Blog | Personal Finance

Should the Younger Generations Invest?

Real Life Experience can be the Best Teacher

This last decade or so we’ve seen one of the biggest debt increase that this country has ever seen. And it has been no secret that millennials specifically are struggling with debt. The quality of life keeps increasing, college tuition fees are rising faster than the amount of financial aid available. We are in a society that likes to spend more than we earn, have flashier cars and designer clothes, and hide our financial problems. It seems to be a big competition on who has the best “stuff” instead of who has the best financial education.

But beneath the flashy and shiny surface, personal debt is climbing, and more and more millennials are living with their parents (some of which are already in their 30’s).
Is there a solution? I think so.

Technology has been great, don’t get me wrong, but it has also killed the one tool that seems to be the best teacher of all: real-life experience.

College students are forced to do simulation labs to “learn real life examples”, but those simulations are still created and formulated to give them certain results.

Millennials more than anyone need the real-life experience. I believe the place to start is investing. It’s the perfect way to learn about financial stability and financial freedom.

Starting Young

Millennials have time on their side. By this I mean in terms of compounding interest. The earlier they can invest and the longer they hold on to their investments, the more return they are going to see. Not only does this teach patience and control, it teaches you how to watch the market and understand how it interacts with your investments. It also teaches you how to recognize trends in the market. When you put all of that knowledge together, it’s possible to know where and when to move your money to capitalize on a gain or hedge a loss.

Are there going to be mistakes made? Most definitely. But like I said before, real-life experience is the best teacher and the best motivator for success.

With that being said, some people want to skip the hard lessons and are often pulled towards the get-rich-quick schemes and overly risky investment strategies. However, the failure rate compared to the success rate of those kinds of investments are undoubtedly stacked against you.

But surprisingly enough, most millennials want to play it safe. I think they are starting to realize that long-term strategies are a sure way to get long-term returns. The low-cost, diversified risk of investing, especially in the real estate market, is an option that I think many millennials are starting to find enticing.

Getting Real About Retirement

There is a statistic going around that less than half of millennials are saving for retirement. I think it comes with our society and how short-sighted everyone seems to be now. Are millennials retiring anytime soon? No. But going back to what I said earlier about the rising costs of living, they need to start preparing and investing today so they have a comfortable living when that time comes.

I would hope that people are starting to realize that we can’t depend on Social Security, Medicaid and Medicare to take care of our needs. The earlier we start teaching our kids this, the better off they are going to be in the future.

The lessons learned from investing are invaluable. There is so much to be learned and as a result, so much to be earned.

So, should the younger generations invest? Absolutely. Get out there, start getting educated and find the investment strategy that works best for you and do it!