Today’s morose Millennials, criticised for potentially killing the NFL and the napkin industry, are tomorrow’s financiers. Worse than killing the NFL and napkin industry, Millennials broadly feel indifferent towards finance. This sets a poor precedent for the future. However, there is light in the darkness as FinTech offers the opportunity for today’s youth, across the world, to get properly involved in finance.
Younger Attitudes towards Finance
Younger people, broadly speaking, are financially apathetic. One study suggests that only 38% of US teenagers are saving money, while nearly 50% of Millennials do not invest because the risk is too great. This should not be surprising. Few schools teach financial education, and many youths are still disillusioned after the FX, LIBOR and 2007-08 financial disasters.
Despair not: there is hope! Younger people have some interest in finance. In fact, Bloomberg suggests that 84% of Millennials are interested in sustainable investing (promoting responsible capitalism). Yet, one feels that respondents answered affirmatively because the question contained the “sustainable” buzzword, not because they were confident in how to manage their money and invest.
Audrey Choi, CEO of Morgan Stanley’s Institute for Sustainable Investing, hints towards this when she warns Millennial investors that they “have to apply the same critical eye to sustainable investing as you would to any deployment of capital”. Research by the National Endowment for Financial Education, suggests that only 8% of Millennials polled had a high level of financial knowledge, answering all questions correctly.
Worldwide, 2.5bn are unbanked. In his ‘My Heat Leaps Up’, William Wordsworth wrote that “The Child is the Father of Man”, and indeed social procedures “play a major role in developing children into capable producers, consumers, and agents of financial socialisation in adulthood”. If parents do not demonstrate best financial practices, the chances are that their children will not develop the necessary skills to manage money later in life.
Read more: Will FinTech Spur More Millennials to Invest