According to a recent survey conducted by Bankrate.com, a personal finance site, just 26% of people under 30 are investing in stocks. That’s compared with 58% of people between the ages of 50 and 64.
The beginning of a career is the best
time to start investing, and thus it is particularly troubling, says Claes Bell, a banking analyst at Bankrate.
“The nice thing about any money that you put in then is that it’s going
to have so much time to grow,” he said.
Meanwhile, it’s hard to prioritize investing and saving
for retirement when you consider you are too young to think about that — there’s more
than the feeling of invincibility that’s typical of youngsters that’s
keeping them away from the stock market. What is more important here is that a lack of money and
information are the biggest reasons why the under-30s are light-minded
about stocks.
18- to 30-year-olds were the most likely to cite not knowing enough about the market when asked why they weren’t investing. In fact, 38% of survey respondents under 30 gave that reason for staying away from stocks.
“People aren’t coming into their careers and in their earning years with the practical knowledge to invest.” Just 17 states in the United States require financial literacy education in high school, thus it is a problem of the education on a large scale.
But above everything, the biggest thing hampering youngsters' willingness to invest is a lack of funds. As 42% of survey respondents under 30 responded,
the main reason they’re not investing in the stock market is because
they don’t have enough money.
This group has been exhausted by unemployment and underemployment as a result of the Great Recession. Staggering levels of student debt also made it difficult for young people to establish a steady income that leaves room for saving.
The personal finance resource admits that the Great Recession has affected 20- and 30-somethings’ relationship with investing in other ways. “They’ve seen a lot of turbulence in the stock market and I think it’s understandable that people may be a little bit wary,” Bell said.
