Ask baby boomers whether it's wise to take money advice from 20-somethings, and they may scoff. "There's a natural tendency for older people to dismiss what younger people think as drivel," says Benjamin Lupu, a baby boomer and certified financial planner who owns Kensington A.M.I. in Burbank, California. However, millennials may be able to teach boomers some valuable lessons about how to manage money and find happiness. Here's a look at some of the finance lessons the older generation could learn from today's young adults.
Lesson No. 1: It's better to spend money on experiences than on stuff. Instead of loading up on material goods, such as a big house or fancy car, millennials are more likely to spend cash on intangibles. A 2014 Harris Poll study conducted on behalf of Eventbrite found that 78 percent of 507 millennials surveyed would rather spend money on an experience or event than on a desirable good.
"Millennials live very much for today," says Josh Alpert, founder and president of Alpert Retirement Advising in Royal Oak, Michigan. "They live like paupers quite often." That's something Lupu thinks his fellow boomers might want to emulate to some degree. "Excess materialism is totally lame," he says. Not only can buying items drain money from retirees' pocketbooks, but those possessions may also come with expensive maintenance costs.
Lesson No. 2: The sharing economy can save you cash. Since millennials aren't buying as much stuff, they need to find other ways to fill needs. Ash Exantus, an older millennial and the director of financial education for BankMobile, says his generation has quickly adapted to services like Uber and Airbnb to replace material possessions such as cars and vacation homes. "You could leverage technology and gain access to the same things," Exantus says.
Thanks to the sharing economy, people can, at a cost, rent everything from clothes to bikes through websites and apps. Plus, social networking sites like Nextdoor make it easy for people to connect with others locally and share goods like garden equipment or power tools.
Lesson No. 3: Look for the latest advice on investing. Alpert says he sees a difference in how younger and older clients approach their investing. "The millennial is far more likely to hop on the internet and do research," he says. This can make millennials more engaged in the process of saving and planning for retirement. It's not that boomers aren't also engaged, but they may be getting their information from less timely or reliable sources. "Seniors might rely on their kids, and their kids might be older," Alpert says.
Kerim Derhalli, a young boomer and CEO of the finance social media site invstr, says that by relying on slower news sources -- whether that be an adult child or the newspaper -- seniors may miss out on money-making opportunities. "If I watch the news on TV, I might get an hourly update, but by then it might be too late," Derhalli says of fast-moving investment deals.
Lesson No. 4: You don't have to have deep pockets to get financial advice. Seniors may be familiar with online banking and bill pay services, but they may not realize technology is also changing how financial advice is delivered. "I remember when if you didn't have $15,000, you couldn't meet with a financial planner," Exantus says. "Now, you can literally get expert advice with $10."
Robo-advisor services make it simple for people with portfolios of all sizes to get professional wealth management and, in some cases, even personalized advice. While it's definitely not the same as sitting down with a financial advisor for a one-on-one consultation, millennials don't seem to mind, especially since robo-advisors eliminate many of the fees associated with professional portfolio management. "Millennials really want to be involved and are willing to use technology so they don't have those fees," Exantus says. Tech-savvy boomers can take a page from the younger generation and find expert help online as well.
Lesson No. 5: Jumping in with both feet is the best way to learn. There is no shortage of apps and websites devoted to money management and wealth creation. However, unlike millennials, boomers may be hesitant to use these resources. "The main challenge the older generation has is that they're still looking for an instruction manual," Derhalli says. "These apps are designed to be learned in an immersive way."
While boomers may wait for someone to explain how technology is used, millennials are willing to jump in and learn from experience. That's something Lupu argues more boomers need to do. "They are clinging to the 20 th century," he says of some in his generation. "Flexibility and adaptation are needed."
Boomers may not be thrilled to take advice from 20 and 30-somethings, but those who are able to adjust to the millennial way of thinking may find they come out financially ahead in the end.
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