The Investing Advice Every Millennial Needs to Hear

in Investing by

It’s hard to be a millennial these days.

Everywhere we turn, we see stories on how record levels of student loan debt are killing millennial’s chances at homeownership. Meanwhile, money woes for millennials mean many are putting off marriage, quite possibly for good. And according to government figures, the unemployment rate for millennials still hovers near 15 percent – a statistic The Atlantic used last year to claim that millennials “have it worse than any generation in the last 50 years.”

Yes, millennials have it rough. They’re living in their parent’s basements, struggling to keep the cabinets stocked with Ramen, and wondering which move to make next.

It’s all tragic and indisputable. Like it or not, being under thirty these days isn’t easy – at least in an economic sense.

The Millennial Advantage No One Wants to Talk About

But here’s the thing: Millennials have one huge advantage – one huge gift – that they almost refuse to recognize. This gift is something so valuable that it transcends every other item of value on Earth, and it’s something that is finite, at least on an individual level.

That’s right; millennials have time. Time to save. Time to pay off debt. Time to cultivate their passions, skillsets, and careers. Time to invest in the future. And yes, time to invest in a financial sense too. Because as we all know, the magic of compound interest is far easier to harness when you’re young.

So, Why Aren’t Millennials Investing?

Unfortunately, a recent survey from revealed that millennials aren’t taking advantage of the one thing working in their favor – their youth. According to the survey, which polled 1,001 adults to gauge millennial attitudes on investing, only 26 percent of individuals under the age of 30 owned stock in early 2015.

Survey participants listed several main reasons why they choose not to invest, none of which are surprising. More than half of those who don’t invest (53%) use a lack of financial resources as their excuse, while another 21 percent said they didn’t know enough about stocks to take the plunge. The rest cited a general distrust of stockbrokers and worry over paying too much in fees. Related: See how much you are paying in fees with our Fee Analyzer.

Those are all good reasons in theory, but disastrous when applied to the real world. It makes you wonder – what will happen to all the young people who fail to save and invest while they’re young?

“Young people who don’t invest in equities early are set to have a lot less money later on,” John Salter, associate professor of financial planning at Texas Tech University, told after analyzing their survey results.

“They won’t benefit from those extra years of letting their portfolio grow, eventually earning the ‘interest on interest’ that generates real wealth,” he said, adding that “it’s just the simple value of compounding.”

In other words, millennials who fail to invest won’t have enough money to retire. Instead, they’ll need to continue working indefinitely, subsist on government assistance and social security, or shack up with their own kids in old age.

Retirement: It’s the End Game

If you’re a millennial, you might find those ideas preposterous, or even hilarious. But don’t start laughing yet. Here are a few facts from the National Council on Aging that you might want to chew on:

According to the NCOA and various government agencies:
• 23 million Americans over 60 are already living in poverty
• 75 percent of those 65+ rely on social security alone
• One-third of senior households lives paycheck to paycheck
• In 2012, the average credit card debt among adults aged 65+ was $9,283
• 14% of adults aged 65+ face retirement with negative net worth

When you look at what actually happens to people who don’t save or invest enough to enjoy a comfortable retirement, it isn’t so funny. In fact, the idea of living in your son’s basement at 70 stops being hilarious the moment you realize that it’s not only possible, but actually likely.

And maybe it’s just me, but spending retirement in poverty sounds a whole lot worse than being 25 and having student loan debt and a job you hate. Because, no matter what, you still have time. You have time to stop and think – time to make a change. Time to tackle your student loan debt with fervor. Time to get a second or third job. Time to go back to school, finish your degree, write a book, or improve yourself in a multitude of ways.

Your future self doesn’t have that privilege. When you’re 75 and subsisting on frozen Hungry Mans, it’s the end game. You’re stuck with whatever future you, yourself designed. And if you happen to look around and think “this sucks” in old age, you’ll only have yourself to blame.

The Investing Advice Every Millennial Needs to Hear

And that’s why it’s more important than ever to start investing as soon as you can. You may think you can’t afford to, but the truth is, you can’t afford not to. Your future depends on what you do here and now, and your “future self” is begging – pleading – for you to take action not just now, but yesterday.

The internet is a treasure trove for those who want to learn investing basics. Meanwhile, Personal Capital offers free tools that can help you monitor your spending, net worth, and growing portfolio of investments. You may not have a lot to start with, but you have to start somewhere. Whether you choose to start by socking away $50 or $100 a month at first, investing in your company 401(k) up to the match, or opening a traditional or Roth IRA with a brokerage firm, it’s essential that you take that first step. Because, no matter what, no one can take it for you.

When you’re in your twenties, you think the world is something that happens to you. You wake up each day with the goal of doing the best you can with what you have; you react to your surroundings. You shrink at opportunity. You see maybe one or two years out, or perhaps five years or a decade, but you just can’t picture yourself as a little old lady, no matter how hard you try.

But the years will creep by faster the older you get, and soon you’ll look back and wonder where the time went. And if you think investing is hard now, just wait a while. The longer you sit idle, more impossible the idea of retirement will become.

So here it is, the investing advice every millennial needs to hear:

Don’t use student loans or anything you hear on the 24-hour news cycle as an excuse not to save or invest for your future. Sixty years from now, nothing will matter except for what you did with the resources you had.

You have more power and potential than you realize, but time goes by much faster than you think.

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Holly Johnson

Holly Johnson is a financial expert and award-winning writer whose obsession with frugality, budgeting, and travel plays a central role in her work. In addition to serving as Contributing Editor for The Simple Dollar, Holly writes for inspiring publications such as U.S. News and World Report Travel, Personal Capital, Lending Tree, and Frugal Travel Guy. Holly also owns two websites of her own - Club Thrifty and Travel Blue Book. You can follow her on Twitter or Pinterest @ClubThrifty.


  1. Freddy

    So let me get this straight… millenials can’t afford to save for retirement but they can’t afford not to…? Sweet elitist rhetoric. Any more advice?

    My household income is $70k a year (I’m not a millenial – age 32) and when our health insurance was raised again, we had to choose between paying for health insurance and student loans (which is a fallacy anyways, the government makes us pay for those things) or maintaining our paltry $100 contribution a month to our IRA. And people have the audacity to question why recent grads eating Ramen and working 3 jobs to survive cannot invest?

    All off this “millenials need to learn the power of investing” reeks of the brokerage industry realizing their customer base (and gravy train) is about to dry up in 20 years. Oh well… you created it.

    • Anonymous

      The author has somewhere in the ballpark of 100k in student loans.

      • Holly Johnson

        Me? I have zero dollars in student loans! Sorry, you have me confused with someone else.

    • Jason

      The brokerage industry and Wall Street have nothing to do with someone’s lack of desire or inability to save. Using them as scapegoats is like someone accusing McDonald’s for them being overweight. The concept of investing should be used not only as a means to support oneself in retirement (rather than expecting governments or companies to do it for them) but also because of the belief in the ingenuity of the human race and the companies that provide their services.

    • anon

      You chose to buy a house you obviously cant afford. You could have rented and saved more. You chose to by property while you were in debt. You are in this state because of your decisions, life is hard, but you have only yourself to blame for the situation you are in.

  2. Chris Reeves

    I’m 24 with a net worth near 50,000, all from invest in a Roth IRA and a taxable account. I urge all of my friends to save and invest now for the same reasons you stated above. Sadly, I’m in the extreme minority and I hope that my generation will take retirement seriously before time gets away from us.

    • Holly Johnson

      I agree with you, Chris! All I ever hear is excuses. Some of them are valid, some not.

  3. Patty

    Hi Holly,

    I absolutely loved your article. Millenials have to change the way we look at money. While many people feel they don’t have enough, if we change the way we think about money we are likely to have enough to invest. It may be a small amount, but small investments can grow to larger investments over time!!!!


    • Holly Johnson

      Yes! And the earlier you start, the better.

  4. Ashley

    “Lack of financial resources” isn’t an excuse not to invest in stock (or tuck some money away, somewhere). There are a lot of options between investing like you’re Warren Buffet and investing nothing at all. I started investing in stock last year, at 26, with a serious lack of financial resources (having drained my savings after being laid off from one job, and scraping by after settling for a temporary $10/hour part time job just to make ends meet). Even putting #25, $50 or $100 every month (or whatever you can afford to lose) into startups, penny stocks and reputable companies with shares under $10, is a good way to start. It won’t make you rich overnight, but ten years will pass whether or not you invest… and even if you wind up choosing dud stocks, being ten years older and finding a little bit of extra spending cash is a lot better than being ten years older and having absolutely nothing.

    • Holly Johnson

      I agree with you. When I started saving for my kid’s college, we did $25 per month in each account. It added up over time and now they each have thousands of dollars already at ages 4 and 6. It’s amazing what compound interest can do.

      • Juan Perez

        The market has had a great ride and all this talk of investing is great insofar as, people need to put money away for the future. However, when you speak of compounding interest and the stock market, be aware that the market can come crashing down, as it has enough times in the past. Investing and saving for the future should not be referred to as one in the same.

        • Steve

          The market may come crashing down at times, but it will always recover (given enough time). That’s the golden rule: The market ALWAYS goes up. Hence why the article is meant for millennial age folks. If you have the time and a little bit of thick skin, your portfolio will always recover.

  5. Millenial

    “Yes, millennials have it rough. They’re living in their parent’s basements, struggling to keep the cabinets stocked with Ramen, and wondering which move to make next.”


    • Holly Johnson

      Hey, I was being sincere! =)

  6. Derek

    Enjoyed the article Holly! Good information with a simple, and powerful, message. Sadly, the message seems to fall on deaf ears with my generation. Millennials seem to be more concerned with pointing their fingers at anything but the mirror when it comes to not being able to save, invest or earn a livable wage. Hopefully articles like this will encourage those in their 20s and 30s to just do some simple math. If you can force yourself to spend less in order to save more, it doesn’t matter if you make $50k or $150k per year, investing has a way of turning small amounts into large amounts over the course of 40 years. If more young people are able to prioritize and commit to a long term goal, maybe we can control our future instead of relying on handouts.

    • Holly Johnson

      I agree with you, Derek! Hopefully the tide will turn.

  7. Observant Thirtysomething

    What if we have another financial tsunami like the Great Recession (or worse) within the next 20 – 30 years? It seems like a likely outcome. So does a steep devaluation of the US dollar if (when?) it is abandoned as the world seeks a new reserve currency. Where will this generic advice get you then? Any words that optimistically suggest investing to millennials are likely to fall on deaf ears if these concerns are not adequately addressed.

    • Millennial Investing

      Observant Thirtysomething

      You are right…it is very likely there will be another financial tsunami like the Great Recession. The thing is that the market always makes its way back. ….why? because humans keep innovating, technology keeps improving, quality of life improves and companies keep bringing more value to the world. I mean the iphone for goodness sake. Wealth keeps being created despite what is going on in the world.

      Now it’s not a guarantee because nothing in life is a guarantee but history has shown that no matter what is happening in the world, the stock markets always make their way back. Great recession, WWII, Korean War, Cold War, Vietnam, inflation of the 70’s, Gulf War, Dotcom Bubble, Terrorism, 08 Recession, natural disasters and whatever else…and the stock market is still standing.

      So I say invest in equities continuously, be globally diversified, re balance cash and equity accounts when they get out the balance (hopefully a little less generic info). And unfortunately, you’re right that all this optimistic talk may fall on deaf ears but at the very least there is a chance that it can help at least one person better understand investing. Zero percent chance if you stand by and just watch. “You miss 100% of the shots you don’t take.” -The Great One

  8. DLH

    Appreciated the article; thank you.

    Wish you’d provided a little more at the end for those inspired to start; especially in the way of a plan. There are numerous ones out there, the best I’ve seen, experienced personally, and continue to use is the Dave Ramsey version in his Total Money Makeover. Too many don’t have a plan and that will tremendously help anyone based on my experiences, where we use it for thousands of millennials.


  9. Scott

    Comments like Observant’s are indicative of why so many millennials will wake up one day and realize they will never have enough to retire. The stock market will of course have MANY more crashes in your lifetime. But the long term trend of the market is relentlessly up. Don’t take my word for it, look at the graph yourself. Even if you got caught in the most recent “Great Recession” crash, you came out way ahead in just a few years if you just held on to your stocks (vs selling in a panick) and kept purchasing more while they were “on sale” AKA cheap!! Remember you have 40+ years of investing ahead of you, enough time to ride out any crash and still make the best long term return vs any other investing instrument. Any other investment vehicle at such a young age (except potentially rental properties) will get devoured alive by inflation. Fear is the greatest barrier to wealth. Great article Holly.

    • Holly Johnson


  10. Zachary Blake-Kim Ebling

    Very well-written article. As a 29-year-old expatriate residing in Beijing, China (the 9th most expensive city [go figure] for expats, according to Business Insider), I wish I would’ve read this article 5 years ago. Better late than never though!

    My fiancée and I began investing in a Roth IRA in 2014, and while the account still has a net cumulative value of less than $10k, we have seen significant gains and have had a surprising amount of fun in the process. I want to also recommend Jim Cramer’s “Mad Money” (a big Beijing BOOYAH to ya) podcast/TV show for great advice to young individual investors, especially for those who are looking to stock-pick and invest LT.

    Thanks again Holly for your excellent piece and good luck to all of the millennials, the future is on US!

  11. Dung Tran

    Wouldn’t it be more prudent advice to tell millennials to get rid of their student loans? Those debts are not bankruptable. once you’re debt free you’ll have more cashflow to invest your money.

  12. Rick

    I’m not sure where this article is trying to go, I don’t really expect the author to respond because she’s only responding to people argeeing with her.

    But there isn’t any actual concrete advice offered just a lot of generic, “invest before its to late” doom and gloom rhetoric. Sadly it comes off as just trying to fill a minimum word count for an article than genuine advice that can actually be followed.

    You say millennials live on a ramen budget but should still be investing somehow. You say millennials have time and should work 2-3 jobs at a time, but that disregard quality of life in the present for
    The chance at maybe you’ll get lucky in the future for improved quality of life. Which shows a misunderstanding of millenial culture, which is probably marketing investing to them isn’t going so well.

    Further you’re giving the awful advice to start investing now before paying off student loans, and giving no concrete numerical evidence to do so. As someone who is writing for a financial advice website how can you advise investing money in stocks and funds when their return on investment is a lower than interest that is adding up on student loans. It’s wonderful you don’t have student loans, but advocating that millennials should scrape together a $100 a month to invest in something that they would be lucky to earn 3-5% back on at then end of the year is completely irresponsible bad advice when student loan interest is closer to 8-10%

    • Holly Johnson

      I can’t always reply to everyone, but I’m more than happy to reply to you.

      I never said students should prioritize investing over repaying their student loans. Unfortunately, those with the highest student loan balances are often paying them back for 10-20 years. Suggesting that someone should completely pay their student loans off before investing is definitely irresponsible. Why can’t people do both?

      I know it can be done because I did it myself. When my husband and I got married, I had a very low-paying job (around $10 an hour) and my husband was working an internship for $20,000 per year. We paid student loans, credit card bills, and cars off by getting by on the bare essentials. We didn’t have cable TV, smart phones, or any luxuries. We didn’t even get a computer until my oldest daughter was born six years ago. We also invested and saved heavily. It can be certainly be done if you are willing to make the appropriate sacrifices. Unfortunately, many millennials today are not. You laid it out perfectly:

      “You say millennials have time and should work 2-3 jobs at a time, but that disregard quality of life in the present for the chance at maybe you’ll get lucky in the future for improved quality of life. Which shows a misunderstanding of millenial culture, which is probably marketing investing to them isn’t going so well.”

      Sometimes you have to sacrifice quality of life today for a better tomorrow. That’s the painful truth, and it’s one that many in the younger generation love to ignore. Everyone wants the same quality of life their parents have today, without realizing their parents worked thirty years to get there. Until that changes, nothing else will.

    • JB

      You should go back and check your numbers before such a rant. The long term return of equities has average >7% over the last 90 years. more than 90% of student loans are made by the government and those are routinely consolidated into sub-5% loans. the point being, that’s called “spread;” 7-5 = 2% GAIN.

      as someone who has over $150k in student loans for multiple graduate degrees, admittedly with a job that allows me to cover all my expenses living a “comfortable” (YMMV) lifestyle, i will take my employer’s 6% plus what I can comfortably add on top of that and happily pay my 3.75% loans back over time. at 3.75% within roughly 5 years that essentially equates to “free money” when factoring in inflation.

      while i too take some issue with the approach that the article takes, I think the ultimate point is not to miss the forest for the trees. our generation IS different from other gens and part of that is that we often don’t spend enough time to tactically assess and plan for the future- we are much more inclined to day dream about how much better things will/should be. while skinny on details, following the author’s lead will go a long way to getting to that “better” stage of life.

    • Anonymous


      Your points are interesting. However, as an investor, if I’m making 3-5%/year then I have to think that something with my investment strategy is inherently wrong (as opposed to being “unlucky”). An average millennial portfolio should be able to gain 6-8% in current/similar market conditions, while many are able to see double-digit annual returns just by picking best-of-breeds.

      Assuming an average return of 7%/year, you should still be able to make more in the market than you are paying in interest on your student loans (3-6% on average). So the idea that you should focus solely on loan repayment before investing might be a bit misleading, so long as your are a semi-competent investor.

      Best of luck!

  13. Jason

    I think the guts of this article are very valid — as a millennial, I know of the importance of saving. The big problem is the financial reasoning of why not to. Let me explain: my student loan interest compounds daily at about 6.5% across several different loans. I am paying what I can at this time, but I am focusing on the loans first. Should I let my loans last, they would incur about $10,000 in additional debt over the course of the loan.

    While I am planning on putting more emphasis on the student loans (of which I owe more than 30K still), I am still putting some away for retirement. What the article doesn’t really glorify is “giving what you can.” Even a little amount can go a long way for retirement.

  14. VJ


    I always hear people talking about investing but I do not understand if by having a retirement fund(through a financial company) is it or if I need to do some investing on my own? Which I have no idea how to do. Can you please go in more detail about that? Thank you.

  15. Pat

    To those of you who are asking where to begin, what to do, etc – I thought I would share my recent knowledge from all of my research.

    I am a 27 year old who still has a good amount of student loan debt from paying my way through college and my company does not offer a 401k or any pre-set retirement account for me – thus I had to figure it all out on my own by reading and talking to people.

    It’s not as hard to begin as you think
    #1 – track all your expenses in personalcapital, mint, anything
    #2 – make a budget and figure out where you need to cut spending (get rid of cable, get together with family or friends to get on a family phone plan (this saved me $60 per month), eat out less, have people over instead of going to the bar, etc. You will likely have to make adjustments, it sucks at first but you get used to it after a month or so. THIS IS AN IMPORTANT STEP – DONT PLAY KEEPING UP WITH THE JONESES AND KEEP BUYING NEW IPHONES, COMPUTERS, CLOTHES, IF ITS NOT IN YOUR BUDGET
    *you dont have to get too specific on these in the beginning, just know where money goes – mine at first only covered rent, utilities, student loans, taxes, and credit card (which covered everything from food to drinking to fun stuff)
    #4 – compare the interest of each of your accounts you owe money – car, student loans, credit cards, etc. Prioritize these based on level. Assume a 7% gain from investments. Thus if your credit card is 20% – PAY THAT FIRST (20%>7%), but if your student loans (which are 6%) and car loan (which is 3.5%) are lower than the 7%, put the extra money towards savings!
    #5 – If you dont have a 401k (as i dont), you want to open an IRA. google the difference between a roth vs traditional and decide what is right for you. personally, i prefer a traditional as I like my tax breaks now and not in the future, but its up to you. These are actually super easy to set up. Look at vanguard (my personal choice based on lowest fees i saw and heard from others), schwab, or fidelity are 3 of the biggest and most respected and are easy to set up and use. You can put away up to $5,500 per year in an IRA and get tax breaks on it
    #6 – set up an automatic transfer or do it manually for your savings amount into that account. if the ira you are looking at has a minimum (which some do) like $1k, you can open up a separate savings account that it goes in to *that you do not touch* and then transfer over once you have a specific amount.
    -if you have a 401k at work, just go talk to your HR person or benefits manager – this is their job to help you set up your 401k and figure out if you can get matching contributions from the company (which is FREE MONEY they give you to encourage you to save)
    -one other good trick, look at your health insurance or benefits (if you do have any) – if you have a high-deductible plan (HDHP) you can open an HSA (Health Savings Account). You can treat this as another form of a savings account and contribute up to $3,350 (or something like that) each year. You can then invest this the same way as an IRA or 401k
    #7 – put your money into an index fund. This is my personal choice, but EVERY single study I have read shows that these will outperform “playing the market” and picking stocks on your own. This is how you get the 6-8-10%+ annual returns. Take the time you would spend studying stocks and whatnot, and spend it on #8 and #9 below

    These are the basics above, however these next 2 are just as, if not more, important, but should be done after
    #8 – start reading up on taxes in your state. THE BEST SINGLE PIECE OF ADVICE I EVER GOT WAS “your taxes are the single largest expense in your entire life, more than your car and house combined, figure out how to minimize these through tax deductions and write-offs and you can save thousands of dollars
    *a few ones i learned about (but some vary by state):
    – you can write off student loan interest
    – you can write off a lot of job search and moving expenses if its for a job
    – you can write off part of your rent in some states
    #9 – if you are not at your target savings amount (which you likely wont be), figure out how to increase your income in the future. Start doing side projects online based on your experience (freelancing, consulting, etc for anything from writing, to social media, to whatever your job is). Figure out free (or good ROI) education things to get a better job – e.g. coding school, online certificates that get you a raise, etc. Look at moving jobs or to a new city where you can either lower expenses or get a raise that outweighs changes to living expenses.

    From all my research, i realized it is not as complicated as you might think. just set it up, put it in an index fund, and focus on minimizing your expenses and increasing your income in the future

  16. keith

    Millennials – Invest in yourself! Personal growth and well-being reap the greatest rewards.

    Personal Capital – I am happy user of your product, but this blog post concerns me. How can I trust a company whose customer engagement strategy includes clickbait and scare tactics? Can I trust you to be my personal financial advisor?

    Please realize, Millennials (and people everywhere) are struggling to pay their bills and debts. Financial instruments are often a poor allocation of funds or even an impossibility.

    Want to connect with millennials in a honest way? Show us in numbers how would you recommend managing a realistic budget.

    • Colin

      How can you expect them to create a budget for any & every person? That’s your responsibility, not theirs.

      I see nothing clickbait-ey or scare tactics in this post. It is simply outlining that a millenial’s greatest asset is time (specifically the time value of money). Even meager amounts saved early ($50-100/month) can have huge returns 30-40 years down the road. I’m sure the author is well aware of the burdens many millenials face when it comes to debt (particularly student loans) but savings can be achieved if YOU (not them) draw a budget for yourself, find ways to scale back (you may cry you have no money but have you pared back any? Scaling back your cell plan, cable plan, eating out, etc are all great ways) and invest those cost reductions into savings.

  17. Bryan Thompson

    “When you’re 75 and subsisting on frozen Hungry Mans, it’s the end game.” Best…Line…EVER! I hope this resonates with the millenial generation (which I’m a part of). You have to start somewhere. I remember Suze Orman’s Young, Fabulous, & Broke book, the rules she insists on following are golden!

  18. Millennial Investing

    I would have to agree that the biggest advantage Millennials have over older generations, that no one wants to talk about, is time. Compounding interest only works if there is time to let it work. Difficult concept for a lot of people to grasp. Investing in your retirement account is not a get rich over night scheme but a long term plan (decades for us Millennials).

    Investing may mean giving up a few indulgences along the way to save and invest but that just means you will be one step closer to financial independence. No one else responsible but ourselves. Equities are the greatest wealth creation tool known to mankind.

    Great article.

    • Holly Johnson

      You have the right idea! Now you just have to make sure you’re acting on it!


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