simply and saving your dollars, and remember the motto that helped our grandparents endure their winter, and advance towards spring: We did it before and we can do it again.

Interesting days

Today -  Lame Duck Day and Frozen Yogurt Day

Tomorrow - Ballet Day, Wave All Your Fingers At Your Neighbors Day and Send a Card to a Friend Day

Next Monday - Get A Different Name Day, Tortellini Day, Radio Day, Madly In Love With Me Day, Clean Out Your Computer Day and Employee Legal Awareness Day

March 6 - Frozen Food Day, Dentist's Day, Fun Facts About Names Day and White Chocolate Cheesecake Day And be sure to check out this recipe!