Young investors: Most millennials don’t have stocks

CINCINNATI (Paula Toti) -- We've heard it said a lot, that millennials just aren't doing a good job of saving for the future. Now a new report from Bankrate.com says that when they do save, most are avoiding stocks.Many young adults under 30 may need some financial education, and parents can help. Young people have time on their side and are the ones who should take the most financial risk with stocks, yet a new report says roughly 75 percent of the people under 30 are not investing in stocks. While you need to be diversified with investments at all ages, most millennials need to get out of their comfort zone. Millennials will tell you they are the generation with the highest student loan debt in history and wages that on inflation adjusted basis are lower than previous generations. All of those are valid reasons that make investing tough. Still, Miranda Staudt puts money in stocks and feels, for many her age; it goes beyond lack of money. I think it's just really a lack of education and they're not aware of what's available to them, said Miranda. Experts agree. Financial planner David Nienaber of Foster and Motley says young people have heard horror stories. You had Bernie Madoff and the financial crisis of 08 and 09, said Nienaber. I don't think they see it as simple as investing in good companies that make a profit and participating in those profits. He is seeing parents step in to help adult children start investing. The math is just too powerful. Invest ,000 a year between ages 25 and 35 and then stop, and at seven percent growth you have over ,000,000 at age 65. On the other hand, if you start late, at say age 35, and invest ,000 for a full 30 years at the same rate, you get just over 00,000 at retirement. Miranda was fortunate with her retirement plan because early on she had a job that offered help. It started as a coop and moved to full time and started my 401k early on, said Miranda. But even if a job doesn't offer a 401K, if you have wages you can set up your own IRA or Roth IRA.Even with very limited funds you can find an online advisor.They really cater to folks with a small amount to invest and help create a discipline to continue to save, said Nienaber, Parents might also set children up with their own advisors and get them to make monthly payroll deposits into a retirement investment. I was lucky, said Miranda.Learning at a young age to pay herself first. David Nienaber says young people might consider target funds where the mix of investments are set to match age and years to retirement. A recent study showed people who just do that rather than make a lot of moves in and out trying to time the market do better anyway and it's a lot less work.Online advisors who will help you set up a retirement plan and even help you choose investments will typically charge a quarter to half percent annual fee. Follow Paula Toti on Twitter @paulatoti, and LIKE her on Facebook.Follow us on Twitter @Local12 and LIKE us on Facebook for updates!

Comments

1. it's really hard to change people's investment habits if they've been scarrred by traumatic events. These people in the news brush off financial crises like it's nothing.