Why Johnny Can’t Invest: Five Reasons Behind A Scary Trend
I read some really disturbing news in the vast reams of disturbing news out there. But this one has nothing to do with rigged elections and the blown economy.
In a survey of 1,000 Break Media users, only 29 percent of males aged 18-34 say they are saving money. This is in contrast to national saving average, which is up like 15 percent. And, during a recession savings rates naturally go up. But not the savings rate of young males, apparently.
What’s wrong with the investment habits of Johnny?
I think there are a few reasons for this financial illiteracy.
“F” for Financial Education
Financial education in high school is pretty much non-existent nationwide. Classes on investing, home ownership, credit use, and personal finance should be required.
Mixed Money Signals
The mixed signals on wealth generation is pervasive in our society. We applaud people who strike it rich and we curse them.
Expectations
Except for a few glitches, the economy has grown considerably and consistently for nearly a generation. Could it be that these young men have never considered that they will eventually have to manage their own money?
Poor Role Models (In More Ways Than One…)
When you look at the spend and spend more lifestyle of celebrities, it’s rare to find good financial role models. Stars have more gold in their mouths and more diamonds in their noses than they have in their investment accounts.
Encouragement
Are we actually encouraging young men to be responsible with their finances, or to become active financial managers? Encouragement for young men to be good at sports–and video games–seems to be stronger than encouragement for education and financial success.
If we want a bright economic future, every single member needs to contribute. Johnny not only has to be able to read, but has to learn how to invest and manage his money.
Related posts:
- Three Reasons You Should Have An Emergency Fund
- Favorite Book of the Day: Johnny Bunko
- 7 Reasons Why Saving Money Makes You Poor: Reason #3
- George Washington: A Trend Following Investor
- 7 Reasons Why Saving Money Makes You Poor: Reason #1
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is one of my favorite financial books of all time. It's an allegory about a guy who has a terrible job, and how he overcomes challenges to achieve his dreams.
I have a bad spending habit. If it wasn’t for my wife I would be broke all the time. You are correct about the teaching the kids money management. I wasn’t taught it when I was young and no I still don’t do it.
Hi John–
You’re not the only one. We seem never to be financially educated, but we do pick up money habits–from parents, friends, and society. Well, they say the most important financial decision you make is picking your spouse. It sounds like you did that right!
Every male in that age range that I know is:
1. Mired in college debt and (if employed) working for peanuts, and spending all of his money to pay off student loans and all the rest of the debt that comes with being poor and trying to work your way through college.
2. Too poor and uneducated to even consider going to college in the first place, and is barely treading water as drone for the service industry.
3. Risking his life on a daily basis in Iraq or Afghanistan to preserve the economic and strategic interests of the U.S. in the Middle East, while making a pittance when compared to what our little corporate mercs (blackwater, northbrook and other PMCs) make for doing the essentially the same job (only more off the record).
I’m sorry, there are a lot of working Johnnys out there who are just plain old broke – and not because they are irresponsible with their money – they simply don’t have it to save. Get it? You can’t invest when you don’t have money to invest.
~ Ah, but you weren’t talking about my Johnny were you? You were talking about Trust Fund Johnny. Those other Johnnys don’t really belong in your vision of the American Dream. Right? I wonder what’s going to happen when Johnny comes marching home this time?
Hi Laslounderhill–
Thanks for the comment.
I want to think we have some common ground here.
I don’t doubt that there are good, hardworking young men and women out there who are struggling. That’s every generation. But the study does indicate that young males are having more trouble with saving money than other genders and age groups.
It’s less about irresponsibility than it is financial education.
You’re comment speaks deeply to that point. The idea that you’ll become financially independent by working for someone, going to college, or becoming a drone for the service industry (or any industry) are all chapters from that failed economic lesson book. You can either be controlled by the system, or control it, by using your initiative, brains, insight, discipline, and technology.
For us non-Trust Fund Johnnys it won’t be easy. But it’s possible.