The millennial generation, the demographic group that's currently between 21 and 35 years old, could be worth up to $24 trillion by 2020, according to UBS, thanks to higher incomes as well as entrepreneurial activities and inheritance. This is a massive amount of wealth, and here's how you could set up your stock portfolio to profit from it.

Millennial wealth could grow fast

One big driver of the wealth will be inheritance. In a recent report, UBS said the millennial generation will be one of the biggest beneficiaries of intergenerational wealth transfer in history. In addition, millennials are an entrepreneurial group -- millennials launch businesses twice as often as baby boomers -- and those who aren't growing their own businesses are entering the part of their careers where salaries tend to grow.

A group of millennials smile as they sit around a table, with food and drink in front of them.

Image source: Getty Images.

The key is understanding how millennials spend money

Perhaps the most important factor when choosing investments that could profit from the millennial generation is understanding how this group spends its money.

UBS points out in its report that millennials desire convenience and multi-channel delivery, with many millennials using social media as part of their shopping experience and doing more shopping online than previous generations have.

In addition, one of the most investable trends is that millennials value experiences as opposed to ownership. In other words, millennials would rather do things than buy things.

According to a report from Charles Schwab, millennials spend more on experiential and convenience-related expenses than previous generations have. For example, 79% of millennials report spending money at eating at "one of the hot restaurants in town," compared with 66% of Generation X and 56% of baby boomers. Seventy-three percent report spending money on live events, such as concerts and sporting events, while the percentages drop to 65% and 55% for Gen-Xers and baby boomers, respectively.

How to invest

Since millennials value experiences and convenience, we can search for companies that provide these things. Here are three examples of companies with millennial-focused business models.

One of my favorite ways to invest in the growth potential of the experience-based economy is through real estate. For example, EPR Properties (NYSE:EPR) invests in properties such as megaplex movie theaters, waterparks, ski resorts, and other entertainment and recreation businesses. The company has grown impressively in recent years and reports that spending in movie theaters has been very strong, especially thanks to trends such as high-end food options and more luxurious surroundings. The company also invests in education properties such as public charter schools, another high-growth trend.

Payment-processing company Square (NYSE:SQ) is another excellent millennial play, this time on the convenience factor. An investment in Square is a play on millennials' tendency to not carry cash, as Square aims to bring credit and debit card acceptance to small- and medium-sized businesses all over the world.

The company's growth has been impressive so far, with payment volume up by 33% over the past year alone, and service revenue more than doubling. Even so, about two-thirds of businesses around the world don't yet accept credit cards, so there's still lots of room to grow. Consumers -- especially millennials -- clearly prefer non-cash payments, and Square's lower-cost and easy-to-use platform could become a favorite of businesses around the world.

As a final example, internet-only bank BofI Holding (NASDAQ:BOFI) could be worth a look. Simply put, millennials don't go to the bank, so BofI's checking and savings products make lots of sense for millennials. Because of the bank's online-only business model, it doesn't have to pay for branches and other expenses involved with a physical banking operation, and it can offer higher interest rates on deposits than most of its competitors can. In addition, the low overhead translates into excellent efficiency and profitability, and the bank is growing fast. The combination translates into an excellent long-term opportunity.

Matthew Frankel owns shares of Square. The Motley Fool owns shares of and recommends BofI Holding. The Motley Fool owns shares of Square. The Motley Fool has a disclosure policy.