Predicting the future by observing the past: Do millennials and The Greatest Generation share common financial threads?

In Strauss-Howe generational theory, generations of American society cycle through four archetypes, each lasting around roughly 20 years. The four archetypes consist of the prophetic (idealist), nomadic (reactive), heroic (civic), and artistic (adaptive) generations. These types are currently exhibited by the four living generations of Baby Boomers (born between 1946-1964), Generation X (born between early to mid-1960s to early 1980s), Generation Y (born between mid-1980s to 1995), and Generation Z (born after 1995), respectively. While it is controversial for Strauss-Howe theory to place Generation Y (millennials) in the heroic/civic category, given the negative connotation of the generation being narcissistic, easily offended, and self-absorbed, it is nonetheless useful in predicting the behavioral and financial habits for today’s young adults. Even more controversial to traditionalists is the realization that the last heroic/civic generation was the G.I. Generation, also known as The Greatest Generation, which came of age during the Great Depression and World War II. To learn how millennials will behave financially, and whether or not they will largely take up investment hobbies like coin collecting, it would help to learn from the habits of their earlier Strauss-Howe equivalent.

In the United States and several other countries, the boom was manifested in suburban development and urban sprawl, aided by automobile ownership. Photo by David Shankbone.

The peak of modern American coin collecting is usually considered to be around the mid-1960s. The G.I. Generation, at that time, would have been between 40 and 63-years-old. Despite the initial suffering this generation had to face from the Great Depression and World War II, the post-war boon that The Greatest Generation and Silent Generation profited from was extremely beneficial for the economy and investment hobbies like coin collecting. The latter of these two generations was nicknamed “The Lucky Few,” due to being born into such an economically prosperous period. This would leave these generations with a great deal of discretionary income compared to their more modern equivalents. While coin collecting was initially a more aristocratic hobby at its inception, the explosion of the middle class in the United States at this time made it an affordable hobby for more people. This is changing, however, given the shrinking middle class of today among the heavily indebted youth.

In an article by Catherine Thaliath, project management expert in the Retail Payments Risk Forum at the Atlanta Fed, millennials are generally described as being extremely risk-averse when it comes to financial matters. A study by the Federal Reserve indicates that millennials are financially suffering more than previous generations of young adults. This is exhibited by the lower incomes relative to inflation, fewer assets, and higher levels of student debt among millennials — who are also the most college-educated generation — with four-in-ten millennial workers aged 25 to 29 at least possessing a college degree in 2016. According to Thaliath, the financial woes of millennials are thought to be caused by a variety of factors, such as the dot-com collapse, the bursting of the housing bubble, and the Great Recession — disasters which occurred when the generation was entering the workforce. This is not unlike what happened to the G.I. Generation, which faced the Great Depression and World War II when they reached early adulthood. While there hasn’t been another World War since then, the aftereffects of 9/11 and the ever-evolving War on Terror has profoundly affected millennials in much the same way. As a result, both generations exhibited the traits of being financially risk-averse, with tales from the G.I. Generation hoarding sums of cash or jewelry in boxes under their beds during the Great Depression being a common theme. As a result, the Greatest Generation eventually became a fiscally conservative one that valued the importance of savings.

Millennials, on the other hand, mostly never had a chance to acquire anything to hoard, with the exception of the fabled “trust-fund babies.” The Great Recession hit many of them before they even entered the workforce or while they were still in college, and its effects were so profound on the generation that a 2017 survey showed that millennials were more afraid of credit card debt than of dying or the threat of war. It is this fear of taking on debt to build credit which is also hurting the millennials, preventing them from acquiring loans that would allow them to start a business or buy a home. Furthermore, Thaliath explains in her article that despite being financially risk-averse, millennials are shying away from investments like mutual funds in favor of immediate gratification by traveling or going to concerts. While not included in the article by Thaliath, an article by Greg Petro on Forbes details that millennials do not have a great deal of discretionary income at their disposal for a variety of reasons ranging from minimalist attitudes and excessively high debt and bills relative to their income. This lack of discretionary income among millennials does not bode well for long-term hobbies like coin collecting, which takes years of careful and calculated investment to amass a respectable collection (unless a millennial is merely purchasing a coin here or there for immediate gratification).

Generation Z will be one of the first generations to experience widespread Internet access from a very young age.

What does this mean for the future of the hobby? My advice is to skip worrying about millennial investment into the hobby until they grow older and have a more stable amount of discretionary income, like what eventually happened to The Greatest Generation after the economy stabilized following the Second World War. Generation Z, also known as the centennials, are now beginning to come of age, and I suspect that they will be more financially involved than the millennials were in a variety of economic endeavors. Many of them are too young to remember the Great Recession or 9/11 and their collective adverse effects have largely passed them over, which suggests that they will be less averse to financial risk-taking and will invest more once they start amassing their wealth. In a rebellion against their predecessors, Generation Z is also likely going to be more politically and fiscally conservative than millennials, and if the Strauss-Howe trend continues, they will become the new “Lucky Few.”

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Comments

  1. Louis says

    I’m passing this along for anyone who is interested. One of the Apollo 11 recipient organizations, the AMF- the Astronauts Memorial Foundation, purchased some coins at last week’s launch event at Cape Canaveral and had them graded by PCGS and also had Fred Haise, Apollo 13 astronaut (also involved in other space programs) hand sign the labels.

    The AMF was founded after the Challenger disaster and its mission is to honor fallen astronauts and promote a new generation of astronauts by promoting space education.

    Proceeds go to the AMF’s mission and the coins are available directly from them. I know they are not cheap, but these are first day label coins and the ones with the Fred Haise sig are only available from them and will have their own population number at PCGS. This is where they can be ordered: https://www.amfcse.org/apollo-11-50th-anniversary-commemorative-coin-program-2019

  2. just another dave in pa says

    I applaud Brandon Hall for this article although I don’t subscribe to the many assumptions and generalizations of the Strauss-Howe theory. It seems like an MBTI for generations.

    I like a more macro view of cultures and civilizations and the Spenglerian view , in particular. All civilizations go through the four seasons, the last of which is marked by Caesarism which many see as the Trump era. I don’t but I find The Decline of the West fascinating.

    All things are cyclical in nature including our beloved hobbies.

  3. cagcrisp says

    Wow…Wow…Wow…

    I Thought they would be Well Received.

    Years and Years and Years since this low a FDOI pricing

    FDOI for the 2019 Proof Platinum was 3,225 @ $1,420.00

    FDOI for the 2018 Proof Platinum was 4,420 @ $1,220.00

    No Money . No Money . No Money…

  4. cagcrisp says

    INCORRECT POST ^

    Should read…

    FDOI for the 2019 Proof Platinum was 3,225 @ $1,220.00

    FDOI for the 2018 Proof Platinum was 4,420 @ $1,420.00

  5. Buzz Killington says

    I bet they didn’t make many more Pt coins that that. Maybe 5000 out of the max 15000?

    Faced with the clear trend of declining sales, the Mint is erring on the side of minting too few coins, rather than risking getting stuck with too many.

  6. NCM Collector says

    Let’s hope millennials smoke less and save more money than the greatest generation. Pipe dream – pun intended.

  7. Dustyroads says

    Brandon Hall, An interesting subject. There most certainly are cycles that put us in a same type attitudes last seen 80 years ago. According to the book Pendulum we’re currently revisiting the same societal attitudes 80 years ago, and flip flopping on societal attitudes 40 years ago. The book puts forth a compelling argument that we will peak in this present trend in 2023. Out of curiosity I counted backwards starting at 2023 in 80 year segments. I didn’t like what I saw.

    You wrote, ” In a rebellion against their predecessors, Generation Z is also likely going to be more politically and fiscally conservative than millennials.” I don’t know, that doesn’t seem like enough time for real change to happen.

    I do believe there will be a rebellion, but like in the late 50’s when rock and roll and playboy magazine were making the scene, the next rebellion will come when this present trend becomes too burdensome and a new generation discovers once again what it’s like to live for self, a sort of 1960’s all over again. Or, a sort of 1880’s all over again.

  8. gatortreke says

    @ Brandon: The Strauss-Howe generational theory has always intrigued me since I read their book, The Fourth Turning back in the 1990’s. Thanks for the taking the time and effort to apply this theory to coin collecting in particular. Whether you believe or not, it does provide some food for thought and one possible road map to the future.

    This is definitely one article I’ve clipped to my Evernote coin collecting folder for future reference. Thanks!

  9. merryxmasmrscrooge says

    And we know the stock market is just based on speculation, not real gold, and the top 1% own half of it.
    As a millennial working two PT jobs with no health insurance or pension I’m not about to buy into this roulette game with the hard earned money. I’d rather invest in finishing mt Ph.D. and then buy coins from time to time.

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