October 2024
• Millennials generally see money as less tangible, trusting credit cards and cryptocurrency more than Boomers.
• Boomers see money as real and finite, largely due to experiences in the post-WWII economy. Usually, they emphasize saving money and preparing for the future.
• Millennials typically prioritize experiences and memories over long-term financial security.
• Boomers and millennials also view debt differently, as millennials often view it as a necessary part of life with student loans and rising housing costs. Meanwhile, boomers generally avoid it as much as possible and may feel uneasy about the idea of “good debt” (like leveraging debt for investments).
• Understanding each generation’s experiences and mindsets can help families bridge communication gaps. It's important to understand that both generations have valid beliefs and can learn from one another.
Looking to watch more of the live sessions from our 2024 Investor Symposium? Stay tuned as we release more episodes like these in the coming weeks such as Replacing Income in Retirement, CA Housing Market Predictions, and Liquidity: Blessing or Curse?
Watch previous episodes here:
Ep. 108 Investor Symposium Spotlight: Key Moments with Our CEO Jeff Sarti
Ep. 107 What's Behind the Fed's Interest Rate Cut?
I'm Stacey McKinnon. I'm the chief operating officer and chief marketing officer here at Morton Wealth. And I'm joined by my colleagues and advisors, Beau Wirick and Priscilla Brehm, to talk about a topic that's really near and dear to our hearts, because it's how families communicate. And so when you're reading the agenda, you might have thought you came here to talk about how different generations view money, and we are going to get on that.
But the reason they were talking about that today is because we want to help different generations learn how to communicate better, understanding how the background of how they grew up impacts how they view money. And I was having a conversation with a client who's in their 70s a few months ago, and they were sharing with me that they were very frustrated with their son because he spends too much money.
Her son is a millennial, buys too expensive cars, goes out to too nice of restaurants, is not saving, and they were so frustrated by this. And then the same week I had somebody come and chat with me. It was a friend who's in their 40s and they said, my parents, who are in their 70s, they don't spend enough money.
They don't buy themselves things. They don't go on vacations, they don't do any of that. And this is actually pretty common that we hear from our clients where a parent is frustrated with a child for spending too much, and a child is frustrated with a parent for spending too little. And so we are going to navigate this today.
And I'm very excited because Priscilla has volunteered to be the boomer parent. But, and Beau has volunteered to be the millennial, although Beau and I actually like to call ourselves elder millennials because we're at at the top of the generation.
Don't pull me into that. You like to call us elder?
I do like the guise of an elder. And before we get started, though, I thought that it would be really good to just give you an overview of kind of the background behind both these generations. So hopefully this works. Oops. Do you know if the clicker can click forward for me? Oh yes. Oh there we go. So let's just start with the Boomer for a moment.
So there's big events that have happened in a baby boomer's life. The reason that they're named boomers is because of the booming economy that came out of World War Two. And while they've experienced political unrest and some wars, boomers are now generally known to be optimists. Incredibly hardworking, conscientious savers, and they've actually built a significant amount of wealth way more than the prior generation.
The story for millennials, though, is a little bit different. So for millennials, when we graduated college was when the great financial crisis hit. And so our first experience in adulting, meaning becoming adults, was it went in an environment where there were no jobs. In addition to that, millennials are highly influenced by TV movies, all of that. And so we basically think about the financial markets in terms of the Big Short and The Wolf of Wall Street, like those are the things that have framed our perspective on money.
And we tend to be less trusting of financial advisors in general. We actually feel that unless we know someone we trust in finance, we'd rather trust ourselves and do it ourselves via Google Google advice. And so this is the general generation that we're kind of navigating through. And in addition to that, millennials tend to want to spend more money.
They're really interested in experiences and memories. So we spend to we tend to be a little spendy. And we have actually created a lot of memories for our ages. But the jury's still out if that's actually going to set us up for retirement. So we are going to navigate this today together. But I want to also say that these are generalizations, right?
Not depending on how you grew up and your life experience. That could be very different. But I'm going to ask Bo and Principle a series of questions, and they're going to kind of get into it with us. Okay, so I have an easy question for both of you to start. I'm going to hold up two different items (credit card and cash), and I need you to tell me which one is money.
First of all, tell me a little bit about your view of money and why you chose the dollar.
Well, I chose the dollar because that's real money. And, anyone who's a baby boomer, you probably had the experience of hearing from your parents how short real money was during the Great Depression, and how they worried about not having enough money. And so that had a major influence on us as baby boomers growing up as as children.
And so, you know, the thing is, when you have real money that you can pull out of your wallet, you can say, okay, I know exactly how much I have, and if I want to buy that thing, I can take money out of my wallet. And I know where I am in terms of, you know, my cash balance.
And, there's another form of money that baby boomers, at least, we used to use. And that was checkbooks. Yeah. Some of you in the room may not recognize what this is, but this is, it's kind of like an a long playing album, right? You would have your balance. That was in the checking account. You'd write out your checks, subtract it from the balance, and you knew exactly where you were.
So every transaction that you did, whether it was a check or with cash, you knew where you were financially. And I think for baby boomers, that was incredibly important. Especially coming out of the, the instability and the insecurity that the Great Depression, you know, had on our parents. So those, I think, are two really good forms of money.
Not sure about the rest of that.
Yeah, but tell us about what else we think money is.
I think you see money evolve with technology a lot. And I think as millennials, we we kind of see money as fake, to be honest, not real. It's not real. It's just ones and zeros on a balance sheet ledger at a bank. It's why we love Bitcoin so much as a generation, because it's basically a referendum on the fakeness of fiat currencies.
And just to give a visual on that, I went, checked out at Whole Foods the other day, and I actually used the force to check out. You just wave your palm over this reader and it just automatically debits your Amazon account or credits your Amazon credit card because you get the 5% back.
You just hold your hand over and it reads the uniquely identifiable palm that each of us has. And, and that's how you check out. That's the potential future.
Do you have to be careful about who you're waving to when you. I'm a little worried. I don't know, the.
Force has to be strong with your family. Okay with you use work. Yeah.
So. Okay, so all joking aside, I mean, these are just two simple examples of how you have two different perspectives on money.
There's one where we have the same perspective. Okay. Gold. Good pluck. This is, it's interesting that Grant talked about gold a lot. This is a quarter ounce of almost pure gold. It was minted in Australia. This retailed yesterday for $900. It's about the size of an American penny. And millennials, correct me if I'm wrong, Bo. You like gold a lot.
It's also a referendum on the problems with fiat currency. So yeah I think I think we do like gold.
So here's an ounce. That's one ounce of gold that well, whatever, whatever the price was today. So but here's my problem with gold, in physical form, I have trouble accepting that this is worth $2,600 plus. And so perception, I think, when it comes to money, is just incredibly important.
Well, it's similar to when you held up the dollars. You can feel those dollars and you know what you're going to get for it. So I understand that. Well, why don't we just give everybody a overview of like the general attitude towards money. We talked about what money is, but talk about the attitude towards money of each generation.
And maybe you can start.
Yeah. It's worth repeating that I think as a generation we just don't think that money the system of money because really, you know, money is just an agreement between all of us. We agree that gold is valuable. We agree that US dollars are valuable, we agree that Bitcoin is valuable. And so I think our view that money is fake really informs our perspective on how we use it, how we save, how we invest, and how we spend and I think as a generation, we we came to adulthood during a time where the financial system collapsed.
I graduated college in May of 2008, right after the Lehman Brothers, collapse. And subsequently the entire world freaked out and everything that we had been taught about money in the financial system up to that point really came under a lot of pressure. And, and so we started questioning whether or not the system works for us.
What about you personally?
Well, I think money is real. But I think in order to get it as a baby boomer, you have to work very, very hard. And with hard work comes money. That was, you know, one of the things that that was pretty clear. And the other thing about money is that it's great to earn it, but it's even better to save it and invest it and secure a future not just for ourselves, but also for our family.
Yeah, the baby boomers are much more likely to have that perspective where I think one thing that happens, for millennials and you may talk about this later, is this thing called YOLO. You only live once. And, we tend to and, you know, building off of those comments that money isn't real. We tend to favor life experiences and memories, and saving feels like something that will happen in the future that we're not really thinking about yet.
And I should probably clarify that as advisors, Bo and I don't have this perspective we're sharing with you. That's the general like, please, like we will not tell you to spend all your money. And that's not the point here. But I think that it's worth noting that, one of the reasons money doesn't feel real to us is because we feel like we've never had enough.
And I think that came from graduating college in the great financial crisis.
Yeah, I think as a generation, we're just playing a lot of catch up. We see our parents who, are wealthier than us, generally speaking, and we see, friends of ours who are wealthier than us. Just a little bit of statistics on this, and sorry to get into the numbers, but when Priscilla's generation was 35 years old, the boomers, they had about 30% more wealth on average than when my generation was 35 years old.
So just as a whole, as a cohort, we are a poorer generation than our parents. At the same age, however, we're really a tale of two generations. The top 10% of millennials are 20% wealthier than the top 10% of baby boomers were at the same age. So the distribution of wealth among millennials looks a lot steeper than the distribution of wealth did among baby boomers.
And so everybody in this bottom 90% of millennials is playing catch up with their parents. And catch up with their peers.
Yeah, that's really helpful. Good perspective. Okay. We talked about the general economic conditions for each of you. But why don't you tell us how you were personally raised to think about money? And, Priscilla, I'd like to start with you.
Well, personally, I was raised on, a small farm in Iowa, and, so we always knew that we would have food on the table. There was never a question of that. You could just go out to the hen house and get some eggs. But what we weren't sure of is whether there was going to be cash to buy new shoes for school.
And so, my parents taught me that it's really important to plan ahead and save cash while you have it, because then when you need it to buy those new shoes, it will be there. And, the other thing that they taught us was, that debt was, maybe necessary sometimes, but kind of an evil necessity. My dad, for example, had to borrow every spring to buy seeds, you know, to plant.
And so he would call the local banker and say, you know, Chuck, it's Rex. Could you put X dollars into my checking account and I'll come in tomorrow and sign the paperwork. And, and then we would pray for a good growing season and pray for good. You know, harvest and good prices when we sold that. And then he would go in and pay off the bank.
So it was a very different sort of thing. But I think for many boomers, our parents taught us to, to try to treasure money and kind of keep it close. And I think that's why so many of us, as we, get into retirement and, and so on, we have a little trouble letting go and, you know, maybe flying business class instead of economy.
So that was those were the big lessons my parents taught us. And I think that's typical of the generation.
Yeah, I've seen that a lot.
My parents are in the audience. So I will talk about our parents collectively. Our parents taught us that we can do anything right. You can do anything that you want, anything that you want to grow up. You can. You can do. And so if you think about it on like Maslow's Hierarchy of needs, millennials grew up in the 80s and 90s, arguably the most peaceful and prosperous time in all of history in the US, between the Cold War and 9/11.
I mean, nothing happened that was bad. And so we we came of age with this sense that we can achieve anything, and that sustenance is not enough. We don't want to just put food on the table. We want to do something that matters. And so, if my mom's if my mom had wanted to be a television actor, there's no way that her dad was going to drive her up to LA for auditions when she was 12, my mom did drive me up to LA for auditions when I was 12 because I wanted to be an actor, and that's a stupid thing to do.
Like, sorry, that's a really, really bad financial decision. I was one of the lucky ones who succeeded, but that was that's ingrained in the millennial generation. Is that you can do anything. What you do matters, and it's not enough to just get by. You have to matter. You have to do something that, exceeds your expectations. So we aim high and and often fail.
And in some ways, I think that what you're saying is, like millennials were taught to think beyond the money, right? Which might also add to our, perspective that we should spend more and experience more.
Right? 100%, I think. I think the you can do anything you want. You can be anybody, anybody that you can obviously you get to a certain age where that turns out to not be true and reality sets in. But we still have this idea of we want to experience the world to a greater degree, and have better experiences than, our parents generation.
So we're going to Europe in our 20s instead of our 50s. We're doing we're doing careers that bring, joy to us or we want we care about the environment. We care about making a change in and, geopolitics and that kind of thing. It's not enough to just make money and save it.
Fascinating. Do you have a comment?
Yeah, I have a comment. As a boomer parent, we were at my Tim and I were perfectly willing to work really hard and save early and save often and maybe defer some of the some of the current me experiences because we we wanted time to be our friend when it came to investing and saving. And, we were willing to put in the work to secured an early our future, but also so that our kids would not have to work as hard.
And so I think a lot of boomer parents maybe, I don't want to say resent that their kids are having such a good time.
Maybe a little.
On behalf of the millennials, thank you for the blessing.
Go for it.
Okay. Just for the sake of time, I wanted to talk about the job market, but I think maybe what is even more profound in the differences between boomers and millennials is debt and how we deal with debt. So maybe both, starting with you, share kind of the millennial perspective on debt, maybe some of the pros and cons.
Well, like I said before, the millennials really is a tale of two generations. You've got the top 10% and you've got the bottom 9%, 90%, and for wealthy millennials, debt has been extraordinarily productive. We've grown up in a very low interest rate environment. From 2009 until 2020. And for those who have had access to debt to be able to use as a tool to invest, if you can borrow at 2% and invest in real estate, that goes up, you know, at leveraged 5% per year, or you can invest in the stock market that's average 15% per year.
You've been able to gain so much wealth as a millennial. The millennial generation doubled its wealth from 2020 until now from 5 to 10%. So we have capitalized on debt so much, but the bottom 90% sees the top 10% on social media living their best life. And we want to be just like our friends. And so we're going to YOLO and YOLO and YOLO and borrow at 25% interest on our credit cards so that we can go to Europe just like Michael did.
And then I can't pay off the 25% credit card. And so it's creating an even greater wealth disparity within our generation. This keeping up with the Joneses aspect that we have. But technology, it's you guys have no idea what it's like to be young with social media. It's so hard to not compare yourself and want what they have.
Well, it can be dangerous because here's the thing that doesn't go away. You use debt to buy a car. The car might break down or wear out, but the debt is still there. Same thing with the house, same thing with an experience. Or, you know, that lovely vase that you want to get for your living room and and so debt it can help build wealth but can it also destroy wealth.
So I think the thing about debt is understand how it works for you and for your situation. And what are you going to do to, to systematically handle that debt? And what role does debt play in your life? So, it's it's very dangerous, but it's also extremely useful.
It's very wise advice. All right. To wrap up, I wanted to just ask one more question of each of you. So one of the things that we talk about with our clients is a dynamic we call current me versus future me. Current me would like to spend the summer and Lake Como every year, but future me thinks I should retire someday like I have to retire someday.
So I have to think about future me as well. And we find that a lot of times, we choose one or the other. We either are all about current me, or we're all about future me. And so I would love for both of you to just share your perspective on this. But then maybe some advice for each of your generation on how to balance the current me versus future and me dynamic.
We are a very current me generation. You know, when I turned 30, it was very in vogue to say 30 is the new 20. I'm going to turn 40 pretty soon. 40 is not the new 30. This this trope has expired and but there's something to that. I think my generation, the reason that we've been current me for so long, is one we're playing catch up, trying to extend our youth and to we just have a longer life expectancy.
I fully expect myself to live to age 100, and so the adolescent years get extended, waiting until, this age to get married, waiting until this age to have children. And another, another part of that is wanting to have, or probably necessity by necessity, having multiple careers. And so all of those dynamics really paint a current me picture.
I just want to experience things in the now, because future me is really far off. And thank you. And I think that's the lie that Future me is really far off. And my advice to the millennial generation is that the distance between current me and future me is a lot shorter than you think it is. You really need to start paying yourself first and investing.
And then through financial planning, invest in current me. After you've given future me, what future me needs good advice.
Well, as a boomer, the future me is here. It's.
Like, right now. And so my runway is quite a lot shorter than Bose is. But I'll tell you what's really difficult again, is, is to give myself permission to enjoy the fruits of my hard labor. I think we we've got enough, you know, that my kids are going to be okay. And my husband and I can now really have fun and enjoy being current me for a change.
So I think the key though is to find balance. And everyone's balance is going to be different. So please don't judge your children's balance versus your own balance because they're both valid. And if you are my age or younger or a little bit younger, a little older, I would say try to shift a little bit to the current me mindset, because you really deserve it.
I love that. That's very beautiful. Thank you. I just want to share really quickly as we wrap up, the purpose of us having this session again is so that you could see the different perspectives of different generations, the way Priscilla grew up, what she had in front of her formed her opinions on things like debt and money and how she spent the way Bo and myself have grown up have essentially shaped the way that millennial generation has thought about money, debt and how we're spending.
And we all have these external factors that aid in our decision making. So when you go home and you have dinner with your families, please take into consideration all of the different dynamics that are happening, and we hope that this leads to more fruitful conversations. So thank you all.
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