Millennials on Investing, Debt, and Banking [Chart]

Millennials on Investing, Debt, and Banking [Chart]

Surveys reveal Millennials to have conflicting views on financial matters.

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Millennials are the most confident generation regarding their financial future. In fact, recent survey results show that 65% of Millennials feel confident about their future finances, compared to 52% of Gen X, 50% of Baby Boomers, and 59% of the Silent Generation. This is not a surprising find, as one of the defining traits of the Millennial group is high self-confidence.

The problem is that this confidence seems to conflict with other survey findings.

In reality, it looks like many Millennials could still have a steep learning curve ahead of them in the financial realm.

Debt

The first red flag is with debt. Only 48% of Millennials know their credit score, and just 37% are confident in their ability to manage their credit.

Millennial student debt is at sky-high levels, and many are struggling to pay. Even the Federal Reserve noted that the delinquency rate for student loans in repayment is a staggering 27% in the United States.

Investing

Another potential concern arises with the generation’s attitudes towards investing and building wealth. Despite their confidence in their financial future, 46% of Millennials think investing is “risky”, 60% distrust financial markets, and a whopping 70% hold their savings and investments in cash.

While there are some reasoning for these numbers individually, as a whole they seem to paint a broader picture that Millennials are afraid of entering the market in any capacity. As a result, it would appear that they hold onto their money in cash while interest rates are at their lowest in human history.

Historically, the middle class has built much of their wealth through investing. While it is true that Millennials witnessed the failures of Wall Street first-hand during the Financial Crisis, it doesn’t change the fact that investing will likely play a key role in building their financial futures. Millennials do not have to only own stocks either, as there are plenty of market instruments, hedging strategies, and stores of value out there that can protect against market downside at any risk tolerance.

Further, 87% of Millennials feel empowered to make investing decisions on their own. While we would agree that investing for yourself can be one of the most rewarding ways to build a strong financial future, not everyone can be an expert in personal finance. That’s why people hire brokers or investment advisors.

When it comes to opinions on these types of professionals, Millennials have contradicting feelings. For example: 58% of Millennials are interested in robo-advisors, yet at the same time 64% say that a personal relationship with an advisor is important.

Cash and Banking

Millennials also have unorthodox views on cash and banking. As a generation of people that grew up in the digital age, 40% of Millennials would stop using cash altogether if cards could be used for all transactions.

Further, 49% would consider using financial services from tech companies like Google or Facebook. In contrast, only 16% of people in older generations would consider a similar move.

This disparity is part of the reason why bank executives today are unaware of the very technology startups gaining traction in the market, and that seek to unseat them.