In our profession we get to meet and help a lot of amazing people, and they all have their own unique stories. Some have been diligent and amassed a nice nest egg for retirement while others have had set-backs that affected their ability to accumulate wealth. In either case, one of the comments we hear most is, “I wished I had started saving and investing earlier,” even from the disciplined savers and investors who couldn’t possibly spend all their money. People often wished someone had talked to them when they started earning money as a teenager or young adult. I understand that when you are young, planning for retirement is about the last thing on your mind. People are busy with schooling, starting a career, raising a family or buying a first home. However, having the discipline to start saving early can pay off huge in the future.
When we meet with people and they express their wishes that they had started earlier, they will undoubtedly mention their children and how they want them to be better off than themselves. Many of our client’s children fall into the “Millennial” generation. A Millennial is someone between the ages of 18-35 and they have just surpassed Baby Boomers as the largest living generation, according to the U.S. Census Bureau. They grew up in an era of technological innovation and have spent more time and money for schooling than any other generation before them. However, only one in three of them invest in the stock market. Why would a generation that can operate almost any electronic device like it’s embedded in their DNA and are highly educated choose not to invest in their future? Here are a few of the main reasons:
They buy “experiences”
Millennials want to experience the world. They value traveling to different destinations more than they value money in the bank.
With all that education comes some heavy student loans that may eat up most of their paycheck, leaving little to invest.
Keep in mind most of this generation is old enough to remember the “Great Recession” during 2007-2009. This has turned their view of the stock market to negative. (The stock market has since tripled in value.)
Marriage is for the birds
Many are putting off marriage into the latter years. This means they are trying to make ends meet on one income instead of two, which leaves less funds to save or invest.
Technology kills (sometimes)
Yes they are tech savvy, but sometimes that can hurt you. They are relying on apps to help them become educated with investing rather than a real person. This leaves them not understanding investing and they become frustrated, so in turn they do nothing.
The days of working for a company for 30-40 years are fading into the sunset. Most Millennials will have five to 10 different careers in their working years. That’s not a bad thing, but many choose to cash-out retirement funds rather than roll them to IRAs or new 401k plans. What this means is every time they start a new job, they are resetting their retirement funds to $0.
No risk, no reward
Many Millennials shy from risk and they associate the stock market with risk. They’ve been raised around people saying they “lost everything” in the stock market and had to keep working. They don’t want that to happen to them. What they aren’t considering is how markets rebound and how diversification can help during the inevitable downturns.
If you’re reading this and you fall into the Millennial generation, don’t think that I am coming down on you, because I’m not. I’m a Millennial myself. We are innovators, entrepreneurs, caring, accepting and have that same drive to be successful like the many who have come before us. What I will say is don’t let all the negative information that bombards us by the minute cause you to lose sight of your future. Remember when it comes to investing, time is one of the best things to have on your side. Put down the cellphones and I-Pads and start having the face-to-face conversations with your parents and grandparents. Schedule an appointment with a financial advisor to educate yourself about investing. Then make your decision.
If you’re a parent reading this and want your children to do better than you did, take some time to talk to them. Share your story of how you became successful, warn them of mistakes you may have made, and offer guidance. At Peterson Wealth Services, we are always willing to start the investing conversation with the next generation. Please use us as a resource.
The information contained in this report does not purport to be a complete description of the securities, markets or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Shaun Peterson and not necessarily those of Raymond James. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC, 1523 E Skyline Dr., Suite C, South Ogden, Utah, 84405, 801-475-4002.