Why Millennials are Failing at Investing

Travel, home ownership and liquid cash emergency funds take precedence for many Millennials over investing.

Michael K. Spencer
· 5 min read

One of the things that separates a middle class Millennial from more serious social mobility is good investing. However, Millennials as a cohort aren’t investing in Wall Street as much as older cohorts.

Millennials Don’t Know How to Invest

While three quarters of millennials have their money in their savings accounts only 41% put their money in growth vehicles like stocks, bonds or government investment schemes like GICs or RRSPs.

Millennials have come under criticism in recent years for their reportedly reserved approach to investing.

They appear to trust cryptocurrency investing more than Wall Street and have struggled to find career stability amid rising student loan debt, higher home prices and general wage stagnation on their watch in the first half of their professional lives.

While Millennials seem to have fueled the “experience” economy, investing doesn’t appear so far to be one of those experiences. Millennials would rather travel and find work-life balance that suits them, and their financial literacy with regards to investing seems worrisome. Successful Millennials don’t fail at investing though, according to research.

Are Millennials Too Risk Averse?

Investing is the key area where rich Millennials significantly differ from the rest of their generation. Being risk-averse is a hallmark of the generation that came of age during the Great Recession — but affluent Millennials are more open to investing, SmartAsset reported.

The great recession of 2008 has seemed to have frazzled the prospects of many older Millennials who will likely have trouble saving for retirement, just as GenX is showing signs of failing at this as the Middle Class slips and deteriorates.

Millennials are hesitant to invest in the stock market, according to a survey from Bankrate in 2018. Only 23 percent of those aged 18 to 37 say that the stock market is the best place to put money they won’t need for 10 years or more. While GenZ is showing they will prioritize home ownership, Millennials are kind of slackers when it comes to “settling down”.

Millennials like crypto, but oddly not the stock market.

It’s due to 2008 that Millennials favor crypto over Wall Street and it could signal a shift in how social mobility works. There’s a good reason so many millennials are hesitant to put their savings into the stock market: many have seen investments collapse. Actually, the same goes for the cryptocurrency market.

Older Millennials have a unique perspective since they remember the dot com crash of the early 2000s while experiencing the financial pain of the 2008 crisis. This gives them a memory and an experience of financial hardship few other cohorts can relate to. This might also signal not their reluctance to invest, but their inability to do so given higher debt to income realities.

Photo by Raychan on Unsplash

Surviving in an Era of “Permanent Uncertainty”

The rise of underemployment, part-time work, a false hope Gig Economy and many other factors are squeezing Millennials into a permanent state of financial uncertainty. Career and stability have for the most part not always worked out for Millennials.

Millennials may avow a love for cash because they are in such desperate need for it.

Investing for things like retirement may also seem too far off for many younger Millennials who want to own a home and build the life they are making. They may not have the disposable income or savings to actually invest in a way that would be significant or they may feel the stock market is not a win-win game for them. Millennials may also possess values that are less compatible with the intuition of Wall Street than those of cohorts in decades past. One of the promises of cryptocurrencies is the idea of a more decentralized world that’s more peer-to-peer friendly and not as top-down.

Photo by Andressa Voltolini on Unsplash

Millennials Cash Friendly “Experience Addicts”

In 2018, with little hope for a pension that half of those over 60 enjoy, 41 percent of millennials have no retirement savings. But cash isn’t going to do it. It’s only common sense, right? You can’t save enough to get the nest egg you’ll need in retirement without the benefit of the power of compounding you can get from investments. Yet somehow, many Millennials don’t seem to get it. This is why it’s not a myth to say this group is failing at investing and saving.

Research suggests millennials have largely resisted investing, instead favoring “safe” vehicles like savings accounts and plain cash. This is unfortunate and demonstrates they may not have inherited the savvy financial literacy of baby boomers and other more entrepreneurial leanings of immigrant parents, for example.

Stock market returns simply outperform savings accounts by wide margins, even digital bank savings accounts, GICs and so forth. Yet Millennials continue to avoid the stock market relative to GenX and especially baby boomers. The Millennial approach of “cash-under-the-mattress” is the worst possible financial strategy for the long term.

From FOMO to Reality

Almost three-quarters (72 percent) of millennials list owning a home as a top priority, according to Bank of America’s 2018 Homebuyer Insights Report. Yet many find themselves unable to save for a deposit for their first home while covering ever-rising rents. Millennials seem to think home ownership is a better investment than the stock market.

Cash is entirely appropriate for your emergency fund or your travel fund, but not for building sustainable financial security and growing your financial mobility. Millennials reacted to 2008 with a FOMO and seize-the-day mentality to life and work.

However as far as growing their savings, it appears they have neglected investing smarter in that strategy. Now as they get older and as they have growing families they may want to pivot to better diversification of their hard-earned income.


Discovering the optimal lifestyle of the future.

Michael K. Spencer

Written by

Blockchain Mark Consultant, tech Futurist, prolific writer. LinkedIn: michaelkspencer


Discovering the optimal lifestyle of the future.