Why Millennials Are Not Investing

Research has shown that across the world, majority of millennials are not investing and this number is even steeper as a Nigerian millennial.

Of the many generations on earth today, Millennials are probably the most spoken about. Also known as Generation Y or the Net Generation, they are the sect of people following the Generation X and preceding Generation Z and they were born between the years 1982 to 1999.

They are known to be adventurous, hungry for social impact, and willing to follow their passions as opposed to working solely for money. However, one thing they are not very good at is investing in the stock market – or at all.

Research has shown that across the world, majority of millennials are not investing and this number is even steeper as a Nigerian millennial. In other words, if you’re reading this and you are under 37, chances are high that you are not investing in the stock market.

As opposed to investing, they either spend more chasing speculative businesses especially in the area of technology or simply sticking to the safest vehicles like holding savings accounts or just having plain cash which ultimately makes them lose money to the rising inflation rate.

There are many reasons for why these people are not investing – some are direct and others are a little subliminal.

The first reason for this is fear and this fear has come from a diverse range of areas. For one, the average millennial has witnessed the worldwide stock market meltdowns of 2001 and 2008 and has natural built a defence.

The parents of these millennials often have many ill stories of their losses or losses in the stock market they heard about and this only puts fear in the hearts of these youths. The risk of loss has made many millennials stay aloof when it comes to investing their funds in the stock market.

Even worse is the ripple effect of this breakdown as the culture of investing in the stock market would only naturally die down as the children of millennials would also naturally not invest in the market as much.

Another possible reason why the idea of investing in the stock market is not alluring is the shift to social media, telecommunication, and other aspects of digital technology in their era. Creating the next best app and making the next tech billion seems like a better cause to pursue than waiting for decades to reap the profit of their investments.

There is also a certain kind of impatience that comes with being a millennial. With awards praising young entrepreneurs and social media accentuating the “young and achieving” millennial, the goal is to not just make huge monies but to make it fast.

The truth is that regardless of what your money is used for, there is always going to be the possibility or risk of losing it. The added advantage the millennial has with investing in the stock market is time.

Thanks to the power of compounding, the average millennial that has invested for decades is expected to amass exponential gains from investing in the market. In today’s age where jobs are scarce and the state of the economy is dwindling, the average millennial is expected to have multiple sources of income.

Not surprisingly, this is why Yochaa was founded - to encourage Nigerians to see the Nigerian stock market as a viable source of income and financial sustainability.

Regardless of whatever the reason is for your failure to invest, the truth is that the sooner you start the process, the better for you and for your future. Not investing is no option.

Written by Lawretta Egba.