Is There An Investing Age Gap?

I am 28 years old and I have limited, but learning comprehension of how investing works. I wasn’t taught my my parents, I wasn’t taught by my school, I wasn’t taught by my friends. I came into learning about it more forced than anything else. I went backwards from the standard: Date–>Marry–>Save/Invest–>House–>Child.

I went Date–>Child–>Marry–>Child–>House–> Save/Invest. I don’t think there is anything terribly wrong with that as long as the Save/Invest hits somewhere before 40. It’s sad there isn’t a class in school that forces you to learn these basic financial principals. Yea, there are classes that you can take by choice, but it honestly needs to be something that is required by the school districts, but I digress; the post is about the age gap I think there is an investing/saving gap between generations.

You may be asking, what the heck is Hank talking about here? Well, ask your grandparents where or how they invest? I bet 95% of readers will say their grandparents keep most of their money in the bank in a low interest savings or even their checking account.

Short Tangential point; yes, they MAY have some money in bonds or short term MMAs, yea, well OBVIOUSLY that’s where they want it, quick money, modest returns, low risk and they’re at the stage of life where they need to have it there but how did it get there? I’m guessing your parents or yourselves that told them about that part. You think we have little financial education now, think about how it was in 1919.

But back to the main point honestly, I have asked probably 15 or 20 friends/family that same question and sure enough, it is almost SAD that they still keep their cash in the bank checking account or savings. One of my close relatives I found has had 175k in a checking account for the past 35 years making less than 1% on that money for the past 35 years, and yes it was 175k in 1971.  Now she is in a retirement home, will never go back home, and the government is just going to take their share until it is gone and medicare will then take over.  Just imagine the $ loss.  I asked her about it and she said that she’s never wanted her money out of her immediate possession.  She would have kept it in a mattress if she could, but instead kept it in a local small town bank that was really not doing anything for her and the $.  I think it has a good piece to do with growing up in the Great Depression, hide-your-$-in-a-coffee-can mentality.

So the next piece is our parents between 50-70 – they’ve got a better knowledge than my grandparents, but in my case anyway, maybe just the household I grew up in, but they had no idea of what to do with $ until about 1990 when the stock market became hip again maybe.  My immediate family doesn’t understand still what time can do with $, again my mother said she never learned about money management from the grand’rents (obviously), and didn’t feel the need to learn about it in college.  College was about several other “smoking” guns in the 60s and 70s.    So they’ve gotten a better feeling about the market and compounding interest, but still not as much as Generation X -

Granted, GenX’ers don’t know everything, but I think they’re at a better vantage/vision point then our predecessors for sure – True, it is probably only 30-40% of the GenX’ers investing, but that is 29-39% more than our grandparents.  Like the disclaimer on my blog says, “I would just like to be able to someday give better advice to my kids than when I was young…”  I think it passes a little more down the line with each generation for sure – Guess only time will tell – no?

Filed Under: advice • Compensation • Debt • House • Insurance • Investing • Net Worth • Real Estate • Retirement • ROTH IRA