University season is over in many parts of the world – graduations have been attended, photos taken and certificates framed.
For some, this means coming back to the UAE to live with parents, look for a job or if lucky, start a career.
Moving back home is about more than just saving money – although that’s a definite plus in light of both Abu Dhabi and Dubai rising in the ranks of Mercer’s annual cost of living survey. The latest one rates them more expensive places to live this year compared to last. In the US for example, moving back is a trend taken up by an increasing number of young adults with wealthy parents. They can afford to branch out on their own, but choose not to. It’s part of a change in the way these monied families and their millennial offspring are coming together, filially and financially, according to a recent UBS survey. I bet this is mirrored here too.
By millennial I mean anyone who was aged 18 to 34 in 2015. This covers those finishing first or postgraduate degrees and those who are a few years into forging their own existence.
First, a few millennial facts for quiz-night:
• Millennials are the largest generation in American history
• 71 per cent would rather go to the dentist than listen to what banks are saying
• They’re getting married and having their first child later than any previous generation
• Buying their first home later than previous generations
• They’re the least trusting generation
And those lucky enough to have money are handling it their way.
UBS found that young adults who earn US$100,000, or have that much in assets, prefer to keep half of it in cash.
This finding is mirrored in a Bankrate poll out last month, also in the US. In it millennials were asked how they’d invest money they don’t need for 10 years; 32 per cent of 18 to 32-year-olds said they’d keep it in cash.
This is a major departure from what we’ve been told to do.
Cash sitting idly is a big no-no according to financial advisers. But then again, seeing as millennials don’t trust their fellow man, little wonder they’re not jumping at the advice of financial folk.
The Pew Study “Millennials in Adulthood” found that ” … just 19 per cent of millennials say most people can be trusted, compared with 31 per cent of Gen Xers, 37 per cent of Silents and 40 per cent of Boomers.”
Both lack of trust and the propensity to sit in cash, mean that businesses and advisers earning from managing wealth are likely in for tough times as they try to get these young adults to hand over a slice of the $30 trillion they are set to inherit.
Having said all this, life is tough for most young people and their prosperity has plummeted. In the US, a chunk of the wealth passed on to them will go to paying off the $1.3tn of student debt they have accumulated. Those in Europe will have nowhere near this windfall, which means that the very high numbers of 30-somethings living with their parents in countries like Italy and Spain is set to continue. Neither generation has money.
Back to the UBS report.
It’s a lovely idea that families and generations are coming together, and that being emotionally supportive and financially integrated are the ties that bind. But this is a luxury – an option for those who have. Money that is. I think we’re in for a longer period where most people, young and old, do not, will not, have the ability to choose to go their own way – they’re stuck, and in it together, come hell or high water. Let’s hope that here in the UAE, reintegration back to daily family life is not about managing financial strife.
Nima Abu Wardeh describes herself using three words: Person. Parent. Pupil. Each day she works out which one gets priority, sharing her journey on finding-nima.com