Blog | Personal Finance

Millennials with Money - Are They the Ultimate Losers?

Even if they decide to go against the conventional advice of going to college, and getting a job, millennials with money don’t always know what to do with it.

Here’s how the world’s up and coming generation can win financially.

• Millennials with money aren’t necessarily rich

• Poor advice has caused the most educated generation - millennials - to have the worst financial understanding to date.

• Financial literacy provides confidence and strategy to millennials with money.

When Robert Kiyosaki was a young man, his poor dad (his biological father), touted the importance of going to a good school, getting a high-paying job, and investing in a “diverse” portfolio of stocks, bonds, and mutual funds.

Today, that advice is no different. The question is, how is that advice paying out for millennials with money across the globe?.

The answer: not well.

According to a 2016 report by The Guardian:

• Prosperity has plummeted for young adults in the rich world.

• In the US, under-30s are now poorer than retired people.

• In the UK, pensioner disposable income has grown prodigiously – three times as fast as the income of young people.

• Millennials have suffered real terms losses in wages in the US, Italy, France, Spain, Germany and Canada and in some countries this was underway even before the 2008 financial crisis.

What we are seeing is a generation of middle-class children, now young adults, raised on conventional middle-class financial advice being completely left behind when it comes to their financial future.

Meaning, millennials with money are hard to come by, and aren’t necessarily rich.

The left behind generation?

Make no mistake about it; this is one of the most urgent financial challenges of our time.

Today’s millennials are faced with a tale of two economies: will they accept the narrative that the rich have decimated their financial prospects, or will they wise up to how money really works and educate themselves financially to thrive in a world where the conventional advice about money doesn’t work?

Most recently, we’ve seen this play out in US politics. Those who accept the narrative about the rich ruining the financial prospects of the millennials are sick and tired of being poor and are looking to “take back” their country from the rich by replacing the capitalist democracy the US was built on with a socialist democracy.

On the other hand, there are many young people who don’t want socialism. Instead, they want a new way of opening opportunity within the capitalist system that gives them a fair playing ground against the corporations that have gotten into bed with the US government.

The difference between financial winners and losers

At over 72 million, millennials are dominating the workplace and our culture. They are arguably the most influential generation to date.

The problem is, their financial education is limited, at best. Today, millennials with money are increasingly losers at the game of investing. The question is, how can they become winners?

A truth that will never change is that there are always winners and losers in life and in business. But have you ever stopped to wonder what the difference is between the two? Is it just sheer luck, or is there something else at work?

There is a distinct quality that winners have that losers don't—a certain way of looking at the world. That is not to say that winners don't lose. Everyone does. But the difference between losers and winners is often the way in which they approach losing. It starts with mindset.

Millennials - are you a giant, or a worm?

Check out this statement below:

Giants often trip and fall,

But worms don't, because

All they do is dig and crawl.

The main reason so many people struggle financially isn't because they aren't smart or hardworking. It's because they are afraid of losing. Rather than take a risk to become a giant, and experience the falls that come with the process, they instead choose to stay low to the ground where it's safe and there's no risk of falling. They've already lost because the fear of losing stops them.

Losers cut their winners and ride their losers

Fear of being a loser affects what people do in strange ways. At Rich Dad, we’ve come across people who bought a stock at $20 and then sold their shares at $30 because they were afraid of losing what they had gained. And then they watched the stock go up to $100, split, and go up to $100 again.

Ironically, that same person who bought a stock at $20 will watch it go down to $3 and still hang on, hoping the price will come back up. This is an example of a person being so afraid of losing, or admitting they lost, that they wind up losing big.

This is a major reason that millennials with money aren’t actually winners. Because of the poor advice they’ve been given, they’re afraid to take the necessary risks to ultimately become rich. On the flip side, they’re equally afraid to admit failure.

Winners cut their losers and ride their winners

Winners do things almost exactly the opposite. Often, the moment they know they took a losing position, i.e., their stock price begins to go down instead of up, they will sell and take their losses. Most are not ashamed to say they took a loss because a winner knows that losing is part of the process of winning. When they find a winner, they will ride it up as far as it can go.

The moment they know the free ride is over and the price has peaked, they cut and sell.

The key to being a great investor is to be neutral to winning and losing. Then you don't have emotionally driven thoughts, such as fear and greed, doing your thinking for you.

This is the key differentiator that millennials with money need to understand so that they can confidently build their wealth.

Financial education gives confidence

Did you know that the millennial generation is the most educated generation in US history? Nonetheless, they had the highest levels of unemployment in 2020, and still make 20 percent less than their parents did at the same stage of life.

That’s because their financial education has been stifled, to say the least.

After reading this blog, you may be asking, "How do you know when you have a winner, and how do you know when it's the right time to get off the free ride?"

Put simply, anyone who is a winner financially has a great financial education. They have learned from books, seminars, and coaching. Most importantly, they applied their knowledge and learned from the mistakes they've made. Each loss is an opportunity to learn how to gain later on.

Millennials with money aren’t necessarily losers. They are, however, at a severe disadvantage because they don’t fundamentally know how money and investing works in the real world. The good news is they can rise up and win—if they apply themselves to financial education.