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The media paint a very bleak picture when it comes to young people’s financial prospects. But there is another story that needs to be told: a story of a new generation of self-made millionaires.
Yes, millennials and Gen Zers face some unique challenges. They are coming of age at a time of economic uncertainty and growing inequality. But make no mistake – they are also a generation taking their own destiny into their own hands. From savings and spending habits to crowds and investing, today’s young people are determined to build a better future for themselves.
And they succeed. Despite the challenges they face, more and more young people are becoming millionaires. In fact there are now good over 600,000 millennial millionaires only in the US. In the UK, the number of Millennial and Gen Z millionaires has risen doubled over the past year, with many more on the way with higher wages.
What is driving this trend? A combination of factors, including better access to information, technology and capital. But most importantly, it’s a mindset shift. Young people today are not content with waiting for handouts or hoping for the best. They take matters into their own hands.
Consider “Gen Z VCs”, a 14,000-strong group of youth in the VC industry. Or the twenty-somethings who take advantage of the sharing economy to earn a six-figure income. These are just a few examples of a new generation of go-getters who are rewriting the rules of success.
Related: The Necessary Financial Management Guide for Young Adults
Young people save earlier
One of the most important factors in building wealth is to start saving early. And that’s something millennials and Gen Zers are doing en masse. A recent research found that 35% of Gen Z plan to start saving for retirement in their 20s, and 71% plan to pay for college with money they earn from working.
Moreover, younger people are increasingly aware of where they put their money. They also don’t use traditional solutions – many invest in alternatives such as peer-to-peer lending and cryptocurrency, and whopping 94% use internet banking.
Of course something can always go wrong. But by playing an active role in their finances, young people are getting ready for a bright future.
They are also rethinking debt
In recent years there has been much talk about the ‘millennial debt crisis’. And it’s true that student loan debt is a huge burden for many young people, but instead of giving up or going bankrupt, millennials are finding creative ways to manage their debt.
For example, a LendingTree Study of more than 340,000 users showed that millennials reduced their average debt amount by $9,117 between 2019 and 2021, while Gen Z reduced their debt burden by $2,500. By comparison, boomers increased their debt by $8,848 over the same period.
Related: How 15 People in Their 20s Built a Multimillion-dollar Business
They build side activities
In the gig economy, side hustles are increasingly becoming the norm. And nearly two-thirds of Gen Z have started, or plan to, start their own businesses. Furthermore, almost half of Gen Z has multiple side activities.
What is driving this trend? Economic insecurity and the desire for a more balanced lifestyle certainly play a role. But whatever the reason, there is no doubt that sideline activities can be a great way to earn extra money and achieve financial goals.
They get creative
Gone are the days when the “60-40 split” was a gold standard for retirement planning. With consistently low interest rates and rising life expectancy, Millennials and Gen Zers need to get creative with their financial planning.
Alongside the new generation of venture capitalists, young people are investing in truly unique asset classes such as luxury and streetwear pieces, fine wine, whiskey, art, and of course cryptocurrencies. They are also not afraid to think outside the box when it comes to their careers. From ‘digital nomads’ working remotely to ‘solopreneurs’ building their own businesses, young people are rewriting the rules of work.
Further, while the term “VC” may conjure up images of old, wealthy white men, the reality is that Gen Z and millennials are entering the space on a large scale. These fledgling VCs are taking advantage of the market downturn by investing in early stage companies at a discount, aided by platforms that democratize the asset class, such as Gridline. Gridline is a digital wealth platform that offers a curated selection of professionally managed alternative investment funds with a low capital minimum.
Ultimately, there is no doubt that millennials and Gen Zers face some tough challenges. But instead of waiting for someone else to solve the problems, they take matters into their own hands. And that’s something we should all be excited about.
Related: How Generation Z Is Changing The Face Of Entrepreneurship Forever