If done with nuance, courage, and insight, investing in the stock market can be a very lucrative endeavor. But according to a new survey, millennials are choosing to hang onto their money rather than invest it in something that could ultimately turn into a losing proposition.
Only 18% of people between the ages of 18 and 25 choose to invest their money, according the Bankrate Money Pulse Survey. While 46% of Americans outside that age group do invest, millennials just don't see the stock market as an attractive place to put their money. Part of the reasoning is that they simply don't make enough, which means that not only will they not see a significant return on their investment by virtue of it being too small, but they also need every bit of their paycheck to support themselves.
Another reason millennials avoid the stock market is because they simply don't understand how it works. The common perception among young people is that investment returns come quickly, but according to Charlie Harriman, a financial adviser with Cloud Financial, it takes years of investing to make any real kind of profit.
"Since they're in their 20s, they think they don't have to hurry to invest," Harriman told Bankrate. "Older generations are a little more educated. They were a part of the financial crisis, so they've seen and experienced the downside of what the markets can do." Fortunately, there are now reads like Patrick O'Shaughnessy's Millennial Money to help young beginners invest.
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