Generation Y is emerging as a politically progressive group. How do these politics shape investment preferences?
The liberal bent of Generation Y is reflected in the investment preferences of young affluent investors, who attach greater importance to socially responsible investing, according to a Millionaire Corner research.
“As Generation Y moves through adolescence and into young adulthood, it’s emerging as a more liberal and socially conscious group,” said Catherine McBreen, president of Millionaire Corner. “Early exposure to the Internet and social media has increased their awareness of a larger world, and watching their parents struggle to make ends meet during the recession has informed their attitudes toward wealth in significant ways. Our research shows that Generation Y is much more reluctant than older generations to take on debt, but while they consider themselves to be more savers than spenders, they also realize there’s more to life than material wealth.”
Generation Y is starting out as the most “politically progressive” age group in modern history, according to a survey conducted last year by the Pew Research Center. The group voted 2-to-1 for Barack Obama over John McCain in the 2008 presidential election, while adults age 30 and over split their votes 50-49. The difference in voting patterns creates the largest generation gap measured in a presidential election since the start of polling exit interviews four decades ago. According to Pew, Generation Y is more likely than older generations to identify themselves as “liberal” and have more tolerant attitudes toward such social issues as interracial dating, gay marriage and immigration.
Less than half (44 percent) of all Mass Affluent investors attach importance to the social responsibility of their investments, but nearly two-thirds of affluent investors younger than 31 say it’s important to consider the social impact when investing, according to a Millionaire Corner study conducted in December of 2010.
Mass Affluent investors have a net worth of $100,000 to $1 million, not including primary residence. Affluent Generation Y investors also worry more than their older peers about using their wealth to help others, 45 percent vs. 32 percent for Mass Affluent investors as a whole.
Family concerns also rank higher for Mass Affluent investors age 31 and younger who express higher than average concerns about financing the education of their children (68 percent) and grandchildren (48 percent). Generation Y investors are also more likely to worry about caring for aging parents, 63 percent vs. 54 percent for the Mass Affluent overall.
Monthly bills, such as credit card and mortgage payments, are also a greater worry for younger investors (43 percent), compared to 33 percent for Mass Affluent investors as a whole. On the other hand, younger investors express greater interest in working with a financial profession. Nearly half (48 percent) of Generation Y investors say they are concerned with getting “adequate help and advice to allow me to reach my financial goals.”