Millennials, people between the ages of 23 and 38 are some of the most risk averse individuals in modern day investing. With the fountain of youth and a vast variety of investment opportunities, millennials maintain a conservative approach to risk and investing.  A study done in 2014 by the Brooking institution found that 52% of millennials in the United States had their money stored in cash as compared to 23% by other generations. With age, education and access to information in their favour this statistic becomes even more baffling as amendments to early mistakes in investing can me made in future (Moskowitz, 2019).

“Conservative Black Chick” blog owner Crystal Wright argues that the risk aversion in millennials can be attributed to the relationship that these millennials have with their parents. A large portion of these millennials were raised in families where their parents were not actively involved in the stock market. When you consider averages, what is the likelihood that a child will deviate from the same investment decisions made by their parents? Like they say in literature “the apple doesn’t fall far from the tree”.

However, with the emergence of the internet, improvements in technology, greater access to information and education and plenty of investment opportunities, why are millennials still risk averse? Moskowitz (2019) states that millennials are sceptical around the issue of job security. In the context of South Africa and the current economic climate it would really be difficult to argue against their concerns.

To refute, is this this really a critical enough reason for millennials to refrain from the stock market? Is it not time that millennials migrate their funds from the overrated “32-day notice account, stokvels (pooling of equal funds saved for a common purpose) and other primitive and safe investments? Whilst it is understandable that these products have guaranteed returns, are the returns inflation beating and will they serve the millennial in the long run?

In the context of South Africa, smart people have created applications with the sole purpose of providing investment opportunities at a click of a button and returning the power to the investor. Applications such as Easyequities offer a ranger of investments from Tax Free Saving Accounts (An investment account that allows you to save up to R 33 000 annually and R 500 000 in its life time TAX FREE!), shares on the JSE and abroad, Exchange Traded Funds (EFT’s), cryptocurrencies and many other investment opportunities. Other notable investments are Livestock Wealth app that allows you to invest in cow breeding. For individuals that are not app savvy, the 52-week savings plan could be an option. These investment opportunities are mentioned with the knowledge of the high debt levels of most millennials.

According to Loudenback (2019) the average debt of millennials amounts to 27, 900 USD as compared to 8,000 USD in the case of baby boomers. With increasing living costs, high costs to access education, family contributions and other factors, it makes saving and investing an uphill battle for millennials.

However, as a millennial the chosen lifestyle, ignorant financial decisions and pure contentment create a habit of mediocrity in saving and investing.

Millennials are the bedrock of civilisation. Not only do they have age on their side, but the world is their oyster.  Their investments need to mirror their energy, vibrant and fearless. Challenges will always be a feature, but the stock market waits for no man.

Millennial! Take Charge of Your Life!

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