It can be difficult to settle on what a millennial is — but in general, it’s someone who was born between the years 1980 and 2000. When it comes to investing, however, we actually know quite a bit about this often-discussed generation. In fact, as the millennial investor set continues to grow, their points of view could very well contribute to the financial landscape in the future.
- Millennials’ investment strategies will matter. Millennials could potentially contribute massive amounts of investment into the capital markets in the future. “Over the next four decades the millennials are going to inherit some $40 trillion,” explained Abigail Noble of the World Economic Forum in a recent Harvard Business Review interview noting that many millennials may be drawn to impact investing.
- They’re taking advice. While many believe that millennials are a generation that is crafting its own path through life, they demand plenty of guidance when it comes to decisions on finances. More than half of millennials receive financial advice from their families, as well as financial institutions and professionals, according to a 2014 Wells Fargo study.
- Millennials remain confident in the stock market in terms of investing for retirement. Nearly 60 percent of millennials believe that the stock market is the “best place to invest for retirement,” concludes the same Wells Fargo report. That figure is similar to their parents, 66 percent of whom feel the same way. However, only “slightly more than half of millennials have started saving for retirement.”
- Millennials not saving for retirement plan to do so by 35. According to the same Wells Fargo report, “those that aren’t saving [for retirement] expect to begin at age 35.” But the sooner you invest, the better. Consider the scenario below, also highlighted in our retirement planning article, that shows the difference between someone who starts investing at 35 years of age relative to 25 years of age: