Teens clueless on investing basics: study
More bad news is out for the younger generation and their limited understanding of money.
FOX Business got an advance look at Fidelity Investments’ 2022 Teens and Money Study released Tuesday, showing that 72% of the younger generation say they have “no knowledge about trading stocks and ETFs.”
Nearly half the 13- to 17-year-olds surveyed said that investing “feels out of reach” for them, and only one in five reported that they have started investing.
“According to the study, teens’ understanding of basic financial principles are at alarmingly low rates, with more than half saying investing is too confusing,” John Boroff, vice president of youth investing at Fidelity, told FOX Business. “We know financial education in the United States is a concern for many, so perhaps there’s no surprise teens find investing confusing.”
With only eleven states in the U.S. requiring financial literacy as a high school graduation requirement, educating teens on investing often needs to happen at home.
While seven out of ten teens told Fidelity they look up to family members as financial role models, only 34% reported regularly discussing the topic with their parents.
One finding that further concerned researchers was that teen girls were less likely than boys to say they have talked to their folks about investing, and female respondents were also more likely to say they have no knowledge of researching investments.
However, girls were more likely (60%) to know that teens can trade stocks, compared to 55% of boys.
But the study was not all doom and gloom.
“This study reveals some encouraging news: teens that talk to their parents about investing are more than twice as likely to feel confident about finances,” Boroff said. “Whether it’s opening an account, securing their first job, or starting to invest in the stock market, having ‘The Talk’ about money and investing basics is crucial to kick-starting good financial habits.”
The data also showed that teens want to learn investing skills, with 73% saying they have started educating themselves on trading and investing.
Of the respondents who said they were already investing or planning to do so, 21% said they were “in it for a quick win,” 45% said they were “in it for the long haul,” and 34% answered that they are not sure about their strategy.