Millennials save but why don’t they invest?

Devlyn Lalonde

Devlyn Lalonde

We asked millennials for their outlook on their personal finances and their views on investing. Overall, we found that while most millennials are savers, few are investors. While three quarters of millennials have their money in their savings accounts only 41% put their money in growth vehicles likes stocks, bonds, or government investment schemes like GICs or RRSPs.

A whopping 75% of millennials have some degree of savings while the remaining quarter have none. 24% have up to $5,000 in saving, while 13% have between $5,000 and $10,000 in their accounts. Additionally, 1 in 5 millennials have between $10,000 and $50,000 in their savings account. This raises the question, if millennials have money stored away, why aren’t the investing it? Let’s try to unravel this ball of millennial yarn and exam some common mythologies.


The first narrative we usually hear is that millennials are burdened with titanic mountains of student debt. It is sensible that millennials wouldn’t be investing because they have immediate liabilities they need to attend to. However, this narrative seems to fall short when we look at what 2000 millennials told us earlier this year. Only 30% have over $10,000 in debt while the remaining 60% have less than $5,000 or no debt at all. What this suggests is that most millennials are not spending their savings on servicing their debt. Their money seems to be remaining in their savings account rather than working for them in other investment instruments.

One disclaimer, in our calculation of debt we asked millennials to exclude mortgage debt. With that said, we know that over half of Canada’s millennials do not own a home and many who do often own purchase in a partnership with their parents (we actually wrote a very good article about this).

So, mortgage debt would only effect about half of our respondents and even then, the full weight of a mortgage is only applicable to an even smaller subset of millennial home owners as many share the burden with their parents and/or a partner. Therefore, if most are not spending their money on servicing debts (of all varieties) let’s figure out why millennials have left their money to languish languorously in their savings accounts.


The second millennial myth surrounding their financial outlook is that they are afraid to invest money after having witnessed the horrors of the 2008 financial crisis. Now, after many studies on human behaviour we have determined that humans, like most other sentient lifeforms, are loss averse. This means that while we like gains, we hate losses, even modest ones. Our brains interpret even some of our smallest losses as full body blows. Millennials have been stereotyped as perhaps the most grotesquely loss averse generation since the Great Depression. So, we tested this hypothesis and asked millennials to rank how risky they thought a list of different investment vehicles were.

When it comes to secure places to store their money, millennials prefer no other place more than commercial banks. 69% of millennials identified savings accounts as the safest place to hold their money, while 19% opted to store their hard-earned dough under their mattresses, and 12% really had no idea. After savings accounts the perceived risk profile of these standard investment instruments went up significantly.

Assets that can be quickly turned into cash are consider the next safest place to store money (41%). There’s even less certainty when it comes to bonds, exchange traded funds (ETFs), and mutual funds. Less than a third of millennials think these standard investment instruments are safe places to house or grow their wealth.

Investing in the stock market also brings anxiety to millennials. Most, (57%) see buying individual stocks as risky investments. Older millennials (those 28 and up) actually think that they have a better chance getting their money back from lottery tickets than putting their money into the stock market (33%). Younger millennials (born 1990 and later) take an alternate view. Only 19% of these younger millennials think that buying a lottery ticket is a safe place to invest their money while a nearly half (47%) would say that investing in individual stocks is a better choice.


Notably, the most persistent variable across millennial age groups is the high level of uncertainty. Simply put, millennials do not know much about investing. Only a small portion of them actively invest their money and of those that do only half (51%) invest it themselves while the rest invest through brokers. Millennials are still very conservative when it comes to investing their money.

So why aren’t millennials investing? Well, we know it’s not debt, despite popular belief they don’t have much of that. Rather, they are undereducated in how different investment vehicles work and while they have savings they have little faith in the financial markets. Banks and advisors need to pacify the fears of millennial investors. They need to educate and demonstrate how millennials can invest securely and confidently as the become the dominate force in financial markets.

This data came from the Canadian Millennials Report, Canada’s largest reoccurring syndicated publication dedicated to understanding the views of Canadian Millennials. We survey 2,000 Millennials twice a year tracking their attitudes over time and their perceptions of current issues. If you’re interested in learning more about the Canadian Millennials Report click here.

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