In this Spotlight feature, we speak to Jack Brovie, CEO of investment education specialist Alvion Investing about what the recent market unrest can teach millennials. Plus, how apps are helping millennials become better with finances.
What have been Alvion’s key priorities amid the recent market volatility? What do you think millennials can learn from this?
The most important thing you can do during a market pullback is to not panic! Stick to your plan and take advantage of the situation. As long-term investors, we like to view volatility in the stock market as an opportunity. The recent sell-off in the market has caused a lot of great stocks to undeservedly fall. This gives investors an opportunity to invest in some outstanding companies at a discount. Last week, a share of Facebook’s stock would have cost me $195, now I only have to pay $180 for it. That’s an 8% sale on one of the best companies in the world. Thank you very much!
We have much more information on how to profit from a drop in the market in our new blog post, Buy the F’in Dip.
What is the thinking behind Alvion? What inspired you to set it up?
Only 20% of millennials are currently investing in the stock market. That number is way too low. If you ever want to retire you have to be investing in the market. There’s really no other way to grow your money fast enough for you to reach financial independence. The problem is that most millennials don’t know anything about investing. And it’s not their fault. No one taught us this stuff in school.
After I graduated from college and started trading full time, many friends reached out with questions about investing. I quickly realised that many millennials want to start investing, they just don’t know how. This inspired me to share my knowledge of the stock market and launch Alvion Investing. I created an online course and started writing weekly newsletters so my fellow millennials could learn how to invest successfully.
Do you think millennials approach personal finances differently to other groups? Is the industry doing enough to cater to these differences?
The way our generation approaches finances is completely different than prior generations. We are much more sceptical when it comes to investing. Most of us grew up during the financial crisis. That experience has scared a lot of people away from the stock market. It’s a real shame because the stock market has historically been the best tool for growing one’s wealth.
I don’t believe the finance industry has done nearly enough to solve this problem. The industry as a whole is overly complicated and not very transparent. This only leads to more scepticism when it comes to millennials and their finances.
To what extent is a lack of financial education affecting millennials?
Lack of financial education is having a very negative effect on millennials. Many are falling behind when it comes to reaching long-term financial goals such as buying a house and retiring. They don’t know how to develop and implement a plan to reach those goals.
In college, I was required to take a Theatre Appreciation class and a Spanish class but not a personal finance class. That makes no sense! I hear similar stories from our members all the time. In my opinion, financial literacy is the most important skill a young person can learn. It will make every aspect of your life easier!
How well do you think millennials are coping when it comes to budgeting and personal finance?
I think we are getting better when it comes to budgeting. Apps such as Mint make it incredibly easy to set up a budget and track your spending.
I have an interesting theory as to why some millennials are struggling to save money though. It has to do with social media. Whenever I check out my Facebook feed, it seems like half the posts are people showing off new stuff they bought. I bet a lot of people subconsciously decide to buy some things they don’t need because they see all their friends doing it.
If you could give millennials just one piece of advice about personal finance, what would it be?
JUST DO IT! The most common feedback I hear from our followers is “Wow, this is really fun. I wish I started investing much sooner.” There are so many misconceptions out there about investing. It’s too time-consuming, too difficult, too risky, too much work. None of those preconceived notions are true. The most difficult part is just taking that first step and buying your first stock.
What could the financial services industry do to make finance simpler?
Hah! Does the industry want to make finance simpler? They make more money by keeping things complicated. If they do want to make things simpler then I’d suggest being more transparent with their fees. Many millennials are hesitant to deal with various financial services because they have no idea what the real costs are.