According to a recent survey, investing is a mystery for most millennials ages 18-34. They frequently don’t have the expertise or the capital necessary to pursue smarter investments. Our survey found that 56% of respondents identified lack of knowledge about investing as their top obstacle. For example, 52% of them name the unavailability of funding as their second barrier. This is particularly the case at a critical time. Over the next 20 years, the United States is about to undergo a generational wealth transfer of approximately €73 trillion.
Carl Hazeley, CEO of the financial insights platform Finimize agrees that education is key to tackling these barriers. He notes that investing knowledge can be acquired in just 5 to 10 minutes a day through various resources like newsletters, websites, and podcasts. The proliferation of mobile technology, specifically smartphones has partnered to make investing more accessible than ever before.
The Knowledge Gap in Investing
These survey results highlight a critical gap in investment education for young adults. Hazeley’s emphasis on the fact that most millennials, and members of younger generations, are not doing enough to ensure they’re ready for retirement. He notes that millennials and younger generations are sleepwalking into retirement. Yet with life expectancies increasing and new medications making it possible to live longer, they could soon live many years longer than they have the money to maintain such a retirement.
Even with all the information available online at anyone’s fingertips, Hazeley recognizes that full financial literacy is something difficult to attain. I can’t necessarily say that it’s available enough or that it’s as accessible as it should be to everyone. I know that’s a moving target, and that’s a goal that the industry should be reaching for,” he says.
With 42% of modern retail investors expressing that they would not invest if it didn’t align with their values, regardless of profitability, the need for tailored educational content becomes even more crucial.
Tools for Financial Empowerment
Finimize’s mission is to help close this knowledge gap, making sure everyone has the tools they need to be their own financial advisor. The platform includes a laundry list of tools and resources specifically designed to help build the net worth of one whole generation. Hazeley is blunt — education is the golden opportunity right now and should be taken advantage of. Through his marketing, he further appeals to today’s retail investor, empowering them to invest smarter.
He’s a huge proponent of the idea that you don’t need to be rich to begin investing. This conventional wisdom is both old and wrong. What was true 10-15 years ago was that there was a hard threshold of money, below which you couldn’t even consider investing. And that’s just not true anymore,” Hazeley says.
You need to start small and learn and iterate along the way, but investing doesn’t take a ton of money at first. For millennials, this change in thinking might just be one of the best things to happen to their financial futures.
The Implications of Inflation on Investment
Another key area that Hazeley focuses on is the corrosive effect of inflation on savings and investment. Similar to a stock market investment, he cautions that not investing has a cost that compounds over time. “If inflation is at 2% for 30 years: €1,000, it’s worth €500. And if inflation persists at, say, 10% for seven years, that €1,000 is worth €500,” he warns.
This grim situation makes it more important than ever for millennials to learn how to invest and take control of their financial future today. As online content becomes more prevalent, individuals can leverage these resources to make informed decisions.
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