Millennials Aren't Investing
Over time, investing among younger generations of people has fallen off the deep end, with only 12% of Millennials saying that they would invest found money in the stock market .To many, terms like “hedge” or “equity” seem more like gibberish, and the word “security” refers to the guys keeping you from jumping over the railing at the show you are at. But why? What has caused such a gap in financial literacy that has created a generation of Millennials as fiscally cash-conservative as their grandparents and great-grandparents were in the late 1920’s and 30’s (during The Great Depression)?
Millennials didn’t stop caring about their financial futures, they became frustrated and gave up with the resources they had access to. I know, because it happened to me too. I was tired of looking at confusing graphs and big words that I didn’t comprehend. I figured I could sit back and let what little disposable income I had sit in a savings account rather than put it into a brokerage account and pay up to $10 per trade for something I didn’t completely understand.
According to CNN Money the average interest rate on a savings account in the United States was just 0.06 percent in 2013. To quantify that, a $10,000 savings account would net you $6 in interest over the course of the year. Take inflation into account, and you would be better off planting it in the ground and hoping that a money tree grows (please do not actually try that).
There are daily reports blaming student loan debt on the reason why investing among 18-25 year olds is so low, with “some 71 percent of college seniors in 2012” graduating with student loan debt. Frankly, it seems that while accumulating this debt at these educational institutions, Millennials fail to learn anything about the stock market, which has seen an average return of approximately 9.87% per year over the last 30 years. And that number is adjusted for inflation. What this means is that an investment of the same $10,000 on January 1, 1983 could have equated to over $160,000 by the end of 2013 if invested in the S&P 500.
Overcoming Barriers to Investing
So how do Millennials overcome this obvious generational knowledge gap and learn to become financially literate, enough to be able to control our own futures? If it isn’t the daunting investor-lingo, it is the high commission costs and minimum account balances that many brokerages require. Until now, these traditional brokerages have had a stranglehold on the industry, but upstart, low commission brokerages have started to come out of the woodwork and into the limelight.
One such brokerage is DriveWealth. DriveWealth is aimed at conquering the two major hurdles that are preventing Millennials and new investors from entering the market; financial literacy and the sheer cost of placing a trade. DriveWealth’s free education and financial literacy resources help the new investor learn, while an easy to use mobile app and low commission cost of just $2.99 from anywhere in the world eliminates financial barriers. DriveWealth has opened up the literal and figurative borders to investing that were once faced by this generation and new investors as a whole.
DriveWealth is democratizing investing for the newer investor, and allowing Millennials that were once excluded from the market to be able to jump right in and become educated while making the effort to take control of their financial futures. They can read up on the many free educational resources provided, or use the Community forum that DriveWealth has provided to connect with cohorts across the globe to share known information and perspectives regarding different companies, sectors and markets. With its website and apps already in 3 of the world’s most widely used languages (Chinese, Spanish and English), DriveWealth is making strides to give the entire world the tools it needs and has been waiting for in order to be able to invest confidently. Visit drivewealth.com today to start on the road to taking control of your financial future.