In: Math
Look online and find an article published within the past 4 weeks that includes a reference to probabilities, means, or standard deviations. These articles might be discussing weather events, investing outcomes, or sports performance, among many other possible topics.
https://tickertape.tdameritrade.com/personal-finance/starting-behind-the-curve-millennials-and-money-15379
A recent New York Times story posed the question: Is life too hard for millennials?
Millennials are the most educated generation, yet they’re earning less, their median net worth is down, and many face decades of student loan payments (see Figure 1). Pair that with the uncertainty surrounding their retirement, and they appear to be facing a less-than-bright future. Not to mention that 1 in 5 millennials is also providing financial support to aging parents to the tune of $18,250 a year—taking a huge chunk out of their budgets. It’s no wonder they’re pushing off having families, starting businesses or buying houses.
FIGURE 1: ROCKY START. More debt and less income gives millennials a rough start to their financial lives. Source: TD Ameritrade Financial Support Study - Understanding Financial Obligations Across Generations, July 2015. Survey: Head Solutions Group.
Some people are pretty tired of hearing about the millennial generation and understandably so (a quick search of Google News pulls up more than 2 million results). But there’s a big reason we must understand them and their habits. In the first quarter of 2015, they surpassed Generation X as the largest chunk of the workforce. This means they are going to start to drive the U.S. economy as they enter wealth accumulation years. They are also expected to have a huge impact on the U.S. economy—spending $200 billion annually starting in 2017.
So it’s concerning that a 2014 TD Ameritrade survey revealed that younger generations are not necessarily making the wisest financial decisions:
Knowing the basics on investing, which will hopefully make your money grow, is as important as understanding how to earn it and to spend it. If you didn’t grow up learning how to save, budget, and invest, chances are you’ll be behind the curve when you start earning decent paychecks and accumulating wealth. That same survey also showed that only 10% of students reported learning financial lessons from a teacher or course at school. Where are millennials going to get this investing education? Well, it takes a village.
Millennials and the younger generations are going to have to do the hard work, but as a village, we can provide guidance and tools. Parents are still the number one resource for teaching kids about finance, but as financial professionals and business leaders, we can also inspire this next generation and propel them toward financial education and independence.
It is important that millennials wake up and smell the coffee, but I do have high hopes for this generation. They’ve seen a lot of turbulence early in their financial lives. But as history teaches, hardships we experience can also eventually make us wiser and hardier. Until that day comes, there are a few ways we can help this generation usher in a better plan for their financial future. So whether you are a parent, an educator or a millennial yourself, here are some tips to keep in mind that will help inspire and educate:
So my call to action for millennials is this: Life is a series of choices no matter how good or bad your starting point. No matter where your starting point, you can learn key personal finance and investment strategies now, perhaps alleviate some of financial pressure, and start to create the life you want.