Latest news with #GenXers'
CNBC
4 days ago
- Business
- CNBC
90% of women investors say they're 'on track' to achieve money goals — but most share a common regret, survey finds
Women who invest began at an average age of 31, but most wish they had started putting money in the market earlier, a recent survey said. Nearly all — 90% — of the women investors surveyed said they're "on the right track" to achieve their financial goals, according to the survey, by Charles Schwab, an investment and financial services firm. However, 85% share a common regret — they said they wish they had started investing at an earlier age, the survey said. When the age is broken down by generation, Schwab found that millennials began investing at age 27, on average, Gen Xers' average starting age was 31, and baby boomers started at an average age of 36. Here's a look at other stories affecting the financial advisor business. Schwab polled 1,200 women in the U.S. ages 21 to 75 in January. The report said they each had at least $5,000 in investable assets, not including retirement accounts or real estate, and were all primary or joint household financial decision-makers. Some of the top reasons respondents said they began investing later in life than they would have liked were a lack of financial knowledge, 54%, and limited funds to invest, 53%, according to Schwab's report. There's an advantage in getting started with investing as soon as you can, even if you don't have much to contribute at first: You'll benefit from time in the market, according to Carolyn McClanahan, a certified financial planner and founder of Life Planning Partners in Jacksonville, Florida. "Start saving while you're young because you have lots of years for your money to grow," said McClanahan, a member of CNBC's Financial Advisor Council. An early start to investing harnesses the power of compounding. Compound interest means your money earns interest on both the original amount you invest and on the interest you've already earned, said Jeannie Bidner, a managing director and head of the branch network at Charles Schwab. Compound returns are broader, and typically include other types of investment gains, such as dividends and capital gains. Compounding creates a "snowball effect" for your cash, she said. "The sooner you get started, the better." Let's say a person begins at age 25 investing $6,000 per year, with an average 7% annual return. By the time they're 67 years old, the account balance would be almost $1.5 million, according to Fidelity Investments. If that individual delays starting to invest until age 30, they would end up with just over $1 million by retirement. In other words, that five-year head start offers a bonus of nearly half a million dollars. It's not just about getting a head start. Staying invested through major market swings and sticking to your plan are essential to meeting your financial goals. More than half, or 58%, of the women in the survey said they learned to stay invested despite the ups and downs of the market, Schwab found, and 42% said they learned to create a plan and stick to it. While market volatility can "feel like you're at a casino," it's important to disregard the major swings and focus on your long-term outlook, Katie Gatti Tassin, author of "Rich Girl Nation: Taking Charge of Our Financial Futures," said at an event Wednesday at 92NY, a cultural and community center in New York. "It's not a get-rich-quick scheme, it's a get-rich-slowly scheme," Gatti Tassin said.
USA Today
27-02-2025
- Business
- USA Today
More millennials are falling into debt. What's to blame for worrisome trend?
More millennials are falling into debt. What's to blame for worrisome trend? Show Caption Hide Caption Baby Boomers not retiring may block Millenials, Gen Xers' career goals As more baby boomers put off retirement, millennials and Gen Xers are finding it harder to move up in the workforce. USA TODAY More millennials are entering debt consolidation, new data suggest, a worrisome trend for a generation that has fared comparatively well with its finances in recent years. Millennials, born between 1981 and 1996, represent 43% of new counseling clients at Money Management International, or MMI, leading all other generations, the debt-counseling nonprofit reports. The agency's average millennial client now carries $30,000 in unsecured debt, including credit card debt. 'We're seeing this huge jump in the number of millennials that are coming to us,' said Kate Bulger, vice president of business development at MMI. 'It kind of feels like it came out of nowhere.' MMI is a Texas-based debt-counseling agency that has served more than 2.5 million consumers, with a focus on dramatically reducing interest rates on credit card debt. In the past, typical MMI clients were in their 40s and 50s, 'folks who are starting to think significantly about retirement,' Bulger said. Lately, however, counselors are meeting with many more consumers in their 30s. 'And that's unusual,' Bulger said, 'because that's the time in your life when you typically don't see as much credit card debt.' High inflation and interest rates are driving up debt Consumer debt has been rising in the pandemic years, an era of unusually high inflation and elevated interest rates. People owe more on their cars, student loans and credit cards. In 2024, MMI saw a 35% year-over-year increase in overall demand for financial counseling, according to agency data. The average amount of unsecured debt held by those clients, excluding mortgages and car loans, now tops $30,000. Over the pandemic years, agency officials say, millennials have emerged as the largest group seeking debt counseling at MMI, and by a wide margin. Millennials who seek counseling have the highest car-loan balances of any generation, topping $28,000 in many states, the agency says. Nearly half of millennial clients report financial hardship from credit cards. 'It was very dark for a while' Ian Spigel-Blum, 34, came to MMI in 2023 with six-figure credit card debt. And to echo Bulger's comments, the debt seemed to come out of nowhere. Spigel-Blum works in the gaming industry. During the pandemic, he built up a lucrative side business selling trading cards: Pokémon, Magic: the Gathering, and the like. He did so well that he opened a store in the Virginia Beach region, putting the expenses on credit cards. Just months after he opened the store, Spigel-Blum lost his day job. The store was doing well, but not nearly well enough to replace the lost income. 'It was very dark for a while,' Spigel-Blum said. 'I was paying $6,000, $7,000 a month, just in interest payments.' The interest rates on his cards ranged from 17% to 25%. Debt counselors negotiated with the card companies and knocked them down to under 3%, on average. Now, Spigel-Blum is on track to repay the card debt within four years. At one point, Spigel-Blum had actually suggested divorcing his wife, just to get her clear from his debt. She refused. They just welcomed their first child. Looking back, Spigel-Blum marvels at how quickly his finances went south, with credit cards he'd acquired online at the click of a mouse. 'I think my generation is just computer-savvy enough to be dangerous,' he quipped. Rites of passage: A first home and a third-row seat To some extent, rising consumer debt among millennials may reflect the life changes that come with entering your 30s and approaching your 40s. Many in the millennial generation are getting married, having children and purchasing first homes. That last goal, at least, feels increasingly out of reach. With median prices topping $400,000, homeownership continues to elude nearly half of millennials. Two-thirds of millennials who seek debt counseling at MMI are renters. In recent years, however, the millennial generation has fared remarkably well on many other measures of household finance. A study by LendingTree, the personal finance site, found that millennials had a higher median net worth in 2022 than either Gen X or boomers reported at the same point in their lives. Millennials also had more cumulative earnings than older generations, when comparing the cohorts at similar ages. 'That generation has taken punch after punch' The generation has come a long way, finance experts say, considering that many millennials entered the job market during the Great Recession of the late 2000s. 'That generation has taken punch after punch,' said Matt Schulz, chief credit analyst at LendingTree. 'And now, millennials are aging into that space where they've got a couple of kids and a big three-row car that they need to take their kids to soccer practice and recitals. And they still have student loan debt.' A 2024 report from LendingTree found that Generation X held the most non-mortgage debt, a median $33,859, based on a data from the 100 largest metropolitan areas. Millennials ranked second, with $30,558 in median debt. Baby boomers placed a distant third. But newer data from the Federal Reserve suggests that millennials, and thirtysomethings in particular, are carrying more debt now than a few years ago, especially by comparison with other age groups. In the closing months of 2019, consumers in their 40s had the most total debt, $3.6 trillion, followed by Gen-X fifty-somethings ($3.3 trillion) and millennial thirty-somethings ($3 trillion), federal data show. By the close of 2024, the generations had switched places. Forty-somethings still had the most total debt, $4.7 trillion. But now, thirty-somethings ranked second, with $4 trillion in debt. Fifty-somethings had fallen to third. 'We're talking to people who never needed to live on a budget before,' Bulger said. 'We're talking to people every day who say, 'I want to get married, but we need to take care of this debt first.''
