3 things millennials get wrong about investing

3 things millennials get wrong about investing

It’s safe to say that millennials have experienced a lot of financial trauma. From the stock market crashing, to the second financial crisis, the great recession and now a pandemic-inflicted recession. Millennials have grown up learning/witnessing a very volatile global financial market, so how does that impact/ hinder their investing habits?


  1. Millennials spend at the rate of their earning


It could be argued that because of all the financial volatility millennials have experiences, many are less cautious about their finances than they should be. Having witnessed their parents and grandparents exercise extreme caution and penny-pinch only to end up in a recession, many millennials may think that the best way to live life is in the moment and as such, spend for right now instead of saving for the future.

Millennial culture is often synonymous with upgrading. More money means, new iPhone, new house, new car. When money comes in, it quickly goes out to satisfy this idea that more money means immediately upgrading to an elusive better life. But in actuality, more money should be saved for reinvesting to secure a steady stream of income which will ensure a much more sustainable better life. 


  1. Millennials are not saving enough


Spending at the rate of your earning goes hand-in-hand with not saving enough. What does this have to do with investing, you ask? Every investor has to start from somewhere. A recent study showed that 46% of millennials surveyed say they aren't saving enough money and 39% say they expect to be forced to work beyond retirement age. This statistic is a little depressing and somewhat considering now is the time to save, and prepare for retirement. 

If you’re excuse is: “but I don’t make that much money”, please refer to our free savings goals calculator. Putting aside any small amount for a prolonged period is saving. Whether it’s KES 500 or KES 50,000

This month our themes have been ‘earning more’ and ‘paying yourself first’.  Mastering these habits are vital in assisting you to not only secure a future and manage emergencies but also situating you in a position where you grow your money and achieve financial freedom through your investments.


  1. Millennials often don’t take informed risk


A recent study from BlackRock researchers found that 59% of millennials are more likely to hold onto their savings than invest. Adding to this, another survey from Global Investment Survey found that millennials are becoming increasingly risk-averse revealing that 85% of millennials consider themselves financially “conservative” when it comes to risk tolerance.

A huge part of investing is taking informed risk. Defined, investing is to “put (money) into financial schemes, shares, property, or a commercial venture with the expectation of achieving a profit.”

With investments there is not always a guarantee of making a profit but there is always the expectation, following an informed decision to invest.

Essentially, investing can be considered informed gambling. It’s imperative you do your research, weigh the pros and the cons, talk to people, study the market and all of this considered, puts you in the right place to make a profit. 


Still need a little help when it comes to investing. Check out our FREE investable blueprint here. This guide is designed to help direct you on how to build a solid investing plan as you work to help secure your financial future.



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