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Jan 31

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Millennials Holding on to Cash

00009073Who are Millennials?  They are known as Generation Y, who are between the ages of 21 and 36.  In a recent survey conducted by UBS,  Millennials are described as,

Lazy. Entitled. Narcissistic. Spendthrifts. Digitally obsessed. Google the term ‘Millennial’ (ages 21-36), and these are some of the words you will find to describe this generation. But our research of over 1,000 Millennials shatters those stereotypes.  We see investors who are extremely conservative, savers not investors, and not nearly as self-directed as one would expect. And they worry about their parents’ financial health and futures as much as they worry about their own.”

The UBS survey considered 4,165 responses with 1,069 from Millennials.  The survey had the following interesting observations:

  • Millennials hold 52% of their portfolios in cash, as opposed to 23% for non-Millennials
  • Millennials described themselves as a being almost as conservative as investors who were 68+
  • Only 28% of Millennials believe that long-term investing is the key to help them reach their financial goals
  • Millennials rely more on spouses, family and friends for financial advice, instead of financials advisers
  • Contrary to the way Millennials are described, a large number are highly worried about their parents and their financial situation

Since Social Security is uncertain, pensions are virtually nonexistent, and people are living longer, Millennials need to make more prudent investments that will generate a higher return so they can meet their financial and retirement goals. Rather than simply squirreling away cash, Millennials should explore investment options that are likely to meet their long term goals.  A Risk Tolerance Worksheet and an Investment Allocation Calculator is available here.

About the author

Anand Khemlani

I am a founding member of Fulcrum Inquiry, an accounting and economic consulting firm that performs damage analysis for commercial litigation, forensic accountings, financial investigations, and business valuations. I am a Certified Public Accountant (CPA), Accredited in Business Valuation (ABV), a Certified Fraud Examiner (CFE) and am a licensed Real Estate Broker. I regularly serve as an expert witness involving results of my forensic accounting assignments and damage analyses. My resume is available on Fulcrum's website

Permanent link to this article: http://betweenthenumbers.net/2014/01/millennials-holding-on-to-cash/

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