Only 26% Of Americans Under 30 Are Investing In Stocks
Growing up during an economic downturn has scared Millennials, the 20-something Americans, into saving, they are also too cautious to do much with the money they put away.
About 85% of Millennials are stashing a portion of their paycheck, according to an online survey of 1,100 Americans conducted by digital ad agency Fractl on behalf of eBay Deals, published last Friday.
That is a larger share than the roughly 80% of their parents, grandparents and older brothers and sisters who save, the study found.
Young adults’ propensity to save is likely the result of coming of age during the Great Recession, when they watched the financial crisis hammer their parents’ retirement accounts and struggled themselves to find good paying jobs even with college degrees, says Chibuzo Okoro, who authored the survey at Fractl, a digital marketing agency in Delray Beach, FL.
“They are worried,” she said. “They are just anticipating being out of a job. You want to save as much as you can when you can.”
There is one problem about them saving and not investing
That very cautious mentality has pushed the 20-somethings to keep their money in the modern equivalent of “the Mattress” or in checking or savings accounts where it accrues little or no interest, instead of investing.
Only 26% of Americans under 30 anni are investing in stocks, an April survey from personal finance site Bankrate found.
They are very conservative and their fear of investing in the stock market means may are putting their savings in places where the money will not, does not grow enough to keep pace with inflation.
Instead, savvy financial advisers suggests Millennials divide their savings between an emergency fund in their checking or savings account that is equal to about 3 to 6 months-worth of expenses, an ETF (exchange-traded fund) to save for the medium-term and a retirement account.
Many millennials try to put away about 20% of their income each month, they are not investing in securities, many do not know how to do it.
That is a difficult goal for many young adults who are still paying down their student loans. More than 50% of 20-somethings are saving just 10% or less of their paychecks, according to the eBay deals survey.
A lot of investment of time and money is going back into careers, being flexible and maintaining their options rather than long-term retirement, or saving for a home down payment.
More than 50% of Millennials have delayed a major life event such as buying a house, getting married or having children, because of student loans, a recent Bankrate survey found.
The weight of that debt and its effects into other areas of their lives may be why 33% of young adults believe they are living below their means, the largest share of any generation, according to the eBay Deals study.
Many young Americans, some with college degrees, are working minimum wage part time jobs, or are unemployed and have no savings.
Stay tuned…
HeffX-LTN
Paul Ebeling
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