Many Older Millennials Don’t Plan To Invest in 2024 — 11 Reasons This Is a Major Money Mistake
Older millennials between 35 and 44 have been through some unique financial times. There is still plenty of uncertainty for millennials too, as the economy deals with stubborn inflation and aggressive rate hikes introduced by the Fed to restore the balance of supply and demand.
See: 11 Uncommon Investments That Can Actually Make You A Lot of Money
Learn: 3 Things You Must Do When Your Savings Reach $50,000
That said, it’s clear that many millennials have been confused about how to invest their money, and a surprising survey revealed that a significant portion of older millennials don’t plan to invest at all next year. Let’s examine why this is a huge financial mistake.
Nearly 25% of Older Millennials Don’t Plan To Invest in 2024
According to a recent survey of over 1,000 Americans conducted by GOBankingRates, 23.68% of older millennials aged 35-45 admitted that they weren’t planning on investing in 2024.
Investments Older Millennials Are Considering
Even though almost a quarter of older millennials don’t plan on investing in 2024, here’s a breakdown of the investments that are being looked at by others:
Stocks (38.42%).
Mutual funds and ETFs (17.37%).
Crypto (21.05%).
Collectibles (9.47%).
Retirement accounts (35.26%).
High-yield savings accounts (25.79%).
Certificates of deposit (15.79%)
Bonds (8.95).
Real estate (16.84%).
Since the participants could select multiple investment options, some choices were picked a few times. Those who plan on investing are looking into the stock market and retirement accounts despite the concerns of a possible recession.
Warren Buffett’s Advice to Investors: ‘Incredible Period’ for America’s Economy is Ending
Possible Reasons for Not Investing in 2024
If you’re wondering why many older millennials don’t plan on investing next year, here are a few possible reasons:
Nervous about the stock market. If you look at any chart, you’ll see how volatile the stock market has been in the last few years.
Fears of a possible recession. As the rate hikes haven’t completely stopped, there’s still the chance that the economy could tip into a recession.
Focused on leaving funds in cash just in case. Many younger people likely want to leave their savings alone as they figure out their next moves.
Paying down debt. If you have high-interest debt, focusing on paying this down right now makes sense.
Why Is It a Major Money Mistake for Millennials To Avoid Investing?
Let’s break down why older millennials should be investing in 2024.
You Have Time on Your Side
“It’s a poor idea for millennials to not invest money right now because the greatest asset anyone has when it comes to investing is time,” stated Jessica Morgan, founder of Canadian Budget. “The more time millennials have their money invested in the market, the better chance their investments will grow — and have time to rebound from any market downturns that occur along the way.”
You’re Closer to Retirement Than You May Realize
“Particularly for elder millennials born in the early 80s, the runway to retirement is getting shorter and shorter,” shared Morgan. “If we stop investing in 2024 (or haven’t started at all), reaching a retirement target of 65 becomes more difficult. We are only able to retire if we have the money saved up to sustain our post-work life.”
You have to start making decisions today based on what kind of lifestyle you want to live in retirement. While it may seem far away, the time will fly, and you don’t want to be stuck working longer than you want to.
Morgan further elaborated, “Without consistent and sustained long-term investing, millennials will find it challenging to build a retirement nest egg that will be able to sustain decades more of their retirement lifestyle.”
Life Expectancy Has Increased
One point rarely discussed in financial planning is that people live longer. You have to plan for this and think of how you will sustain yourself in the future.
“Life expectancy has increased, and you may need to support yourself for another 20-30 years on the savings you have built up,” Morgan expressed. “If you don’t have enough saved and invested, the result of not investing early and often will be a longer working life and a shorter and more financially challenging retirement. Take advantage of your time now, and start investing for your future as early as possible.”
You’re Risking Your Financial Future
“By not investing, millennials are not just missing out on growing their wealth; they’re risking their future financial stability,” said Dominic James Murray, CEO and independent financial advisor at Cameron James. “It’s essential to harness the power of investing to build a secure and prosperous future.”
You’ll Miss Out on Compound Interest Benefits
“One of the biggest mistakes millennials can make is not leveraging the power of compound interest,” Murray said. “By investing, even small amounts can grow exponentially over time. I’ve seen firsthand how clients who start investing early, even with modest amounts, can build significant wealth over the decades. It’s a fundamental principle of wealth accumulation.”
Inflation Erosion
With most of us still feeling the impact of inflation in our daily lives, it’s critical that we find investments that will help us hedge against this. You don’t want your money to lose value.
“Money sitting idle in a savings account is likely losing value due to inflation,” said Murray. “I always advise my clients that investing is essential to outpace inflation and maintain the purchasing power of their savings.”
Lack of Diversification
“I often see millennials relying heavily on a single asset class, like real estate or just keeping money in savings,” stated Murray. “This approach can be risky. A diversified investment portfolio, which includes a mix of stocks, bonds, and other assets, is key to managing risk and achieving more consistent returns over time.”
You Can’t Predict Economic and Market Changes
“The economic landscape is always changing, and by not investing, millennials might miss out on significant growth opportunities,” said Murray. “For instance, those who invested post-2008 recession have seen substantial portfolio growth. It’s about being in the market to capitalize on these growth periods.”
While we can’t control the market, we can control what we do with our money. This is why we shouldn’t let short-term market volatility deter us from investing.
Long-Term Financial Harm
“Avoiding investments now can have a profound impact on retirement planning and wealth accumulation,” according to Murray. “Investing isn’t just about immediate gains; it’s about setting the foundation for a financially secure future. It’s about building a cushion that supports not just retirement but other long-term aspirations as well.”
You Can’t Time the Market
“It’s very alluring to think we can time the market, but the data shows time and time again that nobody can successfully and consistently time the market,” said Carla Adams, CFP, founder and financial advisor at Ametrine Wealth. “Trying to can actually be a huge killer of wealth.”
If you’re avoiding investing because you want to try to see what happens with the market, it’s essential to remember that timing the market simply doesn’t work. There are far too many unknown variables involved. Some of the world’s most sophisticated investors haven’t been able to time the market, so there’s no sense in older millennials attempting this.
This Could Be the Best Time To Invest
“For millennials who have money sitting on the sidelines waiting for a market dip to invest, the market may never again be as low as it is now, seriously,” shared Adams. “There may be a huge dip in the future. But the point is we don’t know. What we do know is that over long periods of time, the market goes up, and it goes up by a lot, roughly 10% a year on average.”
For all we know, this could be the best time to invest your money, and you would be missing out by choosing not to do so.
Closing Thoughts
“In summary, not investing can be a critical misstep for millennials,” Murray said. “It’s about more than just growing wealth; it’s about securing financial stability and independence for the future. As I often tell my clients, the best time to start investing was yesterday, and the next best time is today.”
“For anyone who has cash sitting on the sidelines, start investing a little each month, dollar-cost average into the market,” Adams shared. “Short-term market volatility is just noise. If you can zoom out and see the bigger, long-term trend, the picture is clear: invest today and keep investing.”
More From GOBankingRates
This article originally appeared on GOBankingRates.com: Many Older Millennials Don’t Plan To Invest in 2024 — 11 Reasons This Is a Major Money Mistake
