Rather than striking out on their own after college, many millennials are moving back home. So many millennials are moving home, in fact, that the number of young adults living at home has returned to 1940s levels. Pew Research Center found that nearly 43% of 18-34 year old males and 36.4% of 18-34 year old females were living at home in 2014.
Why, you ask? Because the millennial generation is doing things differently than previous generations. They are delaying marriage, babies, and home-buying until later, for sure, but they also aren’t saving like they should. And why should they?
Many millennials came of age during the Great Recession, when their parents and family friends were losing jobs left and right, and entry-level jobs became harder and harder to get. They don’t seem to trust Wall Street or the equities market, so they are not saving and not investing! It’s difficult to blame millennials. A lot of people find it hard to justify investing with the recent run-up and overall volatility, but if the young working class doesn’t start saving and investing, we will have bigger issues than them staying in our basements. Seeking Alpha’s Lance Roberts sheds some light on this in his latest article.
More and more, investment options outside of equities are becoming more accessible. Technology can bring accessibility, transparency and overall efficiency to the investments that have not historically been widely available. My guess is that the millennials will soon leave the nest, start saving and push more issuers and sponsors to give them quick, clean and reliable options.