Can investing make young people happier?

To talk about investing in the context of happiness at a time like this might be seem tone deaf to say the least. The ups and downs of the markets in recent weeks are more likely to have made people unhappy than happy.

But if we try and forget for a minute about the situation we’re currently in, there’s new evidence to suggest that under normal circumstances, the act of investing can actually make people feel better than not doing it at all. And by this they mean something as simple as opening an investment account.

In Blackrock’s Global Investor Pulse, which each year asks what people think and feel about their financial health, they report that once people start investing, 24% feel happier. It also found that 36% of people have a higher feeling of wellbeing after taking their first steps to invest, and 19% feel less stressed. 

43% of new investors also feel more positive about their financial future. Even more encouraging is that new investors say the improvement in their mood is immediate.

For those of us who already have a financial plan, this may simply be interesting to note. (And while we’re thinking about it, I’d love to know if you feel you are happier as a result of knowing that you have a plan in place, and if you noticed this soon after the plan was created.)

But where I think this evidence could be more helpful is with young people

The results of these findings suggest that the benefits investors feel accrue regardless of wealth, age, gender or life stage. This means that the feeling of wellbeing mentioned could be particularly helpful for people who are obviously less likely to start investing, because of the very difficult circumstances they’re in.

Circumstances that were challenging before the Coronavirus pandemic, but which are looking even worse now.

According to this piece Young turn to low pay and parents as pandemic kills career plans, the Coronavirus pandemic has dealt another blow to graduates who were already struggling with issues of debt, housing and career development because it has further limited the options available in the job market.

This is going to make many young people even more dependent on their parents than they already are. 

It also makes the days when we used to joke about Millennials whittling away their mortgage deposits on avocado toast seem like a much more innocent time!

If this is causing you to worry, I can help. 

It may feel as if it would be impossible for someone in their twenties or thirties to contemplate investing when there’s little to spend, never mind save. But even the smallest contribution can have significant compound benefits as the years go by.

And if young peoples’ longevity predictions are anything to go by, they have time on their side and therefore the potential for a regular savings amount to have a real impact on their future. Even just the act of doing this can be enough to boost their wellbeing, as the survey suggests.

So if you think a brief discussion with someone like me might help to inspire your children and help them to see that there is a way out of the gloom, then please pass on my details and I’d be happy to give them a call.

You could even send them this link and they can book a video call with me at their convenience.