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There’s no shortage of data, trends, and surveys demonstrating that us millennials are inept at this personal finance thing. The number of millennials living at home with their parents has skyrocketed by 20% in the last 20 years. People born in the 1980s are more broke than those of any other decade. Millennials don’t tip. Yadda Yadda Yadda.
Well, according to experts, millennials are making yet another financial mistake–setting cash aside for the future.
According to a new Bankrate.com report, cash is one of the worst ways to earn any returns and will eventually catch up to millennials–especially when you consider “expected longer lifespans, rising medical costs, and uncertainty about Social Security.”
“Millennials are going to have the biggest retirement-savings burden in history,” Greg McBride, chief financial analyst for Bankrate.com told Business Insider.
“The nest egg that they’re going to have to accumulate on their own is going to be bigger than any other generation.”
30 percent of 18 to 37-year-olds thought cash investments were the best means of investing for funds they don’t plan to access for less than 10 years.
“Put your cash to work because cash is an underperforming asset,” said Ida Liu, the global market manager for metro New York at Citi Private Bank.
According to Business Insider, the average American is holding more than $32,000 in cash. Because the money is sitting in a traditional savings account, earning less than 1% in interest, the person is forfeiting an estimated $140,000 in investment returns over 30 years–using a conservative 6% return rate on stock market investments.
Now if you’ll excuse me, I have to dump my savings account on Blockbuster Video stock. I’M GOING TO BE RICH!!!