rocket finance

20 Year Olds Reading the Wall Street Journal?

I get tired of “woulda, coulda, shoulda” posts on investment blogs, but now I am falling into the same trap and speaking from 20/20 hindsight. . . Anyway, even though we do not see eye to eye on politics, plonkee got me thinking about how every financial product under the sun is marketed to young people: checking accounts, savings accounts, credit cards, mortgages, home equity loans, cash advances and on down the list. Yet we see very little investment marketing geared toward young people. Now conventional wisdom says that “investment is not marketed to young people because they don’t have any money”. Which is a true statement to a point - although I believe that young people have more money than we give them credit for, they just have not learned how to hang on to it. 

Either way, young people don’t have access to large amounts of capital.  However, there is one component of the investing formula that young people possess in great quantities: TIME.

After doing some research into index mutual funds and with a little help from The Real Returns. I estimate that if I had invested $1000 a year in any basic low cost mutual fund from 1992 to 2002, my portfolio could easily be worth well over $38,000 today! That time period spans my college and single years and with just a little bit more discipline, I could have put that kind of money away - even $500 a year would make my life very different now. I even remember thinking as a 19 and 20 year old “Boy, I would really like to invest in something. . .” But I had no idea how to get started. It all seemed very complicated to me. I didn’t know anything about brokerages or stocks or bonds or mutual funds or loads or even what a share was and how it worked. However, I think that if someone with credibility had come to me and said, “I know you don’t have much money, but let me help you get started,” I would have jumped at the chance and begun to research the market because I had a personal stake in the world of finance.

I do not work in the banking industry, but I would jump at chance to market a product to help 18 to 28 year olds get started in investing. The campaign would have to inspire them to make little sacrifices. For instance, I would try to get young people to spend just a little less money on coffee, tatoos and texting and invest the money saved from such little luxuries. Imagine how our culture would change politically and economically if half a million 20 year olds suddenly had an interest in the business section of the newspaper?