According to a recent article on CNN Money, Millennials (those aged 18-29) are three times more likely than their peers to keep their money in cash instead of in the stock market. This is due to a continuing lack of trust in the stock-market due to the recent financial crisis. As such, Millennials are more inclined to keep their money in cash rather than invest in a potentially risky market. However, many are concerned that not investing at all is a poor financial decision on the part of Millennials. According to the article:
…losing out on investment returns could spell trouble for many down the road, said Bankrate (the organization who carried out the study) chief financial analyst Greg McBride.
“The preference for cash and aversion to the stock market among young adults is very troubling considering this age group has the biggest retirement savings burden,” McBride said. “They won’t get there without being willing to assume a little short-term price risk in their long-term money.”
This lack of trust in the stock market perhaps opens the door for other investment options to become more popular. Peer-to-Peer lending and other new investment options often present themselves as more trustworthy than the traditional stock market. This trust as well as the lower amount of risk that is assumed with these forms of investment perhaps will be more appealing to Millennials. This could help lead to the growth of these investment options while simultaneously causing more Millennials to invest their money.
Read More- “Millennials love cash” (Blake Ellis, CNN Money)