Investment Platform Stash Reveals Findings from First Financial Literacy Survey
Topline Results:
- Widespread misunderstanding among respondents on basic investing, financial planning concepts
- Millennials actually saving for retirement but failing to utilize 401K
- Women tend to invest smaller sums of money at a time compared to men
- Huge gap in investment approach between experienced and inexperienced investors
Stash, the digital investment advisor making investing easier and more accessible for American consumers, today announced the findings of its first annual financial literacy survey for Financial Literacy Month. The results reveal widespread misunderstanding held by Americans of all ages regarding basic tenets of investing and finance. Key findings include:
- 41 percent of respondents do not understand that a diversified portfolio is a safer investment than a single stock
- 40 percent of respondents do not understand how inflation works
- 38 percent do not understand the concept of compounding
- 26 percent believe a moderate investment should return over 16 percent annually
- 16 percent do not know if they would prefer a higher or lower interest rate on their mortgage
"Most Americans know they need to be saving and investing for their futures, but they do not understand the fundamentals of what that entails. As the survey shows, financial literacy is problem in America -- not one confined to a specific age or gender," said
Millennials Are Focused on the Future
Despite popular belief that millennials only care about today, they're investing for milestones such as marriage, retirement, purchasing a home, and buying a car. In addition to these larger life events, more than any other group, millennials are also putting money away for shorter-term goals such as going on vacation.
What Are You Investing For?
Millennials |
Gen X |
Boomers |
|
Retirement |
61.41% |
73.04% |
72.58% |
Buying a Home |
43.07% |
20.64% |
6.94% |
Vacation |
32.98% |
23.19% |
16.19% |
Buying a Car |
20.31% |
9.85% |
6.22% |
College |
17.23% |
13.53% |
3.52% |
Weddings/Engagement |
13.99% |
3.87% |
1.45% |
Health Care Costs |
8.96% |
6.76% |
7.33% |
|
4.16% |
4.66% |
6.51% |
Other |
14.13% |
11.41% |
12.14% |
Even though a majority of millennials said they are investing for retirement, fewer than half (48 percent) contribute to a 401(k) plan, and only 61 percent use a traditional savings account.
"When two out of five survey respondents don't understand how compounding works, you can bet people are missing out on opportunities to maximize their savings," said Krieg. " For millennials to really make their money work for them, they need to utilize more savings and investment tools that capitalize on compounding. This is an area where the lack of financial literacy is really detrimental to achieving long-term money goals."
Women and Men Approach Investing Differently
The survey found that almost half of female respondents (47 percent) invest between
When asked about all the ways they are saving, half of both men and women (50 percent men; 49 percent women) are utilizing 401(k) plans, but men are almost twice as likely to use taxable investment accounts than women (15 percent of men; nine percent of women).
Advanced v.
The survey also shows a stark contrast as to how investing experience impacts financial decisions. Experienced investors are more than twice as likely to save using an IRA and four times more likely to use a taxable investment account.
How Are You Currently Saving For Your Future?
Advanced |
Beginner |
|
401(k) |
65.94% |
50.97% |
Savings Account |
61.30% |
59.00% |
Traditional/Roth IRA |
54.18% |
23.12% |
Taxable Investment Account |
51.70% |
12.08% |
529 Plan |
15.48% |
3.64% |
Other Saving |
15.17% |
10.40% |
I'm Not Saving |
6.50% |
11.82% |
Krieg continued, "At Stash, our goal is to not only make investing easier and more accessible for all Americans, but also to provide investors with tools and education materials that will truly empower them to make smarter financial decisions. In our survey, Stash investors scored an average of 11 percent higher, overall, than the general population. Our educational materials are available to everyone in our Learn hub, both in the Stash app and on our website."
For more information about Stash, visit www.stashinvest.com. For media inquiries, contact [email protected].
Methodology
This survey was conducted online within
About Stash
Stash is on a mission to empower a new generation of investors, giving everyone access to financial opportunity. People can choose where to invest their money, starting with as little as
Stash has a simple and transparent fee model of
CONTACT:
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/investment-platform-stash-reveals-findings-from-first-financial-literacy-survey-300434754.html
SOURCE Stash
Boston Among Region’s Solar Leaders, But More to Be Done
APNewsBreak: Thousands of defects found on oil train routes
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News