U.S. Markets closed

Investment Platform Stash Reveals Findings from First Financial Literacy Survey

NEW YORK, April 5, 2017 /PRNewswire/ --

Topline Results:

  • Widespread misunderstanding among respondents on basic investing, financial planning concepts
  • Millennials actually saving for retirement but failing to utilize 401K
  • Women tend to invest smaller sums of money at a time compared to men
  • Huge gap in investment approach between experienced and inexperienced investors

Stash, the digital investment advisor making investing easier and more accessible for American consumers, today announced the findings of its first annual financial literacy survey for Financial Literacy Month. The results reveal widespread misunderstanding held by Americans of all ages regarding basic tenets of investing and finance. Key findings include:

  • 41 percent of respondents do not understand that a diversified portfolio is a safer investment than a single stock
  • 40 percent of respondents do not understand how inflation works
  • 38 percent do not understand the concept of compounding
  • 26 percent believe a moderate investment should return over 16 percent annually
  • 16 percent do not know if they would prefer a higher or lower interest rate on their mortgage

"Most Americans know they need to be saving and investing for their futures, but they do not understand the fundamentals of what that entails. As the survey shows, financial literacy is problem in America -- not one confined to a specific age or gender," said Brandon Krieg, CEO and co-founder of Stash. "Our findings demonstrate the need to help all Americans establish a strong base of financial literacy to help them create smarter financial habits."

Millennials Are Focused on the Future

Despite popular belief that millennials only care about today, they're investing for milestones such as  marriage, retirement, purchasing a home, and buying a car. In addition to these larger life events, more than any other group, millennials are also putting money away for shorter-term goals such as going on vacation.

What Are You Investing For?


Millennials

Gen X

Boomers

Retirement

61.41%

73.04%

72.58%

Buying a Home

43.07%

20.64%

6.94%

Vacation

32.98%

23.19%

16.19%

Buying a Car

20.31%

9.85%

6.22%

College

17.23%

13.53%

3.52%

Weddings/Engagement

13.99%

3.87%

1.45%

Health Care Costs

8.96%

6.76%

7.33%

Elder Care

4.16%

4.66%

6.51%

Other

14.13%

11.41%

12.14%

 

Even though a majority of millennials said they are investing for retirement, fewer than half (48 percent) contribute to a 401(k) plan, and only 61 percent use a traditional savings account.

"When two out of five survey respondents don't understand how compounding works, you can bet people are missing out on opportunities to maximize their savings," said Krieg. " For millennials to really make their money work for them, they need to utilize more savings and investment tools that capitalize on compounding. This is an area where the lack of financial literacy is really detrimental to achieving long-term money goals."

Women and Men Approach Investing Differently

The survey found that almost half of female respondents (47 percent) invest between $1 and $500 each year, compared to 36 percent of male respondents. However, women lag behind men when investing larger sums of money - 37 percent of male respondents invest over $1,000 per year compared to only 22 percent of women. While most women and men invest some money annually, nearly one in five female and one in ten male respondents admitted to investing nothing each year.

When asked about all the ways they are saving, half of both men and women (50 percent men; 49 percent women) are utilizing 401(k) plans, but men are almost twice as likely to use taxable investment accounts than women (15 percent of men; nine percent of women).

Advanced v. Beginner Investors

The survey also shows a stark contrast as to how investing experience impacts financial decisions. Experienced investors are more than twice as likely to save using an IRA and four times more likely to use a taxable investment account.

How Are You Currently Saving For Your Future?


Advanced

Beginner

401(k)

65.94%

50.97%

Savings Account

61.30%

59.00%

Traditional/Roth IRA

54.18%

23.12%

Taxable Investment Account

51.70%

12.08%

529 Plan

15.48%

3.64%

Other Saving

15.17%

10.40%

I'm Not Saving

6.50%

11.82%

 

Krieg continued, "At Stash, our goal is to not only make investing easier and more accessible for all Americans, but also to provide investors with tools and education materials that will truly empower them to make smarter financial decisions. In our survey, Stash investors scored an average of 11 percent higher, overall, than the general population. Our educational materials are available to everyone in our Learn hub, both in the Stash app and on our website."

For more information about Stash, visit www.stashinvest.com. For media inquiries, contact ditto@stashinvest.com.

Methodology

This survey was conducted online within the United States by Stash Invest using Survey Monkey technology in February of 2017. Over 26,000 Stash investors and 1100 people from the general population completed the survey. The 1100 respondents from the US general population were acquired through the Survey Monkey. Panel using random sampling of people matching the Stash respondents in age and HHI ranges.

About Stash

Stash is on a mission to empower a new generation of investors, giving everyone access to financial opportunity. People can choose where to invest their money, starting with as little as $5, and receive ongoing guidance from the Stash Advisor.

Stash has a simple and transparent fee model of $1 per month for accounts under $5,000 and 0.25% a year for balances $5,000 and over. Clients are not charged additional commissions for trading or fees for transferring money in and out of accounts. The first month is free for everyone. Based in New York City, Stash was started in February 2015 by Wall Street veterans Brandon Krieg and Ed Robinson. Stash is an SEC-registered investment adviser. For more information, visit http://www.stashinvest.com.

CONTACT: Steven Melfi, ditto@stashinvest.com

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/investment-platform-stash-reveals-findings-from-first-financial-literacy-survey-300434754.html