This is an excerpt from my book titled; PIVOT - 20 Trends For 2020 That Will Change Your Life Forever...and what you can do about it.
Tiny Houses, Minimalism & The Experience Economy
When comparing generations at the same age (25-34), home ownership for Millennials is 8% lower than their counterparts of the Baby Boomer and Gen X generations. Contributing economic factors include massive student loan debt, skyrocketing healthcare costs, flat real-wage growth and a shift in views on fixed assets vs. liquidity. There are also societal changes that impact when or if Millennials will ever buy a home. They get married later in life. They change careers multiple times before they’re 30. They do not value possessions over experiences. And the average birth rate per family continues to drop.
Among many significant impacts to our economy, these factors have created a phenomenon in the housing industry, often called, “Tiny Houses”. As I type this, you can buy a 1100 square foot, pre-fab, two-story “tiny house” on Amazon for $47,000 and have it shipped for free. Or if you want to go really small, they offer a 259 sq. ft. home for just under $20,000. Tiny houses, Airbnb rentals and ride-sharing services are all by-products of the start of an age of minimalism. In 2020, people will not get married, have two children, buy a house and two cars before they’re 35. They will push to pay off their student loans, live in nicer rental properties and travel before they ever consider taking on permanent responsibilities or owning expensive things. If you can live in a beautiful apartment and have Uber take you anywhere you’d like to go, why would you incur long-term debt only to limit your choices in life?
Of course, these trends will change the socioeconomic landscape forever. Much like Amazon has put retail giants out-of-business, minimalistic trends will greatly impact home construction, automobile manufacturing, raw materials companies as well as traditional industries up and down the supply chain. Without rooms to fill with furniture and televisions and trinkets, consumers will spend far less on home furnishings, utilities, insurance and maintenance.
Conversely, other industries will flourish. Community residential construction, ride-sharing companies, EV/AV manufacturers, tourism etc. will all grow due to the changing behavioral patterns of GenY and GenZ. Even Baby Boomers will look to offload dead assets and reduce their debt so they can travel and explore during their retirement.
By 2020 this shift will be well underway and there will not be a change of course back to how it used to be. We are living through the last days of materialism at this very moment. People will own less, live in smaller living spaces, have smaller families and spend more time creating new experiences than ever before.
2020 Pivot - Minimalism - Personal, Career and Investment Opportunities
Below are four things you can do to take advantage of the shift to minimalism in 2020:
Pitch-cat is the opposite of pack-rat - Objectively take account of your current life. Do you need to live where you live? Do you need all that stuff in the basement? Do you miss opportunities to travel because you’ve taken on too much debt or have too many dead assets. Take a chance, make a change, throw something away!
On the move - Evaluate new-economy companies for investment opportunities; Uber, Lyft, Airbnb, Tesla, Nio, Google, Apple etc. all benefit from a less-tethered society. These companies will continue to grow. You can make an investment or you can go to work for them.
Time is money - With fewer things to maintain and fewer permanent commitments to slow you down, use all of that free time to learn new skills, start a side-gig, help someone else in need. In 2020, you can have more time if you want it...use it wisely.
Create experiences - In the experience economy you can be the one having the new experience or you can create experiences for others to enjoy. Take your family on a once-in-a-lifetime vacation...and then do it again. Or, if you enjoy planning events for others, turn your favorite experiences into a new event planning company! This will be the biggest impact of a shift away from materialism. We all want to explore, travel to other countries, participate in a new activity. In 2020, with millennials leading the way, we will pursue these adventures more than we ever have before.