Career implications of the new millennial ‘YOLO movement’

Greg McBride, Chief Financial Analyst at Bankrate.com, joins Yahoo Finance’s Sibile Marcellus and Alexis Christoforous to discuss what is behind millennials quitting their jobs.

Video Transcript

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SIBILE MARCELLUS: Feeling burn out from working long, virtual hours at home amid the pandemic, many Type A millennials are choosing to quit their jobs for some post-pandemic adventure, like starting a dream job or business. That's the focus of our latest installment of "Career Control."

I want to bring in Greg McBride. He's the chief financial analyst for Bankrate.com. Now Greg, there's this whole new YOLO movement among millennials, YOLO meaning you only live once. So many Type A millennials choosing to just quit their jobs, but they haven't won the lottery. So what's behind all that?

GREG MCBRIDE: Well you could have a confluence of factors that I think now the reason that we're seeing more of this as opposed to, say, three or four years ago. You mentioned the pandemic alterations, the lifestyle. People that have been kind of bottled up at home and they have cabin fever or just feeling the need for a change.

There's greater geographic flexibility, whether it's moving from a city center out to the suburbs or relocating from one state to the next. People aren't necessarily tied to a particular metro area. And there's abundant startup funding. So I think that, you know, there's a lot of opportunities that are generated out of that as a result, the type of opportunities that, particularly for those earlier in their careers, might say, yeah, you know what? Let me give that a shot.

ALEXIS CHRISTOFOROUS: But I mean, there have got to be some caveats here, right? I mean, this sounds sort of very romantic and wonderful on the one hand, especially for folks who may feel like they're in a rut after this past year. But what are some things millennials, or anyone, really, should think about before they quit their day job to go pursue their business dream?

GREG MCBRIDE: Yeah, first off, you know, what is your saving situation look like? I mean, it's really that amount of savings that you have that is really-- it gives you more financial flexibility and the freedom to take these kinds of risks, whether it's leaving your job or starting a business. You know, another thing-- look at history. This is not unique to this point in time. During the dotcom boom, people were leaving their jobs to be day traders. In the waning days of the housing boom, people would leave their jobs because they were making money flipping houses. In either case, it didn't end very well.

So, you know, evaluate what the risk factors are. And then also, if you're out of the workforce for a period of time-- you know, maybe you're just taking time off, you're not jumping to another job-- taking time off altogether-- will you pay a penalty in terms of your earnings when you do try to get back into the labor market?

SIBILE MARCELLUS: And Greg, we've talked about this. Does every generation have this moment? I mean, obviously last year was severe, was historic. We went through a pandemic, so burnout, obviously, is very understandable. But does every generation in their late 20s, early 30s, feel like they really want to change their life and just do something completely different?

GREG MCBRIDE: I think you've seen that throughout history in terms of, you know, it's not uncommon that those that get started in their career and then late 20s they-- you know, that's the time when a lot of people go to graduate school. They feel like they've got a feel for what they want to do for a career, but they know they need to take the next leap, so they leave the day job. They're going to graduate school.

You know, people that decide after a few years being in a career, eh, you know what? This isn't for me. I want to make a change. And they change careers altogether. So you've certainly seen that I think throughout history. And then there are those instances we've seen in the past where, you know, like during the dotcom boom, you know, people were leaving jobs to do things like day trade. You know, we've seen those pockmarked throughout history as well.

ALEXIS CHRISTOFOROUS: And also, I mean if somebody is hearing this and thinking, you know what? I'm going to take a gap year away from work to pursue a dream, to do something different, what would you tell those folks as they prepare to take that gap year? What should they be ready for?

GREG MCBRIDE: Well, from a financial standpoint, you need to have the flexibility, the savings, to carry yourself during that period of time that you're taking that gap, and that includes health insurance. When you're paying your own health insurance, if you go on COBRA, the premiums are a lot higher than what's getting deducted out of your paycheck now.

And then also, what's it going to be like getting back in? I mean, you are kind of rolling the dice on how long you're planning on being out of the labor market, that, you know, what's the labor market going to be like when you want to get back in? You know, is there going to be ample hiring in your field? And if there's not, how flexible are you? Would you be willing to relocate at that time? Are you willing to do something different? Or might you need to work for less? I think you need to process all of that before-- you know, look before you leap, as they say.

SIBILE MARCELLUS: And Greg, you mentioned that startup investing hit a record high last year, but has it been easy to access that money?

GREG MCBRIDE: Well, there are a lot of-- there's a lot of private money flowing around in terms of private equity and venture capitalists. So a lot of startups are getting funding and getting repeated rounds of funding. That's facilitated a lot of growth, and the type of growth that I think can be attractive to somebody who's either, A, looking to do something different in their career or just maybe looking to jumpstart their career and they view an up and coming company as the way to do that. With low interest rates, with ample liquidity, you know, you're seeing a lot more of those opportunities than we, say, would see maybe four or five years ago when we were in the latter stages of an economic boom.

ALEXIS CHRISTOFOROUS: And are you noticing interest in one particular industry when people are taking advantage of this so-called YOLO movement? I mean, a few years back it seemed like a lot of people were leaving what they were doing to go into the real estate industry. You mentioned a moment ago a group of people going into day trading years ago. Are we seeing any themes this time around?

GREG MCBRIDE: I don't know that there's one that necessarily bubbles up to the top. I think a lot of this really kind of stems back to, you know, technology, the fields that are growing, that that's where there's a lot of opportunities. And people that maybe feel like they've hit a ceiling in their current career path, they want to make a change but they aren't looking to necessarily do something radically different. They still want to stay within more or less the same skill set, but just maybe be in a different industry or a different job description.

SIBILE MARCELLUS: Well one thing that's for sure, it's true-- YOLO, you only do live once. Greg McBride, thanks so much.