In an effort to help luxury real estate professionals better understand this influential group of current and future homeowners, the company partnered with WealthEngine to analyze key aspects of the millennial millionaire lifestyle, including wealth creation, philanthropy, property investments, spending trends and more.
“Millennial millionaires are projected to become one of the richest and most influential generations in history, said Charlie Young, president and CEO of Coldwell Banker Real Estate LLC. “This report is a smart way to get a detailed look at this generation. Real estate professionals should take notice as understanding this generation will be key to growing your business in decades to come.”
Today, there are approximately 618,000 millennial millionaires in the United States.
According to the WealthEngine data, the vast majority – 93 percent – have a net worth between $1 million and $2.49 million, but the generation stands to be worth even more. In the coming decades many more millennial millionaires will be minted as part of “The Great Wealth Transfer;” millennials are projected to inherit $68 trillion from predecessors.
“This population of millennial millionaires is large and only getting larger – by 2030 millennials are projected to hold five times the wealth they hold today, said Craig Hogan, vice president of luxury for Coldwell Banker Real Estate LLC. “How are they investing in real estate now? How will that change when the Great Wealth Transfer takes place? This report is a must read for any real estate professional looking to build life-long relationships with top clients today and tomorrow.”
Other notable report findings include the following:
- The top states for millennial millionaires: California (44%), New York (14%), Florida (5%), Massachusetts (5%), Texas (5%), Washington (4%) and New Jersey (4%)
- Eight of the top ten ZIP codes are concentrated in California’s Silicon Valley, but the surprise #1 ZIP code? Traverse City, Michigan
- Walkability is welcome: millennials value walkable neighborhoods over well-established luxury communities
- But they’re not giving up driving altogether. The top car model for millennial millionaires is the BMW 3 Series; compare that to the top car for all millennials, the Chevrolet Silverado
- Homeownership is high: 92% have purchased property, with 80% purchasing a single-family dwelling
- Home Improvement = Customization: 77% are interested in home improvement as a way to personalize their space
- Charitable causes are compelling: 56% of millennial millionaires donate to charities
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Why is Small Business in America Dying?
A lot of people are saying small business is dying in America. An article on Brookings charted data from the U.S. census of the bureau, which tells us:
- 1978 had a ~14% firm entrance rate and a ~11% firm exit rate
- 2011 had an ~8% firm entrance rate and a ~9.5% firm exit rate
In short, the U.S. is now losing more businesses than its creating. This trend developed slowly over three to four decades.
The question is why? Here are the most common theories that explain why the U.S. isn’t creating as many small businesses:
1. Big companies are taking up the market
It’s simple math. If Starbucks opens 1,000 new stores, it means mom and pop cafes will have to suffer. Markets are limited. If customers are going to big companies then small businesses are losing customers.
Big companies also tend to hog the best talent in the industry. Put yourself in these worker’s shoes. Would you rather work for a 10-employee tech company? Or take a 6-figure salary at Google?
Also, large companies absorb smaller ones and set them up as subsidiaries. The bigger they become the less small businesses there are.
2. Healthcare costs
The cost of healthcare is astronomical. Not only do entrepreneurs have to pay for their own health insurance, but they also have to pay for employee benefits.
Large companies have an advantage in this regard since healthcare becomes cheaper when you purchase it in bulk.
3. Technology costs
Technology is imperative to streamline production and scale business. Unfortunately, it’s usually expensive to acquire and properly implement. It’s not cheap to develop an online presence and big business usually scoops up the talent.
There’s also automation, which saves tons of time and money for businesses, but it’s so expensive that only bigger businesses can afford it. If a customer wants self-checkout, chances are they will go to Wal-Mart or Lowe’s before a small business.
4. Our systems are not small business friendly
Some point out that small businesses are held to similar regulations as giant companies. Small businesses must pay income taxes, sales taxes, unemployment taxes, payroll taxes, and more. They are not equipped to handle these regulations and are punished by the IRS.
Others point out that the U.S. government does not provide a lot of assistance to help jump-start small businesses. Some have called for lower taxes on small businesses or for government funds to help them.
5. Can’t get funding
Starting a business costs a lot of money and it’s a huge risk. Consequently, the loans that are readily available to entrepreneurs have high-interest rates and quick payback terms. This crushes small businesses early in their development when they need money the most.
Another problem is that professional investors heavily favor mature companies that have a proven track record of growth. The capital available for business tends to go to larger companies rather than small businesses.
6. Student debt
Young adults have a student debt problem. Many of them are exiting college with several loans that will take years to pay off. On top of this, many are saving up to buy houses. Therefore, they view starting a small business as unwise at best.
A lot of entrepreneurs rely on a personal savings account to cushion the costs of launching a business. But few have the finances to pull that off.
Unfortunately, many would-be-entrepreneurs are crippled from launching a small business.
The decline of small business may not be bad
Some experts posit that the decline of small businesses is not necessarily a bad thing. We just have to look at it the right way.
With the dawn of the internet, a lot of business is now conducted online. This gave rise to the gig economy, a workforce that is difficult to measure. Since remote work is becoming easier, companies hire freelance writers, web designers, remote secretaries, temporary bookkeepers, and more.
Factors like this are hard to calculate when analyzing the overall health of the American economy. In other words, the decline of small businesses may be a natural development in a technological economy.
What do you think is causing small businesses to decline?
Could Trump’s Tariffs Hurt The U.S. Economy?
About a year ago, the media was talking about how Trump’s trade wars could negatively affect many industrial companies, the agricultural sector, and right down to the every day American worker.
The recent stats from Gross Domestic Product has now revealed the current reality of Trump’s multiple front trade war.
Data shows that imports increased, while exports decreased by over 5%. Business investments have declined by 0.6%, and this decline has been happening since 2016. Most North American corporate capital spending is also on a declining trend.
Trumps’s tax reform was short-lived for most American companies. We did not get many benefits from the trade tensions either. U.S. corporate debt is getting much worse and far more significant than household debt.
Many are speculating that the cutting interest rates will lead to more zombie companies that will threaten both the U.S. and global economy.
Click here to learn more.
Why We’re Wrong About Millennials
Businesses spend millions of dollars trying to understand them. News outlets write thousands of articles about them. And the public thinks they’re pampered phone-addicts that live in their parents’ house.
What are millennials anyway? There are a few ways to define this age group, but for clarity’s sake, we will define the term as Pew Research does. According to their chart, millennials were born between 1981 and 1996.
The world is fascinated by this demographic. Here’s a spattering of popular content about millennials:
- Crybaby millennials need to stop whining and work hard like the rest of us
- Millennials Are Actually Workaholics, According to Research
- Generation Snowflake… hysterical cry babies or millennial activists society needs right now? We find out
In 2016, Inside Quest interviewed Simon Sinek about millennials and the video went viral with 11 million+ views. In it, he says millennials are lazy, narcissistic, entitled, and addicted to their phones.
A lot of people agreed with his views, but are these opinions a fair understanding?
This article seeks to explain why some stereotypes about millennials are inaccurate. Consider these thoughts on why we may be wrong about millennials:
Opinions about millennials are similar to every generation in history
Popular opinions about millennials include:
- They’re pampered and spoiled
- They won’t work hard and expect to be rewarded
- They’re given everything, yet complain endlessly
Amazingly, people complained about young baby boomers the same way baby boomers complain about millennials. And you know what? When millennials get older, I bet they’ll complain about the younger generation the same way too.
This historical pattern reveals that millennials are not unique in these regards. In the 1950s, young people were apparently “pampered” by technology and preferred busses over walking.
In the 1990s, they said that the younger Generation X lived better than the previous generation but complained about life more.
Even 2000+ years ago, Aristotle said the youthful thought they knew everything and were insolent.
Are only millennials pampered complainers? Or are they just like every other generation of humans? The more logical conclusion is…
People change as they get older
If people progress properly, they become wiser and more experienced as they age. It’s natural for the older to view the younger as foolish and inexperienced.
Our older selves are significantly different than our younger selves. We should apply a similar grace to millennials. They will grow and mature as previous generations did.
Opinions on millennials downplay external factors
This is a frustrating injustice that all of us have experienced – being blamed for something that was beyond our control. There may be certain trends among millennials, but how much is due to circumstances they grew up in?
A few condemning stereotypes about millennials conveniently overlook external factors that were beyond their control. Here are two examples:
Tech advancement coincided with millennials’ coming of age
Have you heard that millennials are screen-centered, phone-addicted slaves to technology? Well, it’s partly true.
A study by Akademiai revealed female college students spend 10 hours a day on their phones and male college students spend 8 hours a day on their phones.
Part of this phenomenon has to do with recent technological advancements. Common in-person activities have evolved into online activities. For example, you can use your phone to…
- Do banking
- Email, text, photography, and video
- Network on social media
- Apply for jobs
- Order food
- Listen to music
- Find a date
- Research questions
- Use handy tools like a calculator, dictionary, stopwatch, alarm, or notebook
- Watch a how-to video
When you consider these developments it’s natural to conclude that people will be on their phones more, especially individuals who grew up with access to mobile devices.
If there’s a broken copy machine at work, someone is bound to watch a how-to video on their phone. If it’s ten minutes before lunch, someone will most likely order pizza through an app. Where employees used to play the radio while working, now they will opt to stream music on their phones.
Do people goof off on their phones? Absolutely. But not all phone usage is bad. It seems like millennials are ruthlessly thrashed for using their phones. Sometimes they’re just following a map app to a new location or reading current events.
Don’t forget about the ‘08 recession
Another common stereotype about millennials is that they do not work hard and are financially irresponsible. They live with their parents into late adulthood, spend too much on avocado toast, and have tons of student loans.
A study by Urban Institution revealed that millennials are less likely to be wealthy compared to previous generations at their age.
But is the financial state of millennials due to incompetence and poor work ethic? Research tells a different story. According to a U.S Travel Association survey, millennials are workaholics.
They surveyed 5,000 full-time employees and found millennials are more likely to forfeit vacation days than other age groups. Millennials were also more likely to agree with these statements:
- “I want to show complete dedication to my company and job.”
- “I don’t want others to think I am replaceable.”
- “I feel guilty for using my paid time off.”
In other words, millennials are working hard, but they’re not making as much money.
When we combine these two studies, poor work ethic isn’t the issue affecting millennial wealth. The more likely conclusion is the poor state of the economy.
Thousands of millennials graduated college with huge student loans only to enter an American workforce shattered by a real estate bubble.
Investments were lost. Homes were foreclosed. In the months after the bubble burst, unemployment peaked at 10%.
With the rising cost of real estate and stricter lending standards, it’s no wonder that millennials are less likely to own a home than previous generations.
Opinions on millennials are rarely based on evidence and data
There’s a lot of talk about millennials, but it’s rarely based on evidence and data. A prime example is IQ’s interview with Simon Sinek, which was earlier cited. In this 15 minute video, Sinek doesn’t reference a single source for his opinions.
While Sinek has interaction with millennials, his experience is a tiny fragment of a huge demographic.
And he’s not the only one. There are some silly articles out there that are just baseless in their claims:
- Millennials are filling their homes – and the void in their hearts – with houseplants (Are they buying plants more than previous generations? How do we know that’s the reason they buy plants?)
- RIP: Here are 70 things millennials have killed (Millennials alone killed these things? Even though some of them, like McDonald’s, are thriving this year?)
There’s tons of talk and ink spilled about millennials, but there isn’t a lot of solid, reliable information out there.
What’s worse is that readers have some experiences with millennials that match these theories and conclude, “Oh wow, that information was true.”
Eventually, so many people buy into these claims that readers suffer from groupthink. If the majority believes millennials are filling the void of their heart with houseplants, well then it must be true.
We need fewer stereotypes and more research
Jokes are good from time to time and every civilized society needs humor, but many of these stereotypes don’t accurately portray millennials. Just because content goes viral and a lot of people believe it, doesn’t mean it’s true.
To properly understand millennials, we need to actually study them and produce informed opinions based on research. Good places to start are Pew Research and Census.gov. You can also conduct your own surveys with SurveyHero.
Not only is this approach more ethical than rehashing stereotypes, but it will also help us navigate familial and business relationships. Millennials will be less misunderstood, and we will understand them better.
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