9 Financial Risks Millennials Take That Boomers Won’t

Man looking stressed with money falling from sky.Photo byImage Credit: DJSrki via Deposit Photos.

Millennials and boomers often have different approaches to managing money, likely shaped by their individual experiences and generational attitudes. While boomers might prefer stability and tradition, Millennials are more willing to take financial risks in pursuit of their goals. Here are 9 financial risks that millennials are much more likely to take than boomers.

Investing in Crypto

Cryptocurrencies like Bitcoin and Ethereum are popular among millennials looking for high returns. Crypto is extremely volatile (even moreso than traditional stocks) and can lose value quickly. Boomers, who tend to prefer safer investments like stocks and bonds, prefer to avoid the wild swings and uncertainties of the crypto market.

Embracing the Gig Economy

Millennials are more likely to work freelance or gig jobs, which can result in unstable income. While the added flexibility is a plus, the lack of steady paychecks and benefits can make long-term financial planning difficult. Boomers, who typically value stable, full-time employment with benefits, are much less inclined to take this risk.

Delaying Home Ownership

Many millennials choose to rent longer rather than buy a home, often due to high real estate prices and student loan debt. Renting can be more flexible but also means missing out on building home equity. Boomers often view home ownership as a key financial milestone usually buying a home is a priority for them.

Student Loan Debt

Millennials often carry significant student loan debt, betting that their education will pay off in the long run. This debt can be a heavy burden that impacts their ability to save and invest. Boomers, many of whom faced lower tuition costs, are typically more debt-averse and cautious about taking on large loans.

Using Financial Management Apps

Many millennials use mobile apps for budgeting, investing, and even borrowing money. While these tools offer convenience, they also come with risks like cybersecurity threats and the potential for hidden fees. Most boomers prefer traditional banking methods and taking financial advice from trusted advisors, reducing their exposure to these risks.

Starting Businesses

Millennials tend to be more entrepreneurial, even though starting a business comes with a high risk of failure. While the potential rewards can be huge, it also means facing financial uncertainty and the chance of big losses. Boomers, on the other hand, usually prefer the stability of working for established companies and are less likely to make the jump into entrepreneurship.

Embracing High-Risk Investments

Millennials are more inclined to invest in high-risk, high-reward opportunities like startups and tech stocks. These investments can offer huge returns but also come with the risk of losing everything. Boomers typically favor more conservative investments like blue-chip stocks and bonds, and tend to prioritize steady growth over potential windfalls.

Minimalist Living To Save Money

Many millennials adopt minimalist lifestyles, focusing on experiences over material possessions to save money. This can mean living in smaller spaces, owning fewer things, and prioritizing travel and leisure. Boomers, who often equate success with material wealth and stability, may find this approach too risky and unconventional.

Delaying Marriage and Kids

Millennials often put off marriage and starting families to focus more on their careers and personal goals. This can give them financial flexibility and more opportunities to invest in themselves, but it also creates some long-term uncertainty when it comes to retirement and family support. Boomers, who tended to marry and have kids earlier, usually built their finances around family stability from the start.

This article first appeared on Cents + Purpose.