David Lerner Associates: National Entrepreneurship Week: Millennials vs Boomers
As America focuses attention on entrepreneurs this week, one of the troubling statistics is the slow decline of startups. Census data and other studies show that the number of companies less than a year old had declined as a share of all businesses by nearly 44 percent since 1978. As every entrepreneur knows, starting a new business can be very challenging. It requires talent, skill, and resources.
There does seem to be a generational factor at work here. Many of the successful entrepreneurs of our age are Boomers – Steve Jobs, Richard Branson, and Bill Gates come to mind. Even today people over 50 are out there starting new ventures. Millennials, those between 20 and 35, are not so keen on being entrepreneurs. [2] In 1996, young people launched 35 percent of startups, and by 2014, that number had sunk to 18 percent.
While these young adults are digital natives, and technology holds no challenges for them, they do tend to be more risk averse. According to the Global Entrepreneurship Monitor (GEM), 25-to-34-year-olds are significantly more worried about failure than their older counterparts.
Millennials are also less financially literate than Boomers. A recent FINRA Investor Education Foundation study, The Financial Capability of Young Adults—A Generational View reveals that Millennials display low levels of financial literacy. Only 24 percent were able to answer four or five questions correctly on a basic five-question financial literacy quiz. Lacking confidence in their financial skills could be the root of this problem, as starting a business requires financial savvy.
What Millennials can do to improve their financial literacy
Start with the basics: Take that simple financial quiz. Learn how to answer these basic financial questions correctly.
Find a trusted source: There are many websites and blogs online that cater to the Millennials’ need to improve their financial knowledge. Browse the web, and find a source that resonates for your situation.
Talk to a professional: An experienced financial and investment advisor can point you in the right direction. They’ll help you figure out a plan to gain more knowledge, and devise a strategy to improve your financial health.
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