Young Money
NBC: Fed Data Analysis, Wired: AI Financial Advisor, WSJ: Young Men and Gambling
In 2017, Millennials were worth about $3.94 trillion. By 2022, that number ballooned to $15.95 trillion. The wealth of younger Millennials and older Gen Zers has exceeded expectations by 39%.
Even with this newfound financial success, young people still feel strapped. This article talks about “phantom wealth” which is defined as “the disconnect between being rich on paper and feeling well off.” The sense of underperformance is at least partially caused by the growth in illiquid assets, such as real estate, which don’t change day-to-day spending.
Another reason for phantom wealth could be that social media drives expectations about where to vacation, what kind of house to live in, and which products to buy. Many people now strain themselves financially to meet these heightened expectations OR stick to a reasonable budget and feel deprived.
New AI chatbot financial advisors have been introduced to help young people prioritize investing and find contentment within the confines of a budget. I think these technologies could be helpful in the future, but the current iterations seem scammy. Reece Rogers at Wired experimented with Cleo AI and Bright and he writes that “the generative AI tool seemed mainly preoccupied with using my personal data for upselling opportunities.” Not ideal.
Speaking of ways to lose money… I was happy to see The Wall Street Journal cover the surge in gambling addictions among young men. Between sports betting, the crypto market, and day trading, gambling has become a part of daily life for millions of young people, particularly young men. This has come up in most of my interviews with men under 40 and I’m curious to follow the interventions that will be introduced to curb this trend.
The good news is that young people are actually doing much better financially than we thought. The less good news is that there seems to be an endless number of ways to lose it all. For really good financial advisors with firm understandings of markets and exceptional communication skills, this could be your time to shine.
Old Tech
NYT: Luddite Teens Update, After Babel: Social Media is Optional
Approximately 16% of Gen Z adults currently own a dumb phone, the highest percentage among all generations. Additionally, 28% of Gen Z adults have expressed interest in trading in their smartphone for a dumb phone, indicating potential growth in this market. I sat in a restaurant in Paris last month watching two university students click away on their disposable cameras and I was reminded of the sweet anticipation of waiting for film to develop.
The one-time screenagers are officially rebelling.
Gabriela Nguyen, an education policy masters student at Harvard, wrote a great piece in After Babel that I highly recommend reading. She founded APPstinent, “a Gen Z-led student organization at the Ed school bringing visibility to the social media-free lifestyle.”
Nguyen writes, “At 14, I would try to complete simple 30-minute school assignments, but they would end up taking 4 hours because I could not stop scrolling. I lost sleep, staying up late into the night staring at my phone.”
The most compelling argument in her essay is that platforms designed to hook you are not compatible with moderation. Many people try to limit screen time through a series of tricks like greyscale and time limits but Nguyen points out how futile those attempts are. Nguyen is working with Freya India to build a guide for Gen Z to get off of social media and rebuild a life in the real world.
Similarly, a group of smartphone-free high schools students craving real world experiences were interviewed in 2022. Alex Vadukul at NYT checked back in with them to see who stayed smartphone-free and who caved. Many of the students remain devotees of their tech-free movement but one young woman shared that she needed a smartphone because Uber was the only way to get home from raves in abandoned parts of Pittsburg. (I know, hilarious).
But she brings up a good point—there are some necessities that require smartphones. People across the generational spectrum are trying to figure out how to leverage the convenience of modern tech without surrendering to endless distractions. The reality is, rave or not…we all gotta get home.
What I’m Working On
I was able to preview early data from a global youth study I’m working on with Zak Dychtwald at The Young China Group. Some fascinating findings that I hope to share out soon.
As part of an ongoing project with Filene, I’ve partnered with Katie Brown and Jason Shapiro on an influencer test. The experiment will help us understand the most effective and affordable ways to leverage influencers to reach young consumers.
I bought the subscription for OpenAi’s new Deep Research and I’m really impressed. If any of you are playing around this, let me know. I’m curious what you think.
In January I spoke in Santa Barbara, Washington DC, Dallas, and LA. In February, I’m primarily working with Minnesota elected officials so I’ll be home for a bit followed by speeches in Palm Beach and Puerto Rico.
Misc.
Lady Gaga and Bruno Mars performed a beautiful, bittersweet rendition of California Dreamin at the Grammys. I’m sending my love to the whole LA community.
Looking forward to hearing more about the Filene influencer experiment!
excited to chat further about article #2!