Date: 2024-04-23 Page is: DBtxt001.php txt00013896
USA / Demographics
Generational Changes
Business Insider ... 'Psychologically scarred' millennials are killing dozens of industries β and it's their parents' fault
Burgess COMMENTARY
171007 ... The fact that an important investment leader like Mark Haefele at UBS can talk for 20 minutes without once making reference to the multiple existential risks facing the world is quite remarkable. Late in the interview (around minute 9) there is some talk about sustainable investing and impact investing ... but it is fairly clear that this is a sideshow to his core thinking about investment
Peter Burgess
Millenial discussion is around minute 8
You might have heard that millennials are a little different.
As my colleague Kate Taylor has noted (see below), their tastes and habits are endangering a whole host of industries. They aren't buying homes. They're not eating at Buffalo Wild Wings or Applebee's. They don't like golf.
But according to Mark Haefele, the global chief investment officer at UBS Wealth Management, a lot of what he has heard about the millennial generation is a 'myth.' Specifically, the idea that they are more of a 'me' generation just isn't the case, he told Business Insider in a recent interview.
Instead, millennials are driving a shift towards sustainable and impact investing, as they search for a so-called double bottom line investment, or one that delivers both a financial and social return. He said:
Haefele: There are many myths about millennials, that they are more of a 'me' generation. This is something that has probably come up since the times of the Greeks or the Romans, that 'Oh, these young kids today, they're more selfish.' In fact, we simply don't see that.
They are more interested than their parents' generation in having an investment that has a social return as well as an investment return. For us, that's a very important distinction. Other ones, around being more facile with technology, those are probably true, but everyone wants to be able to connect with their investment manager through multiple points, whether it's face to face, sometimes you want to do it on the internet, sometimes you want to do it on your phone. Those changes are probably a place where millennials lead, but where many others follow.
-------------------------------------------------------------------------------------------------------------- 'Psychologically scarred' millennials are killing dozens of industries β and it's their parents' fault
Kate Taylor
Jun. 5, 2017, 12:50 PM 714,135
shoppingDavid Goldman/Getty
Millennials are threatening dozens of industries.
They don't buy napkins. They won't play golf. They aren't buying homes or cars. And they're not even eating at Buffalo Wild Wings.
Millennials' financial decisions have been heavily covered by media organizations β something that has infuriated many of the generation, as news that 'millennials are killing' another industry has become a common headline.
'This is just some more millennial-blaming B.S.,' one reader wrote in response to a recent Business Insider article with the headline 'Millennials are killing chains like Buffalo Wild Wings and Applebee's.'
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Millennials, a generation of MURDERERS
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Jun 30, 2016
The Economist β @TheEconomist
Why aren't millennials buying diamonds? http://econ.st/294G6yf pic.twitter.com/a822ggVZrK
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.@TheEconomist you just threw darts at a board and hit 'millenials' and 'diamonds' and shit out 5,000 words connecting them, didn't you?
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When millennials decide en masse against purchasing certain items, from hot wings to homes, it has a measurable, negative impact: declining sales, layoffs, and, in some cases, bankruptcies.
Still, naysayers are right about something.
While millennials' preferences have had a destructive impact on several companies and industries, they had no say in creating the environment that has restricted their income and shaped their financial perspective. Instead, if we're looking for someone to blame, we can target the generation that created a perfect storm for molding a uniquely thrifty generation focused on short-term rewards: baby boomers.
During the recession, millennials were in their teens or graduating from college. In other words, as millennials came of age, they saw their parents' generation plunged into financial distress.
housing crisis foreclosure great recessionREUTERS/Robert Galbraith
'I think we have got a very significant psychological scar from this great recession,' Morgan Stanley analyst Kimberly Greenberger told Business Insider. 'One in every five households at the time were severely negatively impacted by that event. And, if you think about the children in that house and how the length and depth of that recession really impacted people, I think you have an entire generation with permanently changed spending habits.'
As a result, Greenberger says, millennials don't spend as freely as previous generations.
They'll avoid paying full price for clothing, something that is wreaking havoc on retailers like Macy's and Sears. They'll avoid investing in the stock market, having seen how investments can go wrong. If they're going to spend on a nice dinner, it is more likely to be at an independent restaurant that can provide a special experience than at the predictable Applebee's or Buffalo Wild Wings.
Reacting against boomers' financial decisions and spending habits is part of the puzzle in understanding why millennials are making choices that could kill companies that based their business on appealing to established trends. However, millennials' scars are not purely psychological.
student loans debt
Occupy Wall Street demonstrators in New York Cityβs Union Square participating in a street-theater production during a protest against the rising national student debt. Reuters/Andrew Burton
Seven in 10 students graduate from college with student loan debt, owing an average of over $30,000, according to the Institute for College Access and Success β and that's ignoring the massive debt of students who took out loans but did not graduate. As student-loan debt has skyrocketed, income β both for graduates and millennials who haven't attended college β has failed to substantially increase.
With these economic burdens, it is difficult for millennials to save money. Thirty-one percent of 'young millennials,' ages 18 to 24, and 33% of 'older millennials,' ages 25 to 34, don't have any money in their savings account, according to GOBankingRates.
Debt and a lack of money in savings obviously make it harder to make major investments such as buying houses or cars. Couple this with a lack of trust in financial institutions (again, thanks to the recession) and you have a generation that is more likely to spend on experiences or something they can enjoy now, instead of saving up for an uncertain future.
As a result, when millennials splurge, it will be on something like avocado toast β a $10 treat instead of a multithousand-dollar investment that many lack both the money and the faith in the economy to make.
All of this is not to say millennials aren't killing certain industries. They are, as their preferences force companies to adapt or perish.
But when a headline says millennials are killing another industry, it is worth remembering who and what created a generation that has become an industry-murdering machine.
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