While developing a successful strategy for long term investment planning is an endeavor that takes time and effort, new research indicates that millennials have a lot to learn when it comes to investing their hard-earned money properly.
In a recent survey conducted by the student loan consolidation company LendEdu, 1,000 individuals were asked: “If you were given $10,000 tax-free and had the ability to invest all of it in one of the following options, which would you choose?”
While the survey included people of all ages, participants were grouped into three age cohorts: millennials (18-34); Generation Xers (35-54); and baby boomers (55+).
According to the responses, the number one choice of all respondents at 27 percent was: “Pay down debt (student loan debt, credit card debt, etc.).” While it is encouraging to see individuals the most excited about getting out of debt, it is worthwhile to note that when stratified by age cohort, millennials were the least likely of all three age groups to choose that option (22 percent), behind both Generation X-ers (25 percent) and baby boomers (33 percent.)
Furthermore, when asked about the type of debt they would choose to pay down, millennials were more likely to choose credit card debt (37 percent) over student loan debt (29 percent.) While it is possible that some of the survey participants did not carry any debt, these numbers would seem to indicate that a significant number of Americans only begin to care about debt as they get older.
Perhaps more concerning were some of the investment choices that seemed to be most popular among millennials. While 15 percent of those aged 18-to-24 said they would use the money to buy real estate, nearly 10 percent of individuals from that same age group said they would invest in cryptocurrencies such as bitcoin. While the early days of the cryptocurrency market caused a number of individuals to get rich over small investments, concerns about a lack of oversight and regulation in the system has caused the cryptocurrency market to become dangerously volatile, causing large numbers of people to lose vast sums of money, and in some cases, even their life savings.
While a number of American millennials do appear to be making wise financial decisions by choosing trade school over college and leaving their parents basement to start working towards owning their own home, these numbers indicate that the millennial generation still has a long way to go in developing the skills essential to financial prosperity.
