Millennial Investing – is our myopic investment thesis affecting ROI?
As a Millennial, now turning 33, I, along with 75 million fellow U.S. Millennials have finally arrived in our growth-focused 30s. No longer 22 and care-free, degree holding, free spirited youths, we now have an objective – namely to “set ourselves up” for our 40s and beyond. In that thread, we have evolved into career focused, disposable income generating creatures that aspire for it all – an envious job built around true meaning and purpose, a higher pay grade, and investments that make a difference in the world. 33 is the new 53. Can’t we have our cake and eat it too? Us Millennials like to think so.
As a Millennial, we have witnessed the 2009 Global Financial Crisis first hand – we were let out into the wild (job market) right at the time of our graduations – arguably one of the most challenging job markets of the last 50 years. We learned to wait for the economy to recover before we could get promoted, we learned about saving, and we also learned that incumbent institutions (automotive industry, banking industry, student loan lenders, mortgage lenders, etc) may not have had our best interests at heart, all of the time. Our eyes were opened to the realization that there must be a better way.
Hence, through disruptive innovation, and Silicon Valley startups, we now have greater choice, that also provides transparency, access, affordability, and impact. Cryptocurrencies like Bitcoin and Etherium have provided alternative investment markets that aren’t pegged to the U.S. currency or Fx markets. Dapp (decentralized app) startups provide us with a decentralized investment opportunity that claim to disrupt corporate silos that take our data and amass unfathomable amounts of wealth. And utility, on-demand companies like AirBnb, VRBO, Uber, Lyft, Fiverr, TaskRabbit and more provide us with both access (as opposed to ownership), which is fine by us Millennials it turns out, as well as additional income generating opportunities from both a supplier perspective, and also an investor perspective (public markets or even on AngelList).
The world has changed, and we Millennials feel, for the better. However, does it come with a warning sticker? Can investments in alternative utilities, DAPPS, platforms, and startups, that we oh so enjoy, put us at risk because of our myopic, and biased Millennial viewpoint? Won’t every industry be ripe for disruption though, so shouldn’t we invest our post-tax dollars in these risky (ad)ventures? Maybe. Maybe not. Why pack our cash in boring savings accounts, REITs, money market accounts to save up for a house that will take us 30 years to pay off – is that even our American Dream? Or is The Millennial Dream to have a posh, metro apartment with global access vis a vis AirBnB more our thing? The average Millennial might favor a cool investment that has social impact over a traditional one that our parents may have invested in (e.g: AirBnB – an app we all use, and a company we all admire – they give back to the displaced in times of crisis with free housing for gosh sake!). Is it that these new investments like Facebook, Twitter, SNAP and others feel more like “us”? This, is surely an investment bias, and one that is not founded on any technical stock analysis, financial thesis, or structure – it solely is based on two things:
1) Is the company something we use, and if not, is it cool to us and our friends?
2) Does the company provide meaning to the world with social giveback, and if not, is it disrupting an incumbent – another “cause” we, Millennials, can surely stand behind.
Passion investing may not replace the ROI of traditional, fundamental, technically sound, diversified investing – however it sure feels a lot cooler. Wouldn’t you agree?
#investing #millennials #startups #impactinvesting
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