Surprised by the Financial Rewards, Willing
to Forego Short-Term Comforts
TD Ameritrade Survey Reveals a Third of
Self-Employed Millennials Run Start-Ups
This year, Millennials have surpassed Generation X to make up
the largest share of the U.S. workforce1 and will soon become the
nation’s largest living generation2. With nearly half (48 percent)
saying they would rather run their own business than be in a job
for which they are overqualified or do not enjoy, they may be the
most independent generation to date, according to a survey
conducted for TD Ameritrade Holding Corporation (NYSE: AMTD).
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Sixty-eight percent of the Millennials polled say working for
themselves has been more financially-rewarding than they expected
and half (50 percent) have seen their profits increase over the
past 3-5 years. This is in sharp contrast to older generations with
34 percent of self-employed Baby Boomers polled showing a decrease
in profits over the same time period.
A third (32 percent) of Millennial self-employed are running
start-ups compared to just nine percent of their Baby Boomer
cohorts. More than a quarter (28 percent) of the Millennials polled
say their technology-powered businesses could not have existed 20
years ago.
Independent … But Not Without Support
- More than one in five (22 percent)
Millennial self-employed used a financial gift or loan from their
family to fund their start-up.
- More than one in ten (13 percent)
Millennial self-employed are using a financial gift or loan from
their family to run their business. Only four percent of Baby
Boomers and six percent of Gen X said the same.
- Many Millennial self-employed (41
percent) rely on credit cards to help them reach their goals vs.
the average self-employed (34 percent). And, if they need
additional funding, 31 percent would turn to family compared to 20
percent for the average self-employed.
Willing to Make Sacrifices and Brave Economic Turmoil
Over half (58 percent) of Millennials surveyed are willing to
sacrifice short-term comfort for future success vs. 50 percent for
the total sample of self-employed Americans.
Millennial entrepreneurs show determination despite challenging
financial and economic headwinds. Over the past 3-5 years, the
Millennial self-employed feel:
- The cost of doing business has
increased (25 percent)
- The effects of government regulations
have negatively affected their business (22 percent)
- A raise in the minimum wage to $15
would not impact them (66 percent)
- Healthcare costs have increased for
their employees (17 percent)
Their Non-Retirement Long-Term Savings Goals
While almost half of self-employed Millennials (43 percent) are
saving for retirement, they are saving an average of $384 per month
for other goals, including:
- 52 percent saving for an unforeseen
emergency
- 39 percent saving for a vacation
- 31 percent saving for a down-payment on
a property
- 25 percent saving for a car or other
type of vehicle
- 23 percent saving for a home
improvement
- 19 percent saving to pay a child’s
education
Stress Points and Retirement Plans
There is a price to pay for being your own boss. Millennial
entrepreneurs forego regular income and traditional-employment
benefits such as company-sponsored 401(k)s with regular, automatic
contributions. Furthermore, the majority (70 percent) are anxious
about saving money for retirement from the earnings of their
businesses.
Despite these challenges, today’s self-employed youth have high
expectations including a retirement savings goal of $2.5 million –
more than twice the average goal for today’s Baby Boomers. Twenty
percent of Millennials surveyed have received professional
financial advice while 12 percent have used an online, automated
tool to create and/or manage an investment portfolio.
“From paying off student debt, to saving up for a down payment
for a home, to working through your 60s and even 70s, today’s
investors both young and old have multiple savings and investing
goals – a retirement plan is a good place to start,” said Dara
Luber, senior manager of retirement at TD Ameritrade, Inc., a
broker-dealer subsidiary of TD Ameritrade Holding Corporation.
“Today’s youngest investors have an incredible opportunity to ride
the market cycles over the long-term. But they shouldn’t
underestimate the power of the compounded growth that tax-deferred
investing and savings can have on a portfolio.”
Visit TD Ameritrade managing director of retirement Lule
Demmissie’s column for ten retirement savings mantras to help you
happily stick to a budget.
Set your small business retirement plans in motion by visiting
TD Ameritrade.
1: Pew Research Center.
http://www.pewresearch.org/fact-tank/2015/05/11/millennials-surpass-gen-xers-as-the-largest-generation-in-u-s-labor-force/.
2: Pew Research Center.
http://www.pewresearch.org/fact-tank/2015/01/16/this-year-millennials-will-overtake-baby-boomers/
The investment process, even if over a long term and with
diversification, does not eliminate the risk of experiencing
losses.
About TD Ameritrade Holding CorporationMillions of
investors and independent registered investment advisors (RIAs)
have turned to TD Ameritrade’s (NYSE: AMTD) technology, people and
education to help make investing and trading easier to understand
and do. Online or over the phone. In a branch or with an
independent RIA. First-timer or sophisticated trader. Our clients
want to take control, and we help them decide how - bringing Wall
Street to Main Street for 40 years. An official sponsor of the 2014
and 2016 U.S. Olympic and Paralympic Teams, as well as an official
sponsor of the National Football League for the 2014, 2015 and 2016
seasons, TD Ameritrade has time and again been recognized as a
leader in investment services. Please visit TD Ameritrade's
newsroom or www.amtd.com for more information, or read our stories
at Fresh Accounts.
Brokerage services provided by TD Ameritrade, Inc., member
FINRA (www.FINRA.org) /SIPC (www.SIPC.org)
Source: TD Ameritrade Holding Corporation
About Head Solutions GroupHead Solutions Group (U.S.)
Inc., is a leading market research partner for Financial Services
companies in North America. With offices in New York, Toronto and
Montreal, Head delivers the deep customer insights that increase
institutional knowledge and propel business action. TD Ameritrade
and Head Solutions Group are separate and unaffiliated firms and
are not responsible for each other’s services or policies.
About the 2015 Self-Employed SurveyAn online survey was
conducted with 1,505 U.S.-based self-employed adults aged 18 or
above by Head Solutions Group, between September 29 to October 9,
2015, on behalf of TD Ameritrade Holding Corporation. Sample was
drawn from major regions in proportion to the U.S. census.
Millennials are defined as ages 18 to 34 in 2015, Boomers defined
as ages 51 to 69 in 2015, Generation X defined as ages 35 to 50 in
2015. The statistical margin of error for the total sample of
N=1,505 adults within the target group is +/- 2.5% (assuming that
participants are the same as non-participants). This means that, in
19 out of 20 cases, survey results will differ by no more than 2.5
percentage points in either direction from what would have been
obtained from the opinions of all target group members in the
U.S.
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version on businesswire.com: http://www.businesswire.com/news/home/20151209005229/en/
TD Ameritrade Holding CorporationFor Media:Brendan
McManus, 201-369-8541Communications & Public
Affairsbrendan.mcmanus@tdameritrade.comorFor Investors:Jeff Goeser,
402-597-8464Investor Relations &
Financejeffrey.goeser@tdameritrade.com
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