The Millennial Money Mantra: Cash Is King

The Millennial Money Mantra: Cash Is King

The stock market may be on the upswing, but Millennials are finding it hard to believe the hype.

That's because coming of age during the Great Recession may have made this age group more fiscally conservative than their parents and grandparents.

According to a recent survey by, 18- to 29- year-olds are three times more likely than other age groups to keep long-term investments, like retirement savings, in cash instead of the stock market.


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About 39% of Millennials chose cash as the best way to invest money they wouldn't need for 10 years or more, compared to one-quarter of all respondents. Around 24% of Millennials said they'd prefer to invest in real estate, while just 13% would choose the stock market.

These results are hardly surprising. According to the UBS Investor Watch Report, released in January, Millennials ages 21 to 36 are the most financially risk-averse group since the Great Depression, often avoiding the stock market altogether.

Meanwhile, according to a report by The Brookings Institution, nearly half of Millennials "never feel comfortable investing in the stock market."

The problem is that, for a generation confronted with a huge retirement savings burden, missing out on the benefits of compound interest and long-term investment gains could become a problem down the line. When it comes to saving sufficiently for retirement, Millennials "won't get there without being willing to assume a little short-term price risk in their long-term money," Bankrate chief financial analyst Greg McBride told CNN.

So what makes this group so hesitant to invest?

As Millennials rely increasingly on advice from family and friends, cautionary tales from the 2008 financial crisis may have given them "a Depression Era mindset," said Emily Pachuta, Head of Investor Insights, UBS Wealth Management Americas. Over half of this conservative generation claimed that saving was the single best piece of financial advice they had received. 

Millennials are also faced with the highest student debt on record: the class of 2014 has an average of about $30,000 per student. A mountain of debt may be a significant deterrent to taking any financial risks after graduation.

RELATED: How Much Are You Sacrificing to Pay Down Your Student Loans?

Thinking about investing, but don't know where to start? See if your questions aren't answered (and your concerns assuaged) here.


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