Millennials are starting to invest at a much younger age than their parents’ generation, undeterred by higher tuition costs, reports of shrinking job prospects and higher housing prices, according to the TD Investor Insights Index.
On average, generation Y investors reported making their first investments at age 20. In contrast, previous generations waited until closer to 30, with baby boomers holding off until 27.
The top reason generation Y investors report making their first investment was family encouragement (41%). Boomers, on the other hand, were more likely to report an increase in income as a trigger for their first investment (36%). Even with family encouragement to start investing, more than one-third (35%) of generation Y investors said knowing where to get trustworthy advice is a challenge.
Read: Late boomers, generation X less prepared for retirement
In the past 12 months, the average proportion of income invested by gen Ys was approximately one-fifth (18%). In an ideal world, they reported that they would invest closer to one-third (29%) of their income and hope to be investing a similar amount (30%) in 10 years’ time. Millennial investors were also more likely than boomers to say they would increase the proportion of their income invested if the stock markets improve (35% and 15%, respectively).
The TD Investor Insights Index also found that retirement planning and saving to buy a home were top of mind for generation Y, despite today’s competitive housing market. Even with balancing student debt loads and managing expenses, half of generation Y investors said saving for retirement was their top investing goal, followed by buying a home (44%), travel (43%) and achieving financial independence (42%).
While more than one-quarter (27%) of generation Y investors said a parent or family member taught them about savings and investing, almost one-fifth (18%) of generation Y investors said they learned about savings and investments on their own. Embracing the do-it-yourself attitude is synonymous with the millennial generation—nearly half (48%) of generation Y investors manage their portfolios directly online.
Originally from our sister publication, Advisor.ca.
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