If You’re a Millennial, These Are the Two Money Tips You Should NEVER Take From Your Baby Boomer Parents

Advisor October 14, 2020

As a young adult, it’s only natural for you to look towards your parents for advice. After all, they’ve lived through it all- the good times and the bad, the ups and the downs. And it’s better to learn from someone else’s experience, rather than to make mistakes they’ve already made… Right?

Actually… Not right.

Deposit Photos | Millennials shouldn’t take money advice from their Baby Boomer parents

Now, we’re not here to tell you to disrespect your parents’ opinions. If anything, parents’ are the rare few who will always have your best interest at heart. However, times change, and you’re living in an extremely different world than the one your parents had to deal with. Their solutions might have worked back then, but the chances of them working out now are very slim.

As such, we’d like to discuss two major money tips from parents that you’ll be better off ignoring.

Save Your Money

One of the most common advice you’ll hear from Baby Boomers is to avoid swiping your credit card as much as possible, and just save instead. While it is unwise for Millennials to spend more than they earn to satisfy their lavish lifestyle, this Baby Boomer advice isn’t exactly useful. Alright, we’re saving the money, but what next?

Deposit Photos | Stock market investment is a great way to grow your wealth

Instead of trying to just gather as much wealth as possible, experts suggest using your profits as investment capital to maximize your gains. Think about it. The average American tries to save 20% of their total income, and that often gets eaten away on emergency expenditures after every couple of months. With the economy at such a terrible standpoint, how do you expect to ever save enough? Therefore, it is best if you found yourself a funds manager who can help you double, if not triple, your gains.

Buy a House

Another common advice you’ll hear from Baby Boomers is to invest in real estate. The market is very lucrative, they’ll say. And yes, this advice worked substantially in their time, but like we said right at the start, times have changed. To buy a house in today’s day and age, you’d have to put down preferably 20% of the total house worth as a down payment, and spend the next couple of years financing the rest.

Deposit Photos | The real-estate market isn’t good for short-term investments

We’re not saying that this method doesn’t work out- it does, most of the time. But, it’s a pretty big commitment to have all your savings (present and future) tied to one asset that might take decades before it’s ready to be cashed. Additionally, in case of a housing market crash, all that hard work would go in vain.

Take Away

It is always great to listen to and act on your parents’ advice, but only after you’ve crossed checked whether or not it still holds true in today’s world. As for finding ways to maximize your wealth, investment is the way to go. Try to take out some time to learn about the stock market, study it, and try to notice the market patterns. It is always advisable for you to consult an expert, too, but learning how to work the ropes yourself might not be too bad either.