Megatrend 6 – Catering to the Millennials
One of the sure ways of feeling old is when you start receiving CVs from people born in the nineteen nineties. The more I see of this millennial generation, the less I believe that we have been born on the same planet. They seem to think and act in very strange ways that contradict so much of the way we baby boomers have lived our lives. The overriding sense I get from them is one of apathy. Casual indifference. About careers. About relationships. About possessions. About ambition.
To understand them we need to try and see the world through the eyes of someone who left school somewhere between the year two thousand and say twenty ten. They’ve had a mobile phone since they were at school. They’ve been ferried to school in the Chelsea tractor to avoid all those terrorists and paedophiles that stand on every street corner in South West London. They’ve had a personal computer in their bedroom for as long as they can remember. They’ve only ever listened to music through downloads onto first an IPOD and then a smart phone. Headsets always in, even at meal times. Except there aren’t any family meal times any more as everyone is so busy being ferried to apres school activities it’s impossible to get them all together.
Their birth parents have almost certainly divorced, so they stayed with mum and her new boyfriend. They inherited some half brothers and sisters that they only see at weekends when their dad, aka mums new boyfriend, is allowed custody. He feels guilty about the divorce so he lavishes money and attention on his kids that makes mum’s kids jealous. Cue teenage moodiness of the kind captured by Harry Enfield’s Kevin and Perry characters. Then they go to University to read Media Studies with Russian poetry. With the divorce and all mum and step dad can’t afford to fund them so they rack up thirty thousand pounds of student debt and graduate with a useless piece of paper that barely gets them a minimum wage job at Starbucks.
They job hop every six months, pause to go travelling then wonder why employers are not falling over themselves to offer them a well paid career. They see property prices rising faster than you could ever hope to save a deposit and their crummy salary couldn’t support the mortgage on a parking space so they give up any thoughts of home ownership and join generation rent. They shop for boyfriends and girlfriends online with as much thought as you or I would for a pair of shoes. They seem surprised when people don’t live up to their Tinder profile in real life and ditch them quickly to try this week’s new model. Welcome to the Millennial Generation.
Given all the above, what does this lacklustre crew offer to us as serious investors? Well, some of the fastest growing companies in the last decade have been built around catering to this generation, even if we oldies have eventually caught on. Millennials are more into sharing than owning, hence the growth of high end HMO properties as seen in the American TV series Friends. Savvy property investors have made a fortune catering to these young professionals renting up-market flat-shares with their own bedroom and shared living area.
Millennials spend a disproportionate amount of their income on personal technology so its no surprise that a twenty fifteen survey found that their favourite brands are Nike, Apple, Samsung and Sony. They use loads of apps and websites on their smartphones so brands like Tinder, Spotify, Youtube, Buzzfeed and Amazon have grown rich catering to their tastes.
I mentioned how they like sharing and I’m sure this is helping to grow companies like AirBNB and Uber into the Unicorns that they’ve become. But for me, and indeed for Elite Investor Club, the most important thing about the millennials is something that’s not even being talked about. For all their challenges early in life, these kids are the luckiest generation ever to walk the face of the earth.
They are the beneficiaries of the greatest wealth transfer in the history of mankind. Depending on who’s numbers you believe, we baby boomers own up to eighty per cent of all the wealth in western societies. Much of it has come through buying property decades ago and sitting on it through the decades. I still smile when I look at the price I paid for my first home in the nineteen eighties. Around seventeen thousand for a brand new three bed semi. My parents paid three thousand.
My grandparents paid three hundred. What worries me is the toll that financial illiteracy will take on this next generation.