A recent Youth & Money in the USA poll suggests that 63% of young adults know the stock market as a great place to compound wealth. Unfortunately, Gen Zs and millennials, regardless of their knowledge, are not investing.
To add a little more spice, 61% of that figure does not have an active retirement plan.
Polling Millenials and Gen Zs
After identifying this trend among young adults, Generation Lab and CNBC collaborated to conduct the survey. Their goal was to identify the underlying factors leading to the absence of notable investments among most young adults.
In January, the survey received 1,013 responses from people ages 18 to 34, residents in the US.
Spend and Live, Save and Suffer?
The polled survey responses made it obvious that young adults are finding it difficult to save a sum from their income for investments. The report generated from the survey suggests that these folks are finding it difficult even to save, all thanks to higher expenses.
If a person is struggling to save, it is very unlikely that they would give any thought to investment.
How Long a Young Adult Can Survive Without an Income
The survey found that if the respondents were to suddenly lose their jobs, just 11% of them would be able to survive on their savings for a year. Surprisingly, about 48% cannot subsist on their savings for more than two months before getting stranded.
So, it is natural that investments are afterthoughts while survival and getting by are top on their priority list.
High Expenses Killing the Passion for Saving
The survey responses made it starkly visible that the recent high costs of living are affecting many young adults. Relative to last year, the average income of many of these people is a bit higher. Still, they are only scraping and counting pennies.
By implication, savings and investments become difficult for this group, which may influence their vote in the November elections.
Not Living Commensurately to Your Income
Cyrus Beschloss is the founder of Generation Lab. He had something to say about the financial difficulties of Gen Zs and millennials.
“We can’t overlook this, they’re cutting costs, they’re tipping less, they’re trying to spend less eating out … living with parents … they’re not acting like the economy is as good as it is,” he said.
Cost of Living Tops the List
Respondents were asked to poll the top issues that would influence where their vote goes during the coming elections. Top on the list of issues is the cost of living, which 53% of them feel particularly concerned about.
So, it should not come as a surprise that the top issue in the US is that people vote for a presidential candidate who they believe is capable of resolving their financial woes.
Expenses Increase Alongside Income
In comparison, jobs, the economy, and healthcare are next on the list of concerns, with 41% and 31%, respectively.
The Youth & Money in the USA survey also revealed that 32% of respondents earned a bit more than 12 months ago. Also, 10% of them earn much more than before, and 31% still earn the same amount.
Saving Against Bleak Odds
Unfortunately, the difficult conditions of living are affecting young adults’ ability to save and invest. In fact, Clifford Cornell, an associate financial advisor at Bone Fide Wealth, affirms that this trend is responsible for poor subscriptions to retirement saving plans.
Many people in this category know they ought to save money and invest, but they find it extremely difficult or downright impossible.
Inability to Afford Housing, Another Symptom
Only 13% of the survey respondents claim to have a place of their own. However, about 67% of them board up with someone, either family or a roomie.
Susan Watcher, a professor of real estate and finance at the University of Pennsylvania, blames the outrageous cost of housing. She also notes that this era is similar to the end of the Great Depression in 1940.