NEW YORK (MainStreet) — It seems we’re all just chasing rabbits. And the rabbits are getting faster and farther away. In retirement, 80 is the new 60. And in wealth, seven figures is the new six figures. Pity the poor millionaire.
Half of millionaires with less than $5 million believe that just one financial setback would wreck their lifestyle. And the youngest affluent adults, Millennials, are the most insecure of all generations, with more than half (52%) fearful of losing it all, according to the latest UBS Investor Watch report.
Gen Y’s insecurity runs deep, even for the richest. Millennials worry about how their wealth stacks up with that of their peers (68% of Millennials vs. 53% of Baby Boomers) and feel pressure to “keep up with the Joneses” (48% compared to 44% of Gen X and only 22% of Boomers).
Millennial workplace expert Lindsey Pollak says it reflects the angst of a generation.
“It’s important to have context about Millennials,” Pollak tells MainStreet. “This giant generation (80 million) experienced the Great Recession, which most likely directly impacted them, their family and friends. Plus, Millennials have the largest amount of student loan debt compared to other generations. Managing that significant debt during uncertain financial times fosters anxiety.”
Perhaps it is this insecurity that drives Millennials’ desire to rent luxury rather than own it, she says.
“Consider the success of websites and apps that allow users to temporarily use designer gowns (Rent the Runway), deluxe houses or apartments (Airbnb), or expensive cars (rent a ride),” Pollak says.
The UBS report also notes that wealthy Millennials feel the pressure to work long hours (49% of Millennials vs. 28% of Boomers), a statistic that contradicts the stereotypical "lack of work ethic" that Gen Y is often criticized of.
“Millennials are often called 'entitled,' but research that I did with The Hartford shows a different picture,” Pollak says. “Millennials are confident leaders who want to lead in their professional and personal lives.” The 2014 study found:
- 83% of Millennials are leaders today
- 73% aspire to be leaders in the next five years
- As leaders, they want to tackle the issues of work-life balance, leadership training, technology and pay equity
However, Millennials also fear not living up to their potential (59% compared to 54% of Gen Xers and 24% of Baby Boomers) and disappointing others close to them (59% of Millennials compared to 40% of Gen Xers, 25% of Baby Boomers and 20% of the WWII generation).
Less than half (48%) of millionaire Millennials believe they’ve “made it.” How rich is rich enough? The UBS survey found older generations would consider themselves wealthy after acquiring $5 million, while Millennials most frequently (38%) said they would feel rich once banking $10 million.
And three-quarters of Millennials have snooped online to find out their peers’ salary, career history, home price or purchases (74% for Millennials vs. 57% for Boomers).
Pollak says Millennials, wealthy or not, can take some steps to secure their future.
“Millennials can protect their finances with benefits, such as disability insurance, which will keep an income coming in if you cannot work due to an off-the-job injury or illness,” she says. “I encourage Millennials to consider benefits part of their overall compensation with an employer.”
-- Hal M. Bundrick is a Certified Financial Planner and contributor to MainStreet. Follow him on Twitter: @HalMBundrick