I think it’s fair to say that most millennials want to be investing their money. At the very least, we understand how important it is to do so. Wouldn’t you agree? Well, according to this Harris poll, 79% of millennials are not currently investing in the stock market. Even if that statistic is half wrong, that still means that close to 50% of people born between the years of 1980 and 2000 aren’t investing their money in the stock market. Are you surprised? I was, at first. But in the process of diving a bit deeper into the statistic, I realized exactly why only 21% of us are investing our money in the market. Before we dive into the ways we millennials should be investing our money, we have to understand why the overwhelming majority of us aren’t investing at all.
1. Millennials Don’t Trust Wall Street
How could we?! With movies like The Wolf of Wall Street, and The Big Short being shoved in our faces, it’s understandable that we have a certain level of pessimism geared towards the big banks and investment firms. Not to mention, millennials have seen some of the most volatile times in the stock markets history with the dot-com bubble of the early 2000’s, followed by the crash in 2008. We have seen the aftermath of these events in the lives of our friends and families, and we are wired to fear the unknown.
2. Millennials Don’t Know How to Get Started
It is a major understatement to say that Wall street and the financial media have worked diligently to make financial concepts seem more complicated than they actually are. Turn on CNBC right now and try to comprehend 25% of the crap that those goof balls are babbling about. I work in personal finance, and even I struggle to stay awake listening to these guys. To top it all off, can you remember taking a single class in high school or college that covered personal finance concepts in any depth whatsoever? I can’t. No wonder we confused about how to get started!
3. Millennials Live in The Now and Don’t Like Commitment
Okay, I’m going to rag on our generation for a second – sorry. I think we are the most impatient generation of all time. We want the things we want, and we want them now. Trust me, I get it, I’m a millennial too! We are hardwired to expect results quickly, and who could blame us? Give any other generation access to the same technology we grew up with and they would be no different. Impatience can be a great tool when used to inspire change and fuel innovation, but not so much as it relates to investing and growing wealth. Making a decision that impacts the 60-year-old you is just not on most of our radars. Instead of making those decisions, we like to keep our options open – because hey, something better could come along, and we don’t want to miss out on whatever that opportunity might be. Again, not overcommitting ourselves can be a huge strength, but not as it pertains to designing and executing a plan to grow wealth.
4. Millennials Don’t Have Relatable Sources of Advice
This one is simple. Most of the information that is available to us from a money perspective is coming from people like our parents – old and out of touch with the millennial reality. Last time I checked, our parents grew up in a completely different political and economic climate than the one we live in today. What worked for them simply won’t work for us. Investments options are changing, and will continue to change with the constant surge in technology. The cost of college, housing, goods & services, etc. will continue to increase while wages continue growing at a much slower pace. We are up against a whole different beast when it comes to planning for our futures.
All this being said…
There is no excuse for missing out on the opportunity to invest and grow your money. This article is the first in a four-part series covering the ways we as millennials should be saving and investing our money. My hope is that this series can serve as a Financial Planning 101 of sorts for all of us who didn’t learn squat about money in school. Be sure to sign up for the blog! You’ll have copies of all The Cincinnati Financial Planner blogs sent to your inbox as they are posted to the site. Stay tuned as this series continues – I’m excited to dive into this topic over the next week or two, and help you design a roadmap to the life you deserve.
If you’re looking for some help, or want someone to confirm that you’re 100% on the right track, then check us out at TruWealth Planning and schedule a free intro consultation.