Being a millennial in 2016 isn’t always easy, despite the often staged photos posted on Snapchat and Instagram. The reality for many equates to under-employment and debt.
Thirty-four percent of millennials are unsatisfied with their current financial situation and 54% are worried about their ability to repay their student loans, according to a 2015 study by PriceWaterhouseCooper.
The challenges in a post-2008 recession world are vastly different for us than it was for our parents.
Still, while the path of today’s young adult is different from prior generations, most of the same goals exist: starting a family, owning a home and being financially secure.
The problem is these goals are increasingly unattainable for a group that has an average out-of-college debt of $41,286.60, as cited by a 2016 Bloomberg report.
And I understand this.
In 2009, I left the University of Florida with both a bachelor’s and master’s degree but had limited ideal job prospects at the time. Did I mention I was also nearly $50K in debt?
After years of working hard and getting relevant experience, I eventually got lucky and got a job at a great company where currently, I have no complaints.
One of the best benefits of being at such an innovative company and spending time in Silicon Valley is that you get exposed to exciting, disruptive and often unbelievable technologies.
This exposure makes me extremely optimistic for my future and that of all of my peers. Here are three startups that will help broke millennials achieve their ambitious goals.
1. Point.com and the Innovative New Routes to Homeownership
For most people, the concept of housing involved a binary choice: either you rented the place where you live (whether it was an apartment, home, etc) and held no real equity ownership in the property, or you purchased a home and owned it by way of a mortgage or full cash purchase.
You either owned all of your residence or you didn’t. The opportunity of ‘fractional ownership’ was never an option, until now.
A new Silicon Valley-based technology startup called Point is helping enable a model where people can achieve home ownership, without fully investing and owning the whole pie.
The company gives you money in exchange for a percentage of your property, making it easy to get your dream home without the unbearable down payment. The trade-off is that when your house appreciates in value, the value of Point’s ownership stake in your house will appreciate as well.
So if you are a millennial who has your eye on a particular residence but is lacking the total capital required, new and innovative companies like this can help you accomplish your goal of owning your own home.
For many, owning 80% or 90% of their home is better than owning none of it. Now this is an option.
2. Tuition.io and the Growing Popularity of Employer-based Student Loan Assistance
As cited previously, a sizable portion of millennials entered the workforce with significant amounts in student loan debt.
Historically, this would be a burden carried solely on the shoulders of the borrower. Today, we are seeing a change that is providing relief for many young adults.
New companies are emerging that are helping students tackle this problem, while giving companies an additional tool to attract new talent to their organization.
Tuition.io is one of an increasing number of startups that offer employer-based student loan assistance, which mirrors the benefits of a company’s 401(k) plan.
Platforms like these enable companies to contribute to and match the payments that employees make to their student loans, helping them eradicate their debt sooner. Like Vangaurd or TIAA-CREF, Tuition.io works through employers to enable employee participation.
Only roughly 3% of all U.S. employers are said to currently offer this benefit, but that’s partially because this concept is relatively new. Big name companies that offer this benefit today include Aetna, Fidelity Investments, Nvidia and others.
So why would companies want to do this? The team at Tuition.io states that this differentiated perk helps improve recruitment efforts, reduces employee turnover and increases employee engagement.
Therefore, if you are working at a company that currently offers this or are hunting for a new job, take comfort in knowing that the challenge of eliminating student loan is one that you can now take on with help.
3. Wealthfront is Simplifying the Process of Investing through Algorithms
Unlike previous generations, millennials approach the finance industry with a stronger degree of skepticism and curiosity. After the financial debacle of 2008, it’s hard to blame them.
Estimates of the wealth lost during the last recession near $19.2 trillion, with other reports exceeding this.
Wall Street and the stock market are often perceived as intimidating, confusing and fraught with cheating. The problem is that financial security through long-term investing is still an important and arguably necessary action.
Wealthfront is a Silicon Valley-based company tackling the complexities, costs and confusion of investing, head on. The company describes its offering as “the most tax efficient, low-cost, hassle-free way to invest.”
Through the service, an investor can fund their account, create a customized investment profile and let the Wealthfront technology identify and purchase the right stocks and bonds. Because the platform automatically optimizes your portfolio, you can set it and forget it.
Furthermore, instead of dealing with financial advisors who charge management fees of over 1-2%, Wealthfront uses a combination of economic research and algorithms to offer this same service at a far lower rate of 0.25%.
This service means lower cost compared to traditional options and easier management through algorithmic-adjustments.
So, while our moms and dads may be comfortable paying financial advisors hefty brokerage and commission fees, today’s broke millennial doesn’t have to.
Between Point, Tuition.io and Wealthfront, today’s less-than-rich millennial is better positioned to dominate the challenges of adulthood.
These forward-thinking companies are just a tiny glimpse into some of the companies disrupting industries and making the access and usage of services easier for all consumers.
Minimizing the barriers to home-ownership, student loan resolution and long-term investing may be the starting point of what millennials have to look forward to.