- 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.
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.
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.
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.