Opinion

Confessions of a millennial who hasn't invested a dime in stocks

When it comes to personal finance, there are some serious psychological barriers to becoming an investor

My colleague John Aziz wrote an interesting piece last week lamenting the fact that millennials aren't investing in stocks. This is not because they are less wealthy than previous generations, which is what I would have assumed. Though millennials aren't nearly as rich as their parents, even those who do have wealth tend to sit on their money:

[T]he data shows that even millennials who do have the money to invest are avoiding stocks. A UBS survey released earlier this year found affluent millennials hold 52 percent of their money in cash and 28 percent in stocks, compared with 23 percent and 46 percent for older people. So even affluent young people today are putting their money into bank accounts and securities that pay close to zero interest. [The Week]

I can't speak for those who are actually wealthy, but I do have slightly more than no money for the first time in my life. Indeed, since the bottom half or so of the income ladder has basically no wealth whatsoever, I'm probably well above the median. And just like Aziz says, I haven't even bothered to open a savings account, let alone buy stocks.

Much of that can surely be chalked up to laziness and incompetence on my part. But I think it also has to do with how Wall Street malfeasance, vast inequality, and the complexity of the financial system combine to create an enormous psychological barrier when it comes to investing, keeping all but the rich out of owning stocks and other assets.

I've read and written a great deal about economics and finance, but I can tell you that the actual mechanisms of asset purchasing are intimidating as hell. Just looking at a 401(k) booklet feels like the hotly acidic fingers of Satan are clutching at my trachea. It's almost as if I'd rather die in poverty than figure out which investment option would shaft me the least, between Great-West Lifetime 2045 Fund II T1, Columbia Small Cap Value Fund I Class A, Nuveen Equity Index R3, or Oppenheimer Rising Dividends N.

And it's not just the complexity. The whole ordeal just feels like a giant grift that taints your soul when you just think about it. I hear "we'll help you design the investment portfolio that fits your risk profile," and I translate "bankster scum are coming for your wallet."

That may sound a tad paranoid, but it's true! Mutual funds are, in fact, a giant scam. Barely a week goes by without some story about Wall Street stealing people's houses, or looting pension funds, or money-laundering for drug traffickers, and on and on.

And the stock market is looking a wee bit frothy these days, at least from this non-stock-owning millennial's perspective.

I know, intellectually speaking, that I should find a boring old index fund and sock my money away there. It probably wouldn't even be that hard! But emotionally, it feels like soaking it in kerosene and storing it at a fireworks show. Very easy to just put it off and do it some other time — maybe after the next time the market crashes.

In any case, these are trifling amounts of money at stake in my case. But it's understandable that young folks would be reluctant to put their hard-earned money into what has proved itself to be an incredibly corrupt system.

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