Millennial Entrepreneurs Have an Independent Streak ... and the Financial Support of Their Families

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 Corporation
Millions 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 Group
Head 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 Survey
An 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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