Baby Boomers And Millenials: How Generational Change Affects Trading And Investment?

Baby Boomers And Millenials

The world changes with the speed of lightning thanks to technological progress. A few decades ago we were getting familiar with non-contact payments with credit cards and nowadays we can use virtual currencies for that. For Baby Boomers and Millennials, who were born in the 1940s-1980s, it was hard to get used to mobile phones and computers when they became a commodity. However, about generation Z, children born after 1997, we can say ‘ they are born with tablets and smartphones in their hands ’. They quickly assimilate new skills, and even babies know what button to click to watch the cartoons.

Has this age difference affected the preferences towards things to invest in? How do Baby Boomers care about their retirement and how do Millennials prefer to increase their holdings? Let’s find out.

The difference between the Boomers’ and Millennials’ values

Different ages grow in different economical situations. Thus, they care about money and investing in different ways. Millennials are more concerned with education and careers than boomers, who are centered on retirement benefits. So it’s no surprise that their investment objectives differ.

According to Raconteur, 66% of asked Millennials believe investment opportunities will improve over the next 12 months. In comparison, only 49% of baby boomers answered similarly to the same question.

The majority of millennials consider themselves experts when it comes to investing. A mere 23% of boomers were able to answer the same.

What role do generational factors play in investing?

The way Boomers invest

The Baby Boomers, or those born between 1946 and 1964, are mostly retired or about to retire. In spite of the fact that financial professionals regularly recommend reinvesting retirement funds in safe assets like bonds and money market funds, many Baby Boomers ignore that advice. Over 8% of them solely invest in stocks, while nearly half have riskier allocations than analysts recommend.

Since the recent run-up in the market, this strategy has paid big dividends. The number of millionaires has reached an all-time high, largely as a result of Boomers aggressively investing their retirement money.

Millennials and their preferences

Younger Millennials may still be in college, while their elders are approaching 40. It might surprise you that Millennials are more conservative investors than Gen X-ers. According to a survey, 30% of them prefer cash as an investment over stocks, real estate, or bonds.

Socially responsible investing has been largely influenced by the millennial generation, which looks for funds and companies that have certain environmental, governance, and social goals. The Millennial generation tends to lean toward simple investments such as target-date mutual funds and exchange-traded funds.

Factors that affect Millennials’ behavior

Global and national economies are greatly affected by the millennial generation. They are estimated to control 30% of retail spending in America by 2020, up from 13.5% in 2013. According to Fung Business Intelligence Centre estimates.

1. There is money coming in, but it’s not necessarily going out.

Since 2000, Millennials’ mean incomes have decreased. Working millennials face a significantly higher cost of living. At the same time, national minimum wages and other income indicators are falling. Although Millennials account for a large portion of the national population, they do not have a large disposable income. After a wealth transfer, this may have a profound effect on purchasing behaviors.

2. Many Millennials are heavily indebted.

Millennials are concerned about the cost of education, which impacts their willingness to spend. According to the Federal Reserve, young Millennials’ average student loan balance has more than doubled over the last decade. This type of debt is long-term. Decision-making for Millennials is affected by this. Since debt is a constraint on buying decisions, utility plays a big role in their decision-making. An essential part of the utility of purchase is inherent in its extraneous features.

Millennials pay attention to the long-term benefit of retaining the brand or the ownership of a product or service. To acquire new customers from this market as well as keep them committed over the course of their consumption lifetime, it is so critical for brands to establish a trusted reputation.

3. There is no priority in ownership.

In comparison to previous generations, millennials are less concerned with long-term financial obligations. Nowadays, ownership is less of a factor in the world of shared economy and on-demand services. Millennials are significant consumers of the sharing economy.

Participants in the sharing economy have access to goods and services as opposed to owning them. In a recession-era, Millennials have experienced phases of consumer maturation that have led to greater financial conservatism. Share economy businesses and products, such as Uber and Airbnb, allow Millennials to access the goods and services they need, when they need them, without having to own them.

4. Millennials are ready to wait.

Even though they aren’t as concerned with ownership, it is still on their radar. When buying a home, Millennials have more patience and are willing to wait for the right time. Again, this is due to the accessibility provided by the sharing economy and on-demand services. A virtual button makes almost anything available, so owning isn’t a necessity as much as it used to be.

5۔ Quality is far more important than price.

The Great Recession of 2008 induced a price-sensitive generation to become consumers, primarily the Millennial generation. A heavy education debt load combined with price sensitivity makes them careful spenders.

Most of the time, the focus isn’t on price but on quality when they’re making a purchase. It is important for millennials to have a long-term relationship with the brand in question as well as a product that lasts.

How about trading?

Millennials are curious about how to get Bitcoins and already own 49% of this cryptocurrency, compared to Gen Z’s 13%, says a study by Piplsay.

53% of Millennials said they would purchase products or services using cryptocurrency, compared with 7% of Gen Z respondents.


We have analyzed the ways generational groups relate to investments and trading. Thus, we concluded that Millennials are the most open to investments at all and appeared to be the most supportive of digital currencies compared to other generations.

Read Also: Top 5 Best Ways To Make Money With Bitcoin In 2021

Baby Boomers And Millenials: How Generational Change Affects Trading And Investment?

Leave a Reply

Your email address will not be published. Required fields are marked *

Scroll to top