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The Investing Advice Every Millennial Needs to Hear

It’s hard to be a millennial these days.

Everywhere we turn, we see stories on how record levels of student loan debt are killing millennial’s chances at homeownership. Meanwhile, money woes for millennials mean many are putting off marriage, quite possibly for good. And according to government figures, the unemployment rate for millennials still hovers near 15 percent – a statistic The Atlantic used last year to claim that millennials “have it worse than any generation in the last 50 years.”

Yes, millennials have it rough. They’re living in their parent’s basements, struggling to keep the cabinets stocked with Ramen, and wondering which move to make next.

It’s all tragic and indisputable. Like it or not, being under thirty these days isn’t easy – at least in an economic sense.

The Millennial Advantage No One Wants to Talk About

But here’s the thing: Millennials have one huge advantage – one huge gift – that they almost refuse to recognize. This gift is something so valuable that it transcends every other item of value on Earth, and it’s something that is finite, at least on an individual level.

That’s right; millennials have time. Time to save. Time to pay off debt. Time to cultivate their passions, skillsets, and careers. Time to invest in the future. And yes, time to invest in a financial sense too. Because as we all know, the magic of compound interest is far easier to harness when you’re young.

So, Why Aren’t Millennials Investing?

Unfortunately, a recent survey from revealed that millennials aren’t taking advantage of the one thing working in their favor – their youth. According to the survey, which polled 1,001 adults to gauge millennial attitudes on investing, only 26 percent of individuals under the age of 30 owned stock in early 2015.

Survey participants listed several main reasons why they choose not to invest, none of which are surprising. More than half of those who don’t invest (53%) use a lack of financial resources as their excuse, while another 21 percent said they didn’t know enough about stocks to take the plunge. The rest cited a general distrust of stockbrokers and worry over paying too much in fees. Related: See how much you are paying in fees with our Fee Analyzer.

Those are all good reasons in theory, but disastrous when applied to the real world. It makes you wonder – what will happen to all the young people who fail to save and invest while they’re young?

“Young people who don’t invest in equities early are set to have a lot less money later on,” John Salter, associate professor of financial planning at Texas Tech University, told after analyzing their survey results.

“They won’t benefit from those extra years of letting their portfolio grow, eventually earning the ‘interest on interest’ that generates real wealth,” he said, adding that “it’s just the simple value of compounding.”

In other words, millennials who fail to invest won’t have enough money to retire. Instead, they’ll need to continue working indefinitely, subsist on government assistance and social security, or shack up with their own kids in old age.

Retirement: It’s the End Game

If you’re a millennial, you might find those ideas preposterous, or even hilarious. But don’t start laughing yet. Here are a few facts from the National Council on Aging that you might want to chew on:

According to the NCOA and various government agencies:
• 23 million Americans over 60 are already living in poverty
• 75 percent of those 65+ rely on social security alone
• One-third of senior households lives paycheck to paycheck
• In 2012, the average credit card debt among adults aged 65+ was $9,283
• 14% of adults aged 65+ face retirement with negative net worth

When you look at what actually happens to people who don’t save or invest enough to enjoy a comfortable retirement, it isn’t so funny. In fact, the idea of living in your son’s basement at 70 stops being hilarious the moment you realize that it’s not only possible, but actually likely.

And maybe it’s just me, but spending retirement in poverty sounds a whole lot worse than being 25 and having student loan debt and a job you hate. Because, no matter what, you still have time. You have time to stop and think – time to make a change. Time to tackle your student loan debt with fervor. Time to get a second or third job. Time to go back to school, finish your degree, write a book, or improve yourself in a multitude of ways.

Your future self doesn’t have that privilege. When you’re 75 and subsisting on frozen Hungry Mans, it’s the end game. You’re stuck with whatever future you, yourself designed. And if you happen to look around and think “this sucks” in old age, you’ll only have yourself to blame.

The Investing Advice Every Millennial Needs to Hear

And that’s why it’s more important than ever to start investing as soon as you can. You may think you can’t afford to, but the truth is, you can’t afford not to. Your future depends on what you do here and now, and your “future self” is begging – pleading – for you to take action not just now, but yesterday.

The internet is a treasure trove for those who want to learn investing basics. Meanwhile, Personal Capital offers free tools that can help you monitor your spending, net worth, and growing portfolio of investments. You may not have a lot to start with, but you have to start somewhere. Whether you choose to start by socking away $50 or $100 a month at first, investing in your company 401(k) up to the match, or opening a traditional or Roth IRA with a brokerage firm, it’s essential that you take that first step. Because, no matter what, no one can take it for you.

When you’re in your twenties, you think the world is something that happens to you. You wake up each day with the goal of doing the best you can with what you have; you react to your surroundings. You shrink at opportunity. You see maybe one or two years out, or perhaps five years or a decade, but you just can’t picture yourself as a little old lady, no matter how hard you try.

But the years will creep by faster the older you get, and soon you’ll look back and wonder where the time went. And if you think investing is hard now, just wait a while. The longer you sit idle, more impossible the idea of retirement will become.

So here it is, the investing advice every millennial needs to hear:

Don’t use student loans or anything you hear on the 24-hour news cycle as an excuse not to save or invest for your future. Sixty years from now, nothing will matter except for what you did with the resources you had.

You have more power and potential than you realize, but time goes by much faster than you think.

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  1. Millenial

    “Yes, millennials have it rough. They’re living in their parent’s basements, struggling to keep the cabinets stocked with Ramen, and wondering which move to make next.”


    • Holly Johnson

      Hey, I was being sincere! =)

  2. Ashley

    “Lack of financial resources” isn’t an excuse not to invest in stock (or tuck some money away, somewhere). There are a lot of options between investing like you’re Warren Buffet and investing nothing at all. I started investing in stock last year, at 26, with a serious lack of financial resources (having drained my savings after being laid off from one job, and scraping by after settling for a temporary $10/hour part time job just to make ends meet). Even putting #25, $50 or $100 every month (or whatever you can afford to lose) into startups, penny stocks and reputable companies with shares under $10, is a good way to start. It won’t make you rich overnight, but ten years will pass whether or not you invest… and even if you wind up choosing dud stocks, being ten years older and finding a little bit of extra spending cash is a lot better than being ten years older and having absolutely nothing.

    • Holly Johnson

      I agree with you. When I started saving for my kid’s college, we did $25 per month in each account. It added up over time and now they each have thousands of dollars already at ages 4 and 6. It’s amazing what compound interest can do.

      • Juan Perez

        The market has had a great ride and all this talk of investing is great insofar as, people need to put money away for the future. However, when you speak of compounding interest and the stock market, be aware that the market can come crashing down, as it has enough times in the past. Investing and saving for the future should not be referred to as one in the same.

        • Steve

          The market may come crashing down at times, but it will always recover (given enough time). That’s the golden rule: The market ALWAYS goes up. Hence why the article is meant for millennial age folks. If you have the time and a little bit of thick skin, your portfolio will always recover.

  3. Patty

    Hi Holly,

    I absolutely loved your article. Millenials have to change the way we look at money. While many people feel they don’t have enough, if we change the way we think about money we are likely to have enough to invest. It may be a small amount, but small investments can grow to larger investments over time!!!!


    • Holly Johnson

      Yes! And the earlier you start, the better.

  4. Chris Reeves

    I’m 24 with a net worth near 50,000, all from invest in a Roth IRA and a taxable account. I urge all of my friends to save and invest now for the same reasons you stated above. Sadly, I’m in the extreme minority and I hope that my generation will take retirement seriously before time gets away from us.

    • Holly Johnson

      I agree with you, Chris! All I ever hear is excuses. Some of them are valid, some not.

  5. Freddy

    So let me get this straight… millenials can’t afford to save for retirement but they can’t afford not to…? Sweet elitist rhetoric. Any more advice?

    My household income is $70k a year (I’m not a millenial – age 32) and when our health insurance was raised again, we had to choose between paying for health insurance and student loans (which is a fallacy anyways, the government makes us pay for those things) or maintaining our paltry $100 contribution a month to our IRA. And people have the audacity to question why recent grads eating Ramen and working 3 jobs to survive cannot invest?

    All off this “millenials need to learn the power of investing” reeks of the brokerage industry realizing their customer base (and gravy train) is about to dry up in 20 years. Oh well… you created it.

    • Anonymous

      The author has somewhere in the ballpark of 100k in student loans.

      • Holly Johnson

        Me? I have zero dollars in student loans! Sorry, you have me confused with someone else.

    • Jason

      The brokerage industry and Wall Street have nothing to do with someone’s lack of desire or inability to save. Using them as scapegoats is like someone accusing McDonald’s for them being overweight. The concept of investing should be used not only as a means to support oneself in retirement (rather than expecting governments or companies to do it for them) but also because of the belief in the ingenuity of the human race and the companies that provide their services.

    • anon

      You chose to buy a house you obviously cant afford. You could have rented and saved more. You chose to by property while you were in debt. You are in this state because of your decisions, life is hard, but you have only yourself to blame for the situation you are in.