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What Happens When You Teach a New Generation Old Money Advice?

Why millennials deserve better than their baby boomer parents have given them

When I was a young man, the world of money was fairly straightforward. For the most part, you could do ok if you followed the old advice of go to a good school, get a good job, buy a house, save money, and invest in a diversified portfolio of stocks, bonds, and mutual funds.

As I got older, the world of money became more and more complicated. The dollar was taken off the gold standard, creating volatile swings in its value. Defined benefit plans, aka employer-funded plans, were abandoned in favor of defined contribution plans, necessitating investment in the stock markets by employees not financially educated. The financial adviser class rose as a result. And the world of money became increasingly global, making it harder to keep up on the markets. The result has been a baby boomer generation that is not ready for retirement, and a looming financial crisis.

One would have hoped that the baby boomer generation would have at least learned from their mistakes and focused on financial education for their children, the millennials, but they did not.

According to a recent poll by Harris, "Nearly 80 percent of millennials are not invested in the stock market."

When asked why:

• 40% said they don't have enough money
• 34% said they don't know how
• 13% blamed student debt

All of these are the symptoms and excuses of those who lack a financial education.

If you don't have enough money it's because you have never been taught how to make money outside of getting a good job—old money advice.

If you don't know how to invest it's because you weren't taught how money works and were probably told to save and buy a house—old money advice.

If you have so much student debt you can't afford to invest, you believed the lie that you needed to go to a good school to be successful—old money advice.

Top that off with the fact that millennials love to spend. In fact, a recent study shows that millennial men "are more likely...to withdraw money early for a purchase to pay for a vacation, boat, or wedding...They're also more likely to feel 'hopeless' when checking their savings balance."

And finally, as I wrote before, the state of financial education is abysmal. Only 13% of Americans received any education about money.

Bad financial education and bad financial decisions. It's no wonder millennials feel hopeless when it comes to money.

The good news is it's not too late to change hopelessness into empowerment.

If you're a millennial reading this, here are some things you can do to change your financial fortune.

Invest in financial education

Take charge of your financial future. Don't rely on or expect someone to do it for you. Examine your schedule and ruthlessly cut out activities that suck up your time but provide little value. Then, fill that time with a prescribed course of financial study. Read books and blogs, listen to podcasts, attend seminars and network, and find a mentor.

Stop saving for retirement

And start saving for investments. With your newfound financial knowledge, don't just sit on your savings. Put it to work in investments. And don't think that means just the stock market. Look into all four asset classes: real estate, commodities, paper, and business. Start small, learn, and build from there. Treat it like a real life video game.

Learn to delay your gratification

Once you start seeing some success investing, it will be tempting to "treat yo self." Don't. At least not yet. Rather, use you earnings to invest more. Once you master investing, then use you cash flow to cover your liability purchases like cars, vacations, and more. But only once you've replaced your salary with investment income. Until then, delay your gratification.

If you do these three things, you will change your financial fortune. And you will be light years ahead.