Reasons why millennials aren't investing

According to, only one-third of millennials are investing in the stock market. Fear, mistrust and the lack of funds make it hard for us to invest. But then again, how can we invest when we are trying to balance so many other things in our lives. Some of us are just starting out in our careers. Most of us have so much student loan debt that we can’t even afford to live on our own. Others are getting married, starting families and buying homes. The truth is that millennials aren’t investing because we have a lot going on. Despite all of this, I urge you to start if you haven’t already.

Reasons Why Millennials Aren’t Investing

1 – It’s too complicated

If you’re staying away from investing because it’s too complicated, I feel your pain. Investing isn’t straightforward and most of us don’t learn about it in school. Not only is there a lot to learn, but there are thousands of options to choose from including stocks, mutual funds, tangible assets and precious metals. Having so many options is overwhelming. I get it.

Ways To Simplify

You can make investing as complicated or as simple as you want. You can become a DIY investor and learn how to buy and sell on your own. Or you can hire an advisor or broker for advice. Either way, I’ve found that gaining real-world experience is the best teacher.

It may also help to brush up on some investing terms and concepts.

Book Recommendations: Broke Millennial Takes on Investing by Erin Lowry

2 – It’s too risky

With good reason, The Great Recession has us spooked. A few years ago, we watched our friends and family lose their jobs, investments, and homes. Maybe the Great Recession affected your life like it did mines. During The Great Recession, my family lost our home. I also had a hard time finding a job after college. Things were rough which is probably why I’m a conservative investor.

Why Start Investing

Banks are offering measly interest rates. At a rate of <1%, it’s unlikely that you’ll ever see a decent return. Although saving instruments like CDs and saving accounts seem like “safe” bets, they will cost you more in the long run. Why? They aren’t keeping up with inflation.

Historically inflation increases 3% per year. If you’re earning less than 3%, you are at a significant loss. Compounded annually, your hard-earned money is losing value.

Today’s dollar will be worth less tomorrow.

Is Investing Worth the Risk

Investing carries some risk but to counter that, gain control. Empower yourself by learning how to invest so that you can make informed financial decisions. Education reduces risk. Also, pick risk profiles that work best for you – low, moderate or high-risk investments.

It’s also important to set realistic expectations. Millennials are optimistic and so we expect high returns. This can hurt us in the long-run. Sometimes we have to stick around and wait for the storm to clear.

Beginners can start out by investing in index funds. They help you diversify and offer solid returns.

Read More: Understanding Market Trends: Bear and Bull Market

3 – Can’t afford it

Lack of funds is the main reason millennials aren’t investing. According to, 48% of responders cited not having enough money as the main reason for staying out of the market. Sometimes even if we want to invest, we can’t because we can’t afford to. Underemployment, unemployment and student loans make it hard for us to save let alone invest.

One way to make more money is to pursue a side hustle or create passive income streams.

Saving vs. Investing

Saving money and investing are two different but important financial concepts. When you save, you’re putting cash aside. These are extremely liquid assets that you can use at any time. This includes checking accounts, saving accounts and money markets.

On the other hand, investing is when you buy an asset with the hopes that it will increase in value. Essentially, investing makes you wealthier. This includes stocks, bonds, and real estate.


Millennials aren’t investing because we believe that we need a lot of money to start. While most people think that you need at least $1,000 to start investing, this isn’t true. You can start investing with $100 but many apps allow you to start investing with as little as $5. Investing has never been more accessible.

Acorns is one of my favorite apps for investing spare change.

When to Save or Invest

Early on, focus on saving because saving helps you build a sturdy financial base. Over time when you have enough savings to cover your expenses (and some), consider investing.

Examples of Savings:

  • Emergency fund
  • Buy a new car
  • Down-payment on a house
  • Saving for a wedding in the next three years

Gear your savings towards short-term goals. Set aside investments for medium or long-term goals of 5 years of more.

When you invest for the long-term, you avoid day-to-day fluctuations in the stock market. Overall, the stock market does better over longer periods of time.

Investing is a marathon, not a sprint!

4 – We’ll be working forever so why prioritize now?

Millennials aren’t investing because it seems like we have a lot of time ahead of us. Although true, invest now so that your investments have time to grow. Reinvest your dividends and watch your net worth soar over time.

Share your thoughts on why millennials aren’t investing!

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