PNC Investments released findings from their 2018 Millennials & Investing Survey
Among respondents, female millennials report having saved an average of $66,700 for retirement compared to the $101,500 male millennials have saved
19 percent of female millennials and 36 percent of male millennials say they have a solid understanding of how to successfully invest their money
Male millennials place a higher premium on alternative investments (i.e., cryptocurrencies) to help them retire successfully
You can see the full infographic and report by clicking here or copy and paste
This is a very interesting article that shows that even though we are in 2018 there are gender differences when it comes to financial knowledge and investing habits. Women, including millennial women, are not as much risk takers when it comes to investing so they will save or invest more conservatively. However, with time on our side, this is the time to look for investment opportunities that are geared towards growth as we are able to absorb market downturns by holding on for the longer term. A market dip will not affect us as much as a baby boomer retiring in the next couple years.
It is important that as a millennial man or woman, we look for the growth opportunities rather than being too conservative as we have the compounding effect on our side.
For example if you were to invest $10,000 today and not put in another dollar and wait 20 years here is what you would have:
Very Conservative/ GIC type of fund 1.5% = $13,469
Conservative fund mutual fund 3% = $18.061
Stock market balanced growth fund at 8% = $46,610
Growth fund at 10% = $67,275
As you can see being too conservative overtime will have a detrimental effect on your retirement plan.
Also, a very important thing to note is that fund fees and management fees can negatively impact your progress over time in the same way. In Canada, we pay ridiculously high fees.
Mentor Tip: Always ask how much the fund fee is as you may realize that you are losing most if not all of your money to the financial advisor you are paying that is pocketing this in commissions. And then factoring that each year inflation absorbs 2-3%of our return, going to conservative results in your dollars shrinking. Over 20 years, a 2.5% fee will cost you $16,386! Reducing it by 1.5% to 1% or less by buying an ETF (exchange-traded fund) or the index, for example, can save you $4,184 in 20 years. And the more money you start with the more money you can lose to these fees.
It’s unfortunate that many don’t realize this until they are ready to retire. So as we are still young and have time on our side, let’s invest wisely now so that we can reap the rewards later on.
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