Millennial men don't mind
risky investments such as bitcoin, or boosting their money knowledge with the
help of the financial media. But their female peers are wary of risk, leery of
the unregulated world of cryptocurrencies and more apt to gain financial knowledge
from family members and employers.
approaches to personal finance were highlighted in PNC Investments' 2018 Millennials
& Investing Survey, obtained exclusively by USA TODAY
The distinct mindsets about
money, the survey says, likely date to the Millennials' childhoods. When they
were kids growing up, the "financial upbringing" boys and girls
received from mom and dad had slightly different focuses. Females received a
more conservative message, one emphasizing "saving" rather than
Nearly seven out of 10 (67
percent) female Millennials, for example, said their parents encouraged
them to "save" money, versus just 58 percent of males.
Similarly, only 29 percent of females surveyed said their parents
"showed (them) ways to grow wealth." By contrast, 37
percent of males said their financial education was focused on
wealth-building, the survey found.
"For Millennial women,
early savings education and encouragement did not always go hand in hand with
the idea of investing, particularly between the ages of 13 and
18," says Rich Ramassini, senior VP and director of strategy and
sales performance for PNC Investments.
How men view money
The men surveyed
demonstrated a more aggressive approach to risk taking than their female peers,
with 14 percent saying they "embrace risk." That was double the
percentage of women who said they welcomed risk.
The men in the survey
expressed a greater willingness to bet on exotic investments such as bitcoin
and other cryptocurrencies to boost returns in their retirement savings
accounts, such as 401(k)s and IRAs. Their cash was more likely to be funneled
into investments with greater return potential, such as stocks, mutual
funds and exchange traded funds (ETFs).
Men also flashed more
of a do-it-yourself mentality, with nearly a third (32
percent) saying they managed their own investments. A lot of
their knowledge of personal finance was gleaned from financial media (57
percent versus 28 percent of females).
The most common source of
financial education for both sexes came from members of their immediate
families. Both genders gleaned money advice in similar amounts from financial
advisers as well as financial articles, blogs and newsletters, the study found.
How women view money
Women, in general, viewed
market risk with more trepidation and were likelier to build wealth
by saving rather than investing. Only 1 percent said they owned bitcoin, a
signal they viewed the cryptocurrency the way Superman viewed Kryptonite
as a danger.
In a sign of their higher
risk aversion, 90 percent of female Millennials said they held cash
assets, such as money market funds or certificates of deposit (CDs). While
these savings vehicles guarantee you'll get your money back, the returns
are slight. The average nationwide money market account yields just 0.18
percent, and a one-year CD pays 2.21 percent in interest, according to
Bankrate.com. Those modest returns compare with a 4 percent gain for
the broad stock market this year and a nearly 20 percent gain in
A more aggressive investment
strategy could explain why Millennial men between 21 and 35 have saved
an average of $101,500 for retirement, or 34 percent more than
the $66,700 set aside by their female peers,
Another reason why female
Millennials have smaller retirement account balances is that they are
setting aside a smaller percentage of their income in 401(k)s and other
accounts earmarked for their golden years.
Less than half of
female respondents (46 percent) said they were socking away 6
percent or more of their salaries, which means more than
half are not taking advantage of the full employer-matching contribution.
In general, employers match up to 6 percent of worker wages in 401(k)
plans. In contrast, nearly six out of 10 Millennial males (57 percent)
saved 6 percent or more of their pay in these tax-sheltered
retirement accounts, the survey found.
Relationship between risk and return
Young people taking too
little risk, however, could be making a mistake. Investing in stocks over
long periods is a great wealth-building tool, and Millennials
have time on their side. The more years the money is working in the
market, the more investors can take advantage of gains building on earlier
"For members of the
younger generation, risk can be healthy," Ramassini explains.
"People's appetite for risk is often not on par with how much risk they
can actually handle."
Ramassini urges Millennials
to boost their financial knowledge to better determine if they are taking too
little or too much risk.
— even though their parents starting talking with them about managing
money at an earlier age than parents of male Millennials (age 11.6 for females
and 12.7 for males) — were less likely than their male cohorts to express
confidence in their money-management skills.
Only one-third (32 percent)
of female Millennials said they "feel in complete control" of their
financial well-being, versus 43 percent of males. Similarly, only a
quarter (26 percent) of women said they were "confident" that
they are saving enough for the future, compared with 40 percent of
males. And only one in five (19 percent) women said they have a "solid
understanding of how to successfully invest" their money, versus 36
percent of males.
When it comes to saving for
retirement, there's no better time than the present, Ramassini says.
"It's critical that
both male and female Millennials take actionable steps, such as participating
in the markets and building a solid emergency fund — to ensure that their
future is not in jeopardy."
here for the original article from USA Today.