Bridget Eastgaard has an MBA in finance from University of Calgary’s Haskayne School of Business. She runs a company, Money After Graduation, that tries to help people manage money in their 20s and 30s.
As a young investor, she struggled to find resources designed for people in her generation. All the books seemed overly technical or geared to investors in their 50s and 60s.
So she created the Master Class Money investment program, which she sells for $379 (U.S.) at her site. Her goal is to demystify the stock market.
Eastgaard, who just turned 30, wants to use her experience and finance skills to help those in her age group succeed in making their money grow.
Why focus on millennials?
Young people who came of age during the financial crash of 2008 are intimidated by the stock market, she explains. They don’t know where to begin, so they watch their hard-earned dollars sit in savings accounts, earning little or no interest.
She manages her own portfolio in the same style she teaches the course, holding mostly funds that keep up with stock market indexes and carefully selected shares of dividend-paying companies.
“I am not a frequent trader. I find watching the markets stressful and seeing a stock go down in price can put me in a bad mood, even if I don’t take any action and patiently wait it out. Knowing better doesn’t really spare me the emotional response to market volatility,” she told me.
Eastgaard’s course — which has 60 hours’ worth of materials — has a nice mix of text, quizzes and lessons learned from experience. It’s more personal and easier to follow than the Canadian Securities Course for Investors ($495), sold by the Canadian Securities Institute.
“The biggest challenge is getting out of my MBA mindset,” she says. “Originally, I had sections in there about how to hedge your portfolio with options, such as covered calls. But this was way too complex for a new investor.
“As students go through it and give me feedback, I tweak things to make it better. I’m probably going to go back and convert some sections to video. People have told me they like having video. It’s less overwhelming than a big wall of text.”
Vancouver-based Voleo Inc. also wants to attract young investors. It has an app (still in beta form) that lets you create an investment club, compete against other teams and get real-time insights about how you doing compared to your peers.
“Voleo has done extensive research on millennials and their views over several years,” says CEO Thomas Beattie. “There is a lack of trust (arguably well deserved) around the investment industry.
“For the next generation, it’s about transparency, trust and convenience. By using gamification, we promote financial literacy and build a vibrant community. Beyond saving on commissions, there is a clear advantage to combining knowledge.”
AGF, one of Canada’s large mutual fund managers, recently released a survey called The Great Divide, which looked at differences in investing behaviour based on age and gender.
People in their 20s and 30s tend to focus on living expenses and paying off short-term debt, the survey found. Those who save for the future are more likely to have a tax-free savings account than a registered retirement savings plan.
Why do they buy specific investments? There was a significant generational difference.
“Recommended by my financial adviser” was the main reason given by people over age 50 for picking investments. “Easy to understand” was the main reason in the 18-to-34 age group, which also showed a preference for “affordable cost” and “recommended by others.”
When doing research before investing, younger people checked websites, blogs and online posts. Unlike older people, they trusted advice and recommendations from friends, family and colleagues more than from a financial adviser.
AGF CEO Blake Goldring, who has three daughters aged 19 to 24, says saving for retirement is a low priority in this age group. Saving to own a house or condo is the typical response.
Younger investors gather information through their social networks and use mobile devices to track their personal finances. Savings accounts can’t fund their future needs, but they are reluctant to invest in the stock market.
To attract them, companies should adopt plain language and reduce fees and conflicts of interest. This is better than a traditional approach of paternalism, obfuscation and lack of transparency.
Sites geared to younger investors