I read an article the other day that Rob Carrick psosted on Twitter that we as millenials are scared of high risk investments because of what happened in 2008. Only 12% of millenials are investing in the market and only 28% see it as a long term wealth building strategy.

This makes my heart hurt a little as I’ve had a lot of fun “playing” in the stock market in recent years. I use the word playing lightly because I typically spend a great deal of time researching companies before I purchase them. Alas, I can’t say that the facts in this article are from the truth. A lot of my peers don’t invest or have no idea what to invest in. I think my sister who is 19, actually said she was scared of losing money in the the market. All of these are fair and reasonable thoughts but if you’re investing in something like an Index fund or a blue chip stock there is a minuscule chance that you will actually lose money long term. Yes, the market fluctuates, but the general trend is upwards.

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S&P 500 from 1990 till now

We as millennials need to start investing for the long term. Unfortunately, a 2% GIC isn’t going to grow your nest egg and fund your retirement. However, an 18% return on your portfolio will.

Undoubtedly you will pick some stocks that are losers. I’ve done and so will you. You will lose some money in the stock market but ultimately you will gain much more.

The stock market can be scary but I think it’s really unfortunate there is such a distain when young people think of investing in it. Investing for the long term and having that long term mindset is what will build your wealth.

Greater risk will always lead to the potential for greater reward.

So how do we fix this?

In my mind young people need to identify money (even if it’s $50 or $100 a month) that will be utilized for investing in long term. This money doesn’t need to have any other specific purpose, just money you don’t need right now.

As tedious as it may be the next step is to research some stable, dividend paying stocks or Index funds and start investing in them.

Don’t be alarmed if you’re in the red for a while.

The worst thing you can do is jump ship and sell when you are in the red, give the market some time to recoup. Heck, if you watched the market at the beginning of February and happen to follow any personal finance blogger on Twitter you would know that the market was hurting. Frankly, all I wanted to do is close my eyes until there was a recovery. Fast forward two weeks and the markets are back in the green and we can all breathe a sigh of relief.

Keep the long-term mentality.

By remembering you don’t need this money right away you will be able to weather the risk of your investment portfolio by diversifying in many different types of assets.

Lastly, keep increasing your contributions, it will pay off in the long run.

While $100 doesn’t seem like much now in a few years, or even a decade those sacrifices you made today will pay off when you have tens of thousands of dollars socked away giving you a sense of financial security.

What do you think? Have you taken a risk and invested some of your money, or do you play it safe?