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Gen Y: Investing Is Fun, Not Scary

October 13, 2009 RSS Feed Print

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Online brokerage company Scottrade is out with some surprising findings about 20-something investors: It turns out they consider investing an enjoyable activity. Unlike older generations, they're more likely to manage their money on their own and to feel confident that they will recover their losses from the recession. In fact, one in three of those surveyed said they invest because it's fun, an increase from about one in four last year.

"Older generations see investing as more of an obligation or necessity, but Gen Y truly finds it fun," says Scottrade chief marketing officer Chris Moloney.

So, why am I surprised by that? Other experts and surveys have suggested that the financial crisis has left Generation Y permanently scarred—untrusting of banks and financial institutions, and less likely to invest in the stock market as a result. But this survey suggests 20-somethings aren't all retreating to their apartments to stuff bills in dark places. At least a significant portion of them are jumping into the stock market, which, given historical patterns about returns following market dips, is probably a good idea. Six in ten 18-to-26-year-olds said they planned to invest additional money in the stock market in the next year, compared to just 43 percent of those between the ages of 27 and 42.

The survey also suggests that the recession has served to educate 20-somethings about money. One in three said they've learned more about how the economy works and a similar percentage said they've become more familiar with their own personal finance situation. Those are higher percentages than any other generation.

So perhaps Gen Y is more resilient than other experts have suggested. Instead of interpreting the financial crisis as a warning to stay away from the capital markets, they seem to be jumping in with both feet—and that's probably the most lucrative move.

If you're a member of Gen Y, how has the financial crisis influenced your own investing habits? Are you more or less likely to put money into the stock market?

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I'm currently a 25 year old and I've been using a number of different investing tools. I utilize diversification as much as possible and approach most investments as long-term conservatively. Between the amounts I put into my 401k, Stocks and Roth IRA, I should be able to achieve a proper retirement. If not, then the investment systems (along with the country) are in the crapper. That being said, I'm am weary of putting all of my faith into the stock market or banks. I will still use the "money-under-the-mattress" technique for some of my assets, stressed by my grandparents. :)
I would say that my interest in investing came from my grandfather who went through tough times in the Great Depression. I guess he felt a need to show me early on how important it is to keep cash stashed away and to be weary certain banks and investors. On the other hand, certain moves and scenarios that my parents went through taught me more about what can happen when you DO put money into the market.
I am really hoping that if a large amount of people of my generation are investing, it can help stabilize and help bring back economic stability. So, I think that Generation Y not only hopes to ensure their own retirements, but to play their part to help stabilize the U.S. economy.
I think Generation Y truly has deep hope and believes that the United States will regain a solid economic grip. This grip will then lead to another era of prosperity. I believe that it is this hope and optimistic outlook we have for this country that is fueling our desire to invest.

Landon of TX 5:17AM March 23, 2010

Hey Kimberly,
I'm guessing your one of the ones you just wrote about. Let me sugggest you go to the next level and ask why. Consider that 30% of a young persons stake is a lot different than 30% of the stake of a 60 year old who's also keeping up with the debts of their 85 year old parents.
Being young and basically unencumbered by the obligations that mount over 50-60 years is easy.
To be honest, you had an opportunity to do an extraordinary piece and instead, filled a column-hole. I bet you can do better and I wish you would.

Grant Ellis of TX 10:07PM October 15, 2009

I can't AFFORD to invest. After being unemployed, being offered a job, only to have the hours cut, my credit card bill is ginormous along with my student loan bills. I'll be lucky to actually save money in the next year....investing is YEARS away.

veronica of NH 12:27PM October 14, 2009