Investing is about putting money to work so it generates a positive return over time. The earlier investors start, the more money they can make, making an investor’s 20’s vitally important. So why aren’t more millennials participating?
The Benefits of Investing Early and Often
Looking solely at the benefits, it’s hard to understand millennial reluctance to invest. Investing just $100 per year starting at 20 years old, with a minimum 5% return, would mean $17,667.02 sitting in a bank account upon retirement age (65). Doing the same thing, but starting a decade later? $10,035.23. While still substantial, investing earlier means 76% more money available at the age 65 – a huge difference! For investors who can sock away $100 a month instead of $100 a year, the numbers get into six figure territory.
With a help from a professional, or even a little research, achieving returns beyond 5% are well within reach. Yet despite these proven benefits, only 26% of people under 30 are investing in the stock market – a shockingly low figure.
Why are millennials eschewing future benefits and staying away?
The Reasons Millennials are Reluctant
Surveys and think pieces abound why millennials have cold feet, but the main culprits are usually the same: lingering student loan debt, a lack of knowledge about investing, and, by extension, a lack of confidence. The latter is the biggest culprit, and it doesn’t discriminate based on age group – people who lack investing education fear they will make poor choices and lose their hard-earned cash. It isn’t difficult to understand why 61% of millennials describe the stock market as “scary” or “intimidating” when placed in that context. This lack of investor education creates a vicious cycle: learning how to invest early helps build confidence, which provides the impetus to continue investing; not investing means a continued lack of confidence, which means staying on the sidelines.
There is widespread belief that technology provides the answers to help millennials over the hump. Investment startups like robo-advisors are cropping up, with features like automated investing, low fees, and an emphasis on transparency. These “Fintech” companies often seek to simplify investing, removing the intimidation factor by breaking down contributions into smaller pieces. Companies are also leveraging interactive content to reach younger investors – educational videos resonate in a YouTube, Instagram, and Facebook-dominated world. These tools are engaging ways to demystify investment concepts, inspiring the confidence needed to save (and invest) for a better future.
Tickeron.com is seeking to be a leader in this new financial world. In addition to having over 3,000 financially-related articles in its online “Academy,” it has also developed user friendly Artificial Intelligence tools to help new and experienced investors generate investment ideas. Tickeron’s A.I. is capable of evaluating a portfolio and providing a “Diversification Score,” to tell the user how well-diversified their portfolio is. It can also generate investment ideas for a user’s 401(k) plan – even if you’re just getting started! The A.I. will give you ideas based on your risk tolerance, investment objectives, and the options available.
Tickeron’s new financial website is available to beginners, intermediate investors, and even experts and advisors. Explore tickeron.com today.