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5 things rich millennials do differently with their money than the rest of their generation

Rich millennials have different financial habits than the rest of their peers.
Rich millennials have different financial habits than the rest of their peers. Michael Dodge/Getty Images

  • Rich millennials have different financial habits than the rest of their generation.
  • Having come of age during the Great Recession, many millennials are wary of investing - but rich millennials are more embracing of it, especially when it comes to cryptocurrency and investing outside of the US.
  • Compared to their peers, rich millennials also sit on less cash and have a different picture of debt.

Rich millennials are of a different ilk.

Not only do they spend and display their money differently from rich baby boomers, they also have financial habits that distinguish them from the rest of their own generation. It's a unique distinction considering that life is, in general, more expensive today for millennials than it was for previous generations.

Investing is another area where rich millennials significantly differ from the rest of their generation. Being risk-averse is a hallmark of the generation that came of age during the Great Recession - but affluent millennials are more open to investing, SmartAsset reported. Specifically, they embrace investing outside of the US and investing in cryptocurrency.

Take a closer look at how the financial behavior of rich millennials sets them apart from the rest of their generation.

They are more open to investing.

They are more open to investing.
Many millionaires don't have budgets. Bryn Lennon/Getty Images

It makes sense that the wealthy, regardless of age, are open to investing - but it's particularly significant for rich millennials. As the generation coming into the workforce following the recession, most millennials are risk-averse when it comes to investing: In fact, 93% say they're wary of investing, according to Rebecca Lake of SmartAsset, citing a Capital One study.

Millennials are more cautious investors, partly due to trauma from past financial crises, reported Rachel Butt for Business Insider.

Wealthy millennials differ from their peers in that they're more embracing of investing and more likely to put their money in private equity and hedge funds, Lake reported: "Rather than being afraid that they'll lose money, many wealthy millennials seem to be confident that their assets will perform at the level they're expecting and that their investments will continue to gain value over time."

And according to a study by OppenheimerFunds and Campden Research, ultra-high-net-worth millennials are taking more calculated risks with investments.

They carry less money in their checkings and savings.

Generar riqueza requiere resistencia y perseverancia.
Generar riqueza requiere resistencia y perseverancia. Mark Evans/Getty Images

Because many millennials are risk-averse, many are also sitting on cash, according to a Bankrate.com report. This could be one of the costliest investing mistakes in history because it's one of the worst ways to earn any returns, reported Business Insider's Akin Oyedele.

A UBS report found that the typical millennial keeps more than half of their assets in cash, but less than two-thirds of affluent millennials do the same, reported Lake.

Rich millennials carry much less of their wealth in checking and savings compared to their peers, according to Shen Lu of MagnifyMoney, which analyzed data from the Federal Reserve's 2016 Survey of Consumer Finances.

"Although wealthier families carry eight times more in savings and checking than the average family - $84,000 vs. $10,300 - that's just roughly 14% of their total assets in cash, while for the ordinary young family that figure is around 20%," Lu wrote.

They're investing money outside of the US.

Duermen poco y trabajan más
Alan Crowhurst/Getty Images

Rich millennials are open to investing money outside of the US, according to Jake Halladay, a private wealth adviser for Bel Air Investment Advisors, who works with millennials with an average net worth of $25 million.

"Because of social media and the continued globalization of the world economies, millennials are becoming more familiar and comfortable with investing outside of the US," he wrote in a post published on Business Insider. "By expanding your investments across the globe you can increase your diversification and not become subject to the performance of a single country."

He added: "For example, our firm currently overweights Developed International and Emerging Market equities versus the US, as valuations in the US have become expensive relative to the world. Millennials are increasingly more comfortable with this outlook."

They're letting tech influence their money decisions and investments.

They're letting tech influence their money decisions and investments.

Yet another thing affluent millennials are more eagerly embracing is disruption, according to an Edelman report that surveyed more than 1,000 millennials ages 24 to 38 who have $50,000 in investable assets or an income of $100,000.

"Affluent Millennials are bullish on new technologies and industry disruptors for achieving their goals," the report states.

According to the report, a quarter of millennials use or hold cryptocurrency, and 31% are interested in doing so; three-fourths believe that technological innovations, like blockchain, make the global financial system more secure. Some are buying cryptocurrency to save for retirement, according to Bitcoinist.

They're even letting technology dictate their stock moves - the most popular millennial stock investments are all tech companies: Apple, Facebook, Amazon, Tesla, and Netflix, reported Howard Gold of MarketWatch, citing 2017 data from TD Ameritrade.

They have less student loan debt, but more mortgage debt.

They have less student loan debt, but more mortgage debt.
Jose Luis Magana/AP

Debt also looks different for rich millennials.

College tuition has more than doubled since the 1980s - and student loan debt is higher than ever. The national total student loan debt is $1.5 trillion, according to Student Loan Hero.

While many millennials are saddled with student loan debt, wealthy, older millennials tend to have less of it, according to MagnifyMoney, which analyzed data from the Federal Reserve's 2016 Survey of Consumer Finances to determine how millennials aged 25 to 35 allocate their assets.

"A significant chunk of the average worker's household debt comes in the form of student loans, making up close to 20% of total debt and averaging $16,000," wrote Shen Lu of MagnifyMoney. "In contrast, the wealthiest cohort carries about $2,000 less in student loan debt, on average, and this constitutes just about 4.6% of total debt."

However, with less student debt, wealthier millennial families have a larger share of mortgage debt, according to Lu.

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