Millennials are digital natives, entrepreneurs – the #YOLO generation. We are the largest generation in American history; at 92 million strong, we have 19 percent more members than the boomer generation.
Millennials are going to revolutionize the workplace and the world. Or are we?
Behind our cultivated social media selves, millennials may be the most risk-averse generation in America today. Instead of leaping into ambiguity, we opt for the sure bet. We pick the crowdsourced opinion and the route that ruffles the fewest feathers.
The millennial quest for stability drives everything from millennials’ willingness to take on debt for college to the types of careers we seek to how we invest.
The quest for stability led millennials to college and debt.
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Most millennials will be familiar with the Brookings Institute’s Lifetime Earnings chart, like the one I saw a few months before I packed my bags and headed to pursue a university education.
It demonstrates that education leads to higher lifetime earnings, to the tune of $570,000.
However, these charts leave off the average $35K debt loads that many millennials required to secure their degrees. These charts also don’t compensate for the fact that these lifetime earnings charts reflect boomers’ earnings rather than millennials’.
When the eldest boomers reached the 25 to 34 age range, they earned 27 percent of total wages in the United States. In stark contrast, millennials earned a mere 17 percent of total wages last year when the eldest of our generation turned 25 to 34.
Millennials grew up in an era of unprecedented affluence. We believed that the safest road to comfortable work/life balance was through a college degree.
Unfortunately, as of 2013, 48 percent of employed millennials worked in jobs that didn't require degrees.
One-third of millennials regret the decision to attend college. But our disappointment is largely due to the fact that student loan debt adds instability. Plus, education hasn’t shown a clear return on investment. Our ticket to safe and secure jobs did not pan out, but we still lust after stability.
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Millennials Seek Career Clarity
To compensate for high debt loads, millennials seek stability through career clarity. Employers aren’t tripping over themselves to hire new college graduates. But savvy millennials create their own career stability through clear direction and upward growth.
Barrett Kelly of Oberlin College explained, “The biggest factor for careers is trajectory. Choosing the right job right after college is monumental in my mind.
As someone who is very career-driven, I want to be put on a path that can only lead to success … A stable job for me is one that I know will lead me to the place I want to be. A job that I know will lead me to a successful career.”
For Kelly and other millennials, stability isn’t about holding the same job for years at a time or about being a “company man.”
Career stability requires a clear direction for advancement and growth.
Seeking this stability is a double-edged sword. Forethought and planning mean that millennials do the work required to advance in their careers, but it also means that millennials may be content to settle for slow advancement when risk could pay off.
For example, despite entrepreneurial aspirations, millennials aren’t starting new businesses. While millennials have a strong desire to start their own business, only 11 percent of them plan to start one in the next year, the Kauffman Index of Startup Activity Policy Brief shows.
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Millennials start their quest for career stability even before they graduate from college. Ali, an upperclassman who asked that I didn’t use her real name, weighs costs and benefits while deciding between a paying job and an unpaid summer internship.
The unpaid internship may allow Ali to differentiate herself in a competitive field. But a job offer is a long shot. On the other hand, the paid job will give her the financial confidence to launch herself post-college.
Millennials who want career stability need to focus on more than excellent performance in school or in their current role; they must actively look for the next one or two opportunities as they seek to stay ahead in an ever-changing economy.
Given the current economic landscape, career stability within a single company remains in the realm of fantasy. But future-focused millennials have a chance to create career stability by cultivating high-demand skills that keep them in the hunt for their next position.
Millennials Seek Safe Haven Investments
Given millennials’ appetite for stability, it comes as no surprise that, according to a Wells Fargo survey, 41 percent of millennials do not consider the stock market a good place to invest for retirement. Of millennials who have invested for retirement, 30 percent are invested in all cash.
Cali Slepin of Oberlin College explained her view of investing risk by saying, “When the recession hit, fairly stable stocks plummeted to nothing. Clearly there is an amount of risk taken when investing in the stock market, but it’s the market trends that dictate a larger loss even with diversification.”
Fellow millennial college student Jane (who also preferred her name be changed) explains, “The thought of relying on this investment for my future, knowing that at any time the money could just be wiped away, really scares me.”
As millennials shift their focus from debt repayment and bills to growing wealth, they will need to focus on developing the psychological tools that will allow them to beat inflation, the silent wealth killer.
Without any risk tolerance, millennials won’t be able to get ahead.
Of course, risk aversion may lead many millennials to smarter, better-balanced portfolios. Safe haven investments like bonds and cash are important tools with which to develop portfolios with longevity.
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