Lately, there has been quite a bit of talk surrounding an event that is becoming known as the great wealth transfer. Essentially, this event describes the transfer of wealth from baby boomers to millennials, a move that is expected to lead to inheritances of more than $68 trillion and a class of consumers holding five times more wealth than they have today.
The bottom line here is that millennials will soon be where the money is. As a result, investors that make changes to prepare for this wealth transfer have the potential to reap serious rewards.
One of the best ways to claim your piece of the pie here would be to invest in quality companies that are geared to supporting the millennial lifestyle. This is a lifestyle where pen and paper simply don’t exist, a lifestyle where simplicity is more valuable than intricacy and a lifestyle where the latest and greatest in tech take center stage.
So, what publicly traded companies should investors be looking at in order to take advantage of the great wealth transfer? Here are a few names to pay close attention to.
Uber (NYSE: UBER): Transportation For The Millennial Consumer
Uber is a company that has thrown a wrench in the taxi and transportation industry. The company’s business model is centered around the Uber app. With the application active, users can request rides to the destination of their choice.
Importantly, due to the fact that Uber drivers are consumers who use their own vehicles to make extra money with the app, the company has cut down the cost of a taxi-like service considerably.
For millennials, this is a match made in heaven. First and foremost, owning a car comes at a cost and many millennials are finding that opting to use Uber, rather than owning a car, is a much lower cost option.
Moreover, millennial consumers do just about everything on the phone these days. So, ordering a ride from a mobile phone application just seems to fit into the lifestyle that these consumers are so used to living.
All in all, Uber provides a low-cost, simple and technologically savvy solution to traditional transportation issues. When it comes to millennials, you simply couldn’t ask for more. While Uber has lost over 20% in value since its IPO a short while ago, there’s a strong argument that the current valuation of the company, coupled with its focus on the millennial consumer, make the stock one to watch incredibly closely.
Mogo (NASDAQ: MOGO, TSE: MOGO) – Money Management The Millennial Way
As mentioned above, the millennial consumer does just about everything on his or her smartphone. From research to ordering products and even dating, today’s smartphone is the millennial’s doorway to just about everything.
Mogo is a money management application that has the millennial focus at the center of just about everything it does. Through the Mogo app, consumers can check their credit scores, protect their identities, apply for loans, learn about saving and investing, and much more.
When it comes to the right time to get involved, there couldn’t be a better time than now. Mogo is edging up on its millionth user, making it one of the largest fintech companies in Canada today. At the same time, the market is far from saturated, opening the door to a massive opportunity ahead.
The company continues to attract consumers with a simple, yet intuitive user platform. In about three minutes, users can sign up and have access to all six products offered by the company, including its digital spending account with a Platinum Prepaid Visa Card.
From there, millennials have the ability to track their spending, credit and more to make wise financial decisions without the headache associated with traditional money management.
It’s important to remember that today’s millennial is focused on a healthy lifestyle. As Lululemon Athletica captures the millennial drive for fitness, Mogo is challenging traditional banking in Canada, offering a millennial-friendly route to financial fitness.
As the company continues to throw a wrench in the traditional banking industry in Canada by catering to the millennial consumer, it’s creating strong opportunities for investors around the world!
Lululemon Athletica (NASDAQ: LULU): Today’s Millennial Is Anything But Lazy
While Millennials are constantly looking to simplify life, they are anything but lazy. This is especially the case when it comes to consumer health. In fact, about 76% of millennials exercise at least once weekly. That’s a big jump from the 64% of baby boomers that exercise daily.
At first glance, you may think that this means that it would be a good idea to invest in fitness clubs, like planet fitness. Unfortunately however, the high overhead cost of these types of businesses make them hard to deal with when tough economic times may be ahead. Considering the global trade war and geopolitical unrest hitting the tape at the moment, this isn’t the safest of bets.
However, companies focused on making fitness beautiful are worth paying attention to. Think about it. Millennials are interested in working out, and want to look good doing it. That’s why companies like Lululemon Athletica are so interesting at the moment.
Lululemon Athletica is a company that’s focused on providing the apparel needed for working out and looking good doing it. The business model is working well. The company has consistently posted higher than expected earnings and expects to produce double-digit earnings gains each year through the year 2023 at the very least.
With a focus on the millennial consumer, a bottom line that is growing in multiples, and a market that seems to be primed for high-end workout wear, Lululemon Athletica is a stock that’s hard to ignore.
Shake Shack (SHAK): The Millennial’s Dining Experience
Another trend that seems to be making its way through the market has to do with how the millennial eats. The millennial eating experience is more of a healthy, social experience than what we see from other generations.
While millennials are interested in healthier foods however, they are not willing to wait. This has led to chains of what are being called “fast, casual” restaurants popping up left and right. Arguably, the company that has been most successful in catering to millennial interests in dining is known as Shake Shack.
Shake Shack resembles fast food. Orders are met quickly and the price is relatively low when compared to the sit down restaurant experience. However, a big difference here is the quality of food.
Like most restaurants that this group of consumers would frequent, Shake Shack is focused on making great tasting food with high quality ingredients. The company has successfully taken pretty big risks too. In fact, Shake Shack was the first large restaurant chains to offer a meatless burger to its guests, providing a healthy and sustainable alternative to beef.
As the restaurant continues to grow in popularity among the millennial audience, it is also becoming an investment opportunity that’s hard to ignore.
Netflix (NASDAQ: NFLX): A Millennial Driven Entertainment Experience
Millennials have become famous for being cord cutters. After all, this group of consumers has access to so much entertainment online that paying for services like cable television simply doesn’t make sense.
In fact, it’s the millennial drive to cut the cords that has led to a rise in streaming services like Netflix, Hulu, and Disney+.
Netflix is one of the first companies that turned streaming entertainment into a subscription service and is by far the biggest player on the field.
Recently, the stock has been under pressure as concerns surrounding competition in the space start to arise. However, this pressure seems to be fading as investors realize that the leader in streaming entertainment isn’t likely to go anywhere any time soon.
All in all, Netflix has a strong hold on the streaming entertainment industry and is generally a first choice among millennials, making it a stock worth having in your portfolio as the great wealth transfer commences.
The most successful investors have a knack for finding stocks that represent companies that the masses will spend their money with. As millennials become the richest generation of consumers, investing in companies that taylor to this generation is likely to be a fruitful endeavor. In my opinion, the stocks above represent some of the largest of these opportunities.
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