With Gen Z not far behind, Millennials can transform the investing landscape
  • Millennials, now living through their second recession, believe in building back better — not ’bootstraps’
  • Millennials want their investments to align with their values
  • Gen Z is taking a more explicitly activist approach with their money, so calls for change will only intensify

Experts have long worried the 2008-2009 financial crisis kneecapped the earnings potential of millennials, the moniker for the 73 million Americans born between 1981 and 1996. Many of those millennials (myself included) entered the job market just as the economy was cratering. Job offers were suddenly rescinded, hiring was frozen across a range of industries, and even when a paycheck came, it was often for far less than what was required to both support yourself and pay back the mountain of student loan debt you most likely had.

Ten years later, millennials are older, wiser, and translating the financial hangover from the recession into ultra-conservative financial practices. Those worries were well-founded. One 2019 study found that 43% of millennials have never made an investment. Because of this, millennials are also more primed than older generations to see just how broken the current system is — and not just because of the coronavirus pandemic. 

“So often there’s such a toxic narrative of ‘I can do it, you can do it, anyone anywhere for any reason can bootstrap their way up’ as opposed to acknowledging that systemic issues make it so that’s not always the case,” said personal finance expert Erin Lowry, in an interview with Karma. 

Lowry published Broke Millennial: Stop Scraping by and Get Your Financial Life Together in 2017, and last year published the follow-up Broke Millennial Takes On Investing. Her third book in the Broke Millennial series is slated for publication in December 2020. 

The “bootstraps” message rings even more hollow in 2020 than it did in 2010. The pandemic and the Black Lives Matter protests make it increasingly clear that, to quote millennial podcaster Aminatou Sow, “the scam is structural.” What financial power millennials do have is, increasingly, being used to push for changes. 

“[When you invest] you own a small piece of that company — it might be a very very very small piece — but you still have a voice, and it’s important to make that voice heard,” said Lowry.  For investors in mutual funds or ETF indices, that means engaging with the brokerage — including, notes Lowry, demanding impact investing options if none currently exists. 

“That puts a lot of the burden on you, the individual, but unfortunately that’s just the case — there isn’t really a one-stop-shop for all of this information,” she said. However, given the diversity among individual deal-breakers, that’s not necessarily a bad thing: “We all have very different feelings about what we want to support, what our thresholds are about what we will and won’t support.”

Normalizing those questions is something millennials can do as Generation Z enters their adult lives. Lowry, like other observers, is excited about the activist sensibility that twentysomethings are bringing to their personal finances. “There will be more of an alignment with both if and how they invest their money and how they spend their money and the companies they’re willing to support,” she said, noting that these questions regularly come up in her coaching work with Gen Z. In June, Candide Group’s Jasmine Rashid, a member of Gen Z, published The Financial Activist Playbook for Supporting Black Lives, a how-to guide that builds on the principles of financial empowerment that millennials like Lowry have been seeding over the last decade.

“Both investing and general purchasing power — that really does all matter,” Lowry said. “It’s a way that you can also engage in activism, and especially in a way that can be very meaningful and impactful, but not one that we always think of.”