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.
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).
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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