As of today, most millennial’s are now transitioning out of school and into the workforce. For most of them, they have probably seen a dramatic increase in pay after they got their degree and got the new job. Because of the extra capital, you would think that they would e investing for their future, right? Wrong! Many millennial’s are moving away from the “unstable and risky” financial markets even though they have historically provided the greatest returns and many millionaires. Why do millennial’s think it is so risky? Well, some of them don’t want to put their money on the line. They maybe saw their parents or other loved one’s struggle in the face of the 2008 financial crisis. In this article, I am going to be breaking down a few reasons why millennial’s aren’t investing.
1. Not enough trust in financial markets:
Like I said earlier, millennial’s may correlate investing with a possible recession. This shouldn’t be the case because after every recession, a stronger bull run has happened and has strengthened and grown our economy. This means that in the longer run, your money should grow. Some of this may be due to financial illiteracy that our school systems have failed to teach us. In the end, they don’t want to go through what many others had to back in 2008.
2. Attention spans are way too short:
Let’s face it. Learning how to invest the right way can take some time. You have to research companies, analyze charts, and go over the fundamentals of your investment. This is something that many are not willing to do. Instead, they’d rather invest a few dollars into a cryptocurrency and hope it shoots to the moon. Unfortunately, this is a very, very rare occasion. I feel like the single biggest advantage a young investor can have is learning and knowing how to trade. This way, you can maintain control of your investment while knowing what you are invested in. All in all, why would someone want to read a book on investing when they can use that money for present pleasure? This is what I’m talking about.
3. Older people telling us to invest early:
When we are young, we are told to start young and to start early. However, young people generally don’t have a great sum of capital to invest up front. The little money that they do have is going towards rent, college, food, and other necessities to try and build a better life for themselves and their family. Plus, some of the people that are feeding them this knowledge don’t have a comfortable nest egg for retirement or they were wiped out during the last recession. However, I think the media gets us with most of this.
All in all, investing is nothing you should be scared of. Instead, be scared of not investing and retiring a poor person. Find out ways that you can make money investing and don’t view it as such a risky activity.
Davenport Laroche’s headquarters are strategically located in Hong Kong which allows investors to benefit from the busiest trading market in the world, China.