The Next Generation's Perspective on Wealth
Published on 17 June 2020
Published on 17 June 2020
This is a generation that’s unlike any other.
They’ve grown up in the digital age and are more tech-savvy.
On the surface, millennials (the generation born in the two decades from 1980 and 2000) appears to be consumed by social media trends. Many of their idols make a living by traveling or eating their way around the world, in search of instagram-worthy snapshots. But beneath this shallow façade lies a less well-reported facet of this younger generation: they value financial stability, and the shock of the coronavirus crisis will likely amplify this predisposition further.
Take the example of 25-year old Michelle Ee from Singapore, a young woman three years into her career as a marketing executive. She and her younger siblings still live with their parents and since a young age, have vacationed at least twice a year as a family.
Like many Asian families, Michelle’s parents have made sacrifices for their children’s opportunities, setting aside savings for their children’s education and financial future.
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Michelle doesn’t consider her spending habits to be excessive even though she covets the same trendy clothes, bags and gadgets as her friends. She doesn’t have any outstanding debt but strikes a balance between what she can save monthly versus her lifestyle expenses, remains a daunting challenge.
Michelle does worry about her financial future. She has nagging doubts about when she will be able to afford her own apartment; how long will it be before she has set aside enough to think about marriage, starting a family or retirement.
“One of the biggest concerns of this generation is that they are likely to achieve their financial goals much later than their parents’ generation,” says Lim Kok Boon, Head of Maybank Premier, Singapore.
As a leading financial institution in Asia since 1960, Maybank understands this inter-generational shift in financial planning. Maybank has deepened its roots as economies prospered in the region, working alongside companies as well as individuals in navigating their financial decisions. Ranging from savings accounts, investment portfolios to trusts and legacy planning, Maybank Premier’s comprehensive suite of products and services can be tailored to meet both short and long-term investment goals.
Before the pandemic altered virtual every economic forecast downwards, millennial wealth was expected to hit US$24 trillion this year. Millennials may not be the wealthiest generation ever - that honour goes to baby boomers - but in the next ten years the world is set to see the biggest intergenerational wealth transfer in history. Millennials, needless to say, will inherit a lot of that money from their parents.
Furthermore, Asia is home to the biggest population of millennials at 58% of the total global population, according to A.T. Kearney. What exactly does this generation want? Having kids, buying homes and other traditional signals of adulthood “success markers” do not top their list of ambitions, according to Deloitte’s 2019 millennial survey. Travel and seeing the world are among their aspirations but almost half of the respondents are also attracted to making a positive impact in their communities or societies at large.
Millennials were already deeply affected by witnessing and living through the Global Financial Crisis of 2008-2009. Now many have lost their livelihoods overnight from the coronavirus lockdowns.
Compared to previous generations, they have been obliged to navigate through choppy financial waters. Indeed, theirs has been the most difficult economic landscape of any generation since the Great Depression, according to the CFA Institute. The U.S. subprime crisis and subsequent events that unfolded in the aftermath, have created a defining moment for this generation.
It’s no surprise that these double crises, combined with the volatility in financial markets, will result in millennials being more aware of the pitfalls of the market when it comes to investment and wealth planning and more conscious of the greater good when it comes to selecting investments.
“This is a group that’s very purposeful. They want their business leaders to be agents of positive change and when it comes to investing, they want to put their money to work only if they can make a difference to society and the environment,” adds Mr Lim.
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