Too many people are not investing. It’s especially true for millennials.
The inertia of inactivity keeps us from investing. People gave sworn off the stick market since the 2008 recession. Millennials are scared to invest.
But, that’s just an excuse. You shouldn’t be scared. We all know that we should invest for retirement, pay off our debts, and save for our financial goals. Our inaction was an issue before the stock market and housing markets tanked it 2008.
Over 90% of millennials say that they distrust the stock market and that their lack of investing knowledge make them less confident about investing according to a Capital One Investing survey.
State Street Bank also found that millennials are also holding a significant amount of their investment portfolios, over 40%, in cash. This is an alarming trend considering that we have seen historically low interest rates on savings accounts and money markets for over a decade. Young Americans are seeing their purchasing power erode by holding cash that they aren’t putting to work in their favor.
But, that’s not half of the story. When it comes down to it, we’re lazy. Not investing for our future is the path of least resistance. It’s easier to do nothing than to venture out from shore. We’re using the market correction and its turbulence simply as a scapegoat to ease our minds and sugarcoat our inactivity.
But, how do we get over that initial inertia of not investing in the stock market? It’s not easy. But, how do you get started? Here are a few ways that can help you get off the sideline and start investing again – or investing in the stock market for the first time.
Don’t Fight An Automatic Enrollment
Many employers now offer automatic enrollment for their new employees in their 401k retirement plan. You should take advantage of that benefit. Invest in your company’s 401k.
More and more employers are using an “opt out” 401k automatic enrollment. Meaning that employees must opt out of the program instead of signing up when investing in the stock market or other investments.
From your very first day of employment, your company invests a small percentage of your salary in an ultra-safe investment option such as money market funds or government treasuries.
But, it is on you, the employee, to change your investment choices from the automatic enrollment selection. A money market fund will not do much for you. In fact, it won’t even keep up with inflation.
You have to change what type of investment that you want. So, this is a great option. You’re half way there – your company already got you investing in the stock market. But, now you have to choose a better investment – maybe an index fund that mirrors the S&P 500 index.
People email me and ask all the time where they should invest their short-term cash. Because of the stock market’s shaky returns lately or even those who are saving for a goal like a 