Published by Pete Mullen and the Carson Wealth Investment Committee
From one millennial to another, I wanted to take some time to discuss the lack of saving and investing done by our generation. It seems like the number of millennials that continue to live paycheck-to-paycheck continues to surge. Whether this is because of student loan debt, life style choices, spending habits, lack of a disciplined budget or just excess living expenses, the number continues to grow. All of this leads to a lack of investing by millennials, and this could be problematic for our generation. According to a survey done by Bankrate, only 26% of people under the age of 30 are investing in stocks, compared to 58% of Baby Boomers.
In my opinion, there are three reasons as to why people in this generation do not invest or are afraid to invest: They do not trust the markets, they are not educated on the topic and they do not have the excess income that they can invest with. For the millennial generation to succeed, it is imperative that this changes.
Growing up, I always had a checking account and a savings account. In my mind, the savings account was untouchable. Unfortunately, there is a cost to being liquid and that cost is no earnings. Going forward, I will continue to maintain my savings account; however, that money will be my emergency fund. It will be a fund that I can use for immediate cash needs like car repairs, medical bills or miscellaneous extraordinary expenses.
I feel that we each should have a savings account for immediate cash needs, however, there are opportunities for growth in the stock market. In a savings account, if we are lucky the return is minimal. If you can invest with confidence, investing in the stock market may provide you with the potential for a higher rate of return.
According to a survey by Goldman Sachs, only 18% of young adults trust the stock market as the best way to save for the future. 93% of millennials say that both distrust of markets and lack of investing knowledge make them less confident about investing.
Millennials need to become better educated and more confident in our decision making and ability to invest in the market. Without an investment strategy, it is too difficult to pursue your income goals by simply working your day job. One of the ways to create a smart investment strategy is to build a relationship with a trusted advisor, someone who can help you pursue your goals, a financial advisor.
Creating a personal financial plan with your advisor can help you diversify from just a savings account and invest with confidence in the market. A Wealth Advisor can not only give you financial planning advice, but can help you establish how you’re going to pay off student loans and maintain the lifestyle you are used to. It is never too early to start building a relationship with a trusted advisor.
Recently, Carson Wealth lowered their investment minimums. Contact a Wealth Advisor today to get started and invest with confidence.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. No strategy assures success or protects against loss. Investing involves risk including loss of principal.