Black Tuesday. Black Friday. And most recently, Black Monday. The stock market has had some dark days, that can’t be denied. Investing remains the next great frontier for millennials, with many of us putting off or downright avoiding our start to investing.
I get it. I bought my first stock just one month ago. I’m a total investment newb and I can admit to it. My status as new kid on the block doesn’t matter though, because this is the block to be on.
We’ve got to get over our fear of the stock market and start investing now – and I mean right now.
There’s a million articles out there about how millennials aren’t doing things. We’re not getting married, we’re not having kids, we’re not moving out of our parents’ house. Somewhere on the list, they usually get to the fact that millennials are also not investing in the stock market.
Why Aren’t We Investing?
Millennials are a cash heavy generation. Most of us are keeping our cash in low interest savings accounts. It makes sense: we’re a generation shaped by the stock market totally bombing and destroying people’s lives.
While employment and income are up in general, millennials will never really recover from the Great Recession. We’ll never get back those years of under or unemployment, and we are deeply affected by the changed jobscape that is now the world’s reality.
Companies learned to get by with fewer employees, lower wages, and more outsourcing during the recession. That has remained the case in a lot of areas. Millennials, even as we’re finding more jobs, are still carrying debt, are making less money than our positions offered two decades ago, and are stabilizing our finances much, much later than any previous generation.
What we want is security. The stock market seems like a needless risk. Why put our money, which we’ve worked so hard for so long to finally get, into a thing that regularly goes up and down? Into something that has wrecked lives, including a part of our own?
Stock Market Returns Are the Best Way to Grow Your Wealth
Simply put, you can’t afford not to be investing. The stock market return beats your savings account return every time, no matter how volatile it is. While there will undoubtedly be periods of loss (I lost money on Black Monday and still have yet to totally recover), the fact is your savings account is not going to take you anywhere. The stock market will.
Yes, there’s risk. Of course there is. There are two ways to get more comfortable with that risk though.
1. Educate Yourself
Learn about investing. Don’t assume it’s something only those people over on Wall Street get. Anyone can become a capable and even good investor with a little bit of knowledge. Start with Jack Bogle’s Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor and then move onto Rich Dad, Poor Dad by Robert Kiyosaki. These are classics and will teach you a lot about investing. Information is power!
If you want to vomit at the thought of reading a book on investing, have no fear! We live in the internet age and the internet is your friend. There are approximately a billion articles on investing 101 and how to get started. Find out the difference between a mutual fund and an index fund. Educate yourself about stocks and bonds. Look at patterns over the history of the market. Read strategies from investors on what they do with their money.
2. Just Start
I have found over and over in my life that the more I stress out about something, the harder it is to start. The first step is the hardest, right? Once you’ve taken that step, everything else seems soooo much easier.
Just open up something like an IRA account. It’ll get your feet wet and it doesn’t take much money to open an account at most brokerages. Be certain about what you’re doing, but go forth and DO it.
The truth of the matter is that keeping your money in a savings account or under the mattress is not the best place for it. You need to put your money to work for you, making more money. Getting interest and dividends in the stock market is the best way to do that. You’re shooting yourself in the foot by staying out of the game.
Have you hesitated to invest out of fear of the stock market? How did you get over that fear? What do you think about the volatility of the stock market?