Many of the Millennial Generation are not seeing investing as an option or as necessary. Not only for retirement but also just as a general way to grow what money they have quicker. I am surprised some financial discount brokerages have not catered or carved out an option in all their products to have one created for someone either in school or just young and do not know what to do with their money. By having someone provide their age or a school (.edu) email address should be enough to gradually show them how investing works by offering a cheaper commission package or platforms of some sort.
That is just an idea because these firms will soon see that the Generation X’ers and Baby Boomers will all but soon be tapping in to what they have put in to the market, and yet it seems few Millennial’s have any clue as to how to even navigate and execute a trade.
Case in point: I am 21 years old and only one of my friends actually has an investment account, and he’s actually doing pretty well with it. Though most of people my age are in college as seniors (Or credit-wise some point in junior year), I don’t expect any of them to have 401k plans yet because none of us have launched or started full time careers. But the fact that almost no one has a personal investment account, let alone an IRA of some type, is concerning for the future of financial well-being.
My point in bringing this up is that early on in the start of a full time career, a Millennial may not choose to open a personal investment account (Including an IRA) or a 401k because of the lack of knowledge but also because of the sizable bill every student is racking up right now. When people back in 2008 to even now say how my generation to even the generation under us will eventually have to pay for a national debt is starting to show specific effects. Slow rise in income will be our biggest burden.
I do not see how companies today feel alright with not raising wages from the middle on down. Companies are making profits and not in the red. The costs that are affiliated with the Millennial Generation will most definitely be greatest in the repaying of the four years of college where they incurred debt. For some, upwards of $100,000. And that amount could be seen for the kids going to Columbia, Yale, Brown, etc. The Ivy leaguers who are supposed to be first in line on the forefront of how a generation is lead in everything they do. In terms of economics I’ve been told by my professors to think of it like this: You forego or leave money on the table by being a full time student. Even if you have a part-time job while in school, which 80% of Millennial’s do, you still could have a full-time job and be making more at the point in time. So the foregoing of money means less to help pay off the amount you owe at graduation.
Rise is debt when starting a first time full-time job will mean less and less will be saved for retirement because of the fact that after 6 months of leaving school they will say hello to the first installment of payments from school (Many of which carry high interest rates; even if it is a government loan). Joining a companies 401k will not seem a viable option because of the thought of using money for “now” costs will be more important than saving for later.