Hey Millennials, for the Best of Life’s Experiences, Mix Strategy With Spontaneity

The following column from Jennifer Pagliara, CapWealth Senior Advisor, appeared in The Tennessean on June 23, 2017. Read it at The Tennessean here.

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How many times would you go see your favorite musical performer or band? Five, ten, twenty times? One of my friends traveled to D.C. this weekend to see Dave Matthews for the 34th time.

While he was there, he also caught the U2 show, a group he’s now seen seven times. When he told me this last week, I was amazed.

Then listening to the radio on my way to work the very next day, the deejays asked their listeners to call in and talk about what band or singer they’d seen the most. A woman called in claiming she had seen Widespread Panic 150 times.

Widespread panic

My jaw literally dropped. That’s an enormous commitment of time and money, and the woman was only 30 years old. The media loves to talk about how much my generation, the millennials, values experiences over physical possessions. But this was revelatory for me. As I drove down the highway, I confess to experiencing some widespread panic myself.
I love concerts just as much as the next person — provided that person isn’t this woman. I have definitely seen some of my favorite bands and performers more than once. There’s just not enough music fanaticism and too much responsible financial adviser in me to see anyone 150 times!

The cost of a concert experience

It’s one thing to see a show in the city in which you live, but something else altogether if you have to travel. Let’s put some numbers around going on an overnight trip to see a concert in another city.

  • Concert ticket: According to a report by Pollstar, the average cost of a ticket in 2015 was $74.25. Obviously, this is going to vary depending on who you see and if you’re getting the ticket at face value or rebuying through a service like StubHub.
  •   Plane ticket: According to the Bureau of Transportation statistics, last year the average domestic U.S. ticket price was $346.72.
  •   Lodging: The average hotel price in 2016 was around $125.
  •   Food & alcohol: While you’re traveling, you’re going to have to eat out and alcohol at the concert venue isn’t going to be cheap. Let’s be on the conservative side and say you spend a total of $75.
  •  Transportation: Don’t forget the rides to and from the airport, going to eat and getting to and from the concert. Let’s add in another $50, which again is conservative.

The total spend on this two-day-and-one-night experience? $670.97. Multiply that by 150 and you’ve got $100,645.50. Let that sink in a moment.

Deferring today’s pleasure for more tomorrow

Now think in terms of retirement — which is how I instantly thought of it when I heard her on the radio. Let’s say a 30-year-old put that total in an investment account today. How much money would that be when that person is 65?

Assuming an annual 7 percent return on her investment, which is the average annual return of the S&P 500 adjusted for inflation and accounting for dividends since 1950, her account would be worth north of $1 million. Learn how that happens in another of my columns.

A million bucks, my dear fellow millennials, can buy a lot of experiences. The original 100 grand could provide a sizeable down payment on a house. It could launch a business. The possibilities are endless.

Mix strategy into your spontaneity

I don’t mean to moralize. For all I know, the woman on the radio is prudently saving and investing. And like her, I too believe in experiences. After all, what is life but a long (hopefully) and, in the main, satisfying (again, hopefully) sequence of experiences.

But I’m a firm believer that not only whims, but planning and discipline, too, achieve invaluable experiences: freedom from financial worry, the resources to maintain an enjoyable lifestyle and take memorable trips, the ability to send children to college, security in retirement and much, much more.