Americans had a lot of money regrets last year. In a separate GOBankingRates survey, a sizable portion of respondents — 11 percent — claimed that not investing in the stock market was their biggest financial regret of 2017. And, if the results of a new GOBankingRates survey hold true, it doesn’t appear that habit is changing.
GOBankingRates surveyed 5,000 Americans about their investing behaviors and habits. Survey takers were asked if they’ve ever invested in the past, if they’re currently investing, where they’re investing their money and more.
Click through to see the results and find out how Americans are investing their money.
Well Over Two-Fifths of Americans Aren't Currently Investing
The good news from the survey is that the majority of Americans are currently investing. Fifty-six percent of respondents said “yes” to the question: Are you currently investing your money? The bad news is, of course, that leaves a significant 44 percent of Americans who said, “no.”
But remember: This survey only asked respondents, “Are you currently investing your money?” This doesn’t necessarily mean that 44 percent of Americans don’t have their money invested or saved in retirement accounts either, such as 401ks. In fact, a 2018 survey found that many Americans are building their wealth through 401ks.
So, there’s a possibility that some respondents were considering their retirement savings when answering this question — and some were not.
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More Men Are Investing Than Women (but Not by Much)
When breaking down the question by gender, a higher proportion of male respondents said they were currently investing than female respondents: 57 percent compared with 50 percent. Explanations for this discrepancy vary widely and can only be conjecture. However, past surveys have revealed possible reasons, such as lacking sufficient money to invest.
Investing Is Most Common Among Gen X
The overall results by age group show some noticeable variations. People ages 35 to 44 had the highest proportion of investors, with 64 percent that said they’re currently investing. That group is followed by 45- to 54-year-olds, 60 percent of whom said they have their money invested. Combined, these groups approximately make up Generation X.
Millennial investing is split between younger millennials (18 to 24) and older millennials (25 to 34). The groups with the lowest rate of investors are people ages 18 to 24 (49 percent) and Generation Z, 13- to 17-year-olds (39 percent).
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Americans Mostly Put Their Money in the 'Big Three' Investments
Question 2 asked respondents where they are investing their money. Respondents were allowed to select multiple responses from the following answer choices: (1) banking products, such as savings, checking and money market accounts; (2) stocks and/or bonds; (3) investment funds, such as mutual funds and ETFs; (4) cryptocurrency; (5) real estate; and (6) other.
Overall results showed a preference for safer, more traditional investment vehicles. The most popular investment types are called “the big three,” which include “stocks and/or bonds,” with 46 percent of survey respondents selecting this; “investment funds,” with 44 percent of respondents; and “banking products,” with 43 percent.
“Real estate,” though less popular, still garnered one-fifth of respondents (20 percent), while “cryptocurrency” grabbed 7 percent. Seven percent of respondents chose “other.”
Men and Women Have Similar Investment Preferences
Comparing results by gender gives a similar picture to overall responses. The “big three” investment products — banking products, stocks and/or bonds and investment funds — each captured 42 percent or more of both sexes.
Even on the choice of “real estate,” both sexes converge, with 18 percent of women and 20 percent of men that said they’re investing in real estate.
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Real Estate Investing Grows With Age
Across most age groups, the answer to this question was again the “big three.” Generally, more than 40 percent of respondents ages 25 and older chose these three investment vehicles. Investing in stocks peaked at 54 percent of 45- to 54-year-olds. Investing in mutual funds, ETFs and similar funds also grabbed 54 percent of that age group.
An interesting pattern emerged with those who said they invest in real estate. As the age of respondents approaches middle age (35- to 44 year-olds), the percentage of those who chose “real estate” increases and then settles around 20 to 25 percent of respondents ages 45 and up.
Americans Invest for Retirement, Leaving Little Money for Other Purposes
Question 3 asked survey takers: Which of the following reasons most closely matches your investing goals? Despite the quantity and variety of survey respondents, answers largely clustered around “saving for retirement.”
In fact, “saving for retirement” captured 57 percent of total responses, leaving “saving for an emergency” in a distant second with 19 percent, though that is notably high in itself. The third-most popular response was “saving for college” with 10 percent, while “saving to make a large purchase” and “saving for a special event or trip” each garnered less than one-tenth of respondents.
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Both Males and Females Invest for Retirement and Emergencies
Again, when asked about their main reason for investing, the majority of both sexes said “saving for retirement,” with 61 percent of males choosing this and 57 percent of females. The second-most popular response was “saving for an emergency,” though women had a higher rate of this than men.
The Young Invest for Education, Everyone Else for Retirement
On the question of investment goals, only two answers captured a majority of responses: “saving for college” and “saving for retirement.” Nearly 60 percent of people ages 13 to 17 chose “saving for college.” Meanwhile, more than 50 percent of all respondents ages 25 and older said “saving for retirement,” peaking at 83 percent of respondents aged 55 to 64.
More Than One-Fifth of Americans Check Their Investments Weekly
The fourth survey question asked how often respondents check their investments’ performance. Here, responses displayed a bell-shaped curve, with 35 percent of respondents saying “monthly,” followed by “a couple times a year” (22 percent), “weekly” (21 percent), “daily” (16 percent) and finally “I never check my investments’ performance” (7 percent).
For those that would rather “set it and forget it,” there are plenty of low-risk options for your money.
Women Check Their Investments Less Frequently
Based on survey responses, it would seem female investors are less antsy than their male counterparts. Male respondents showed a higher tendency to check their investments’ performance “weekly” and “daily” compared to female respondents. A higher proportion of women also said they checked “monthly” compared to men, reflecting this tendency.
Perhaps the men’s anxiety stems from not having built a strong enough investment portfolio.
Millennials Check Their Investments Most Frequently
When broken down by age, response rates to question 4 still largely matched the bell-shaped curve of overall results. However, there is a noticeable deviation among Americans ages 25 to 34, who have a high rate of checking performance “weekly” (24 percent) and even “daily” (18 percent). It seems that with age, investors tend to settle down to checking performance “monthly,” peaking with 65-year-olds and older at 42 percent.
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Americans Either Invest a Lot or Very Little Over Their Lives
Question 5 asked respondents to give their best estimate as to how much money they have invested over their lifetime. Responses tended to polarize, with nearly one-fifth of respondents saying “less than $500,” whereas nearly 30 percent said “more than $50,000.”
If you find yourself in the pool of respondents that said they’ve invested “less than $500,” know that there are a number of good investments out there even if you don’t have a lot of money to spend.
One in Three Women Have Invested Less Than $500 in Their Lifetime
On the question of how much people have invested over their lifetime, sharp differences emerge between genders. Male respondents clearly have invested more money over time, with 28 percent that said “$10,000 to $49,999” and 26 percent that said “more than $50,000,” for a total of 54 percent who have invested $10,000 or more. This could be partially attributed to the significant gender pay gaps across the country.
Female respondents, on the other hand, clustered around the poles: “Less than $500” grabbed 35 percent whereas “more than $50,000” had the second-most at 32 percent.
Ages Split Between Investing Less Than $500 and More Than $50,000
Question 5 polarized respondents overall, and the discrepancies were even more extreme when broken down by age. A majority of respondents ages 13 to 17 said they’ve invested “less than $500.” Close to two-fifths of young millennials, aka 18- to 24-year-olds, also said “less than $500.” And slightly more than one-fifth of 25- to 34-year-olds have only invested “less than $500” in their lifetime.
Overall, Americans Are Mediocre Investors
The sixth and final question of the survey asked respondents how successful their investments have been. Respondents gave their answers on a scale from 1 to 5, with “1” being “very unsuccessful” and “5” equal to “very successful.” Perhaps not surprisingly, the most popular answer was “3,” which equates to “average” or breaking even, with 34 percent of responses.
On the positive side, 23 percent of respondents chose “4,” meaning their investments have been “successful.” On the negative side, 22 percent chose “1.”
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Men and Women Have Similar Success With Their Investments
There’s essentially no correlation between gender and success of investments. More than 30 percent of both sexes gave their investments a “3” in terms of success. And a little over 20 percent of both men and women rated their investments a “4.”
When you calculate the average success rating for each gender, both male and female investors leaned toward the less successful side. Taking account for all responses, men had an average success score of 2.9 and women averaged 2.5.
Middle-Aged Americans Have the Most Successful Investments
A correlation between age and investment success is fairly elusive. For instance, the percentage of “successful” investors (i.e., respondents that chose “4”) increases from a low of 18 percent among 18- to 24-year-olds to a high of 29 percent among 45- to 54-year-olds before falling off.
Meanwhile, the rate of respondents who chose “very unsuccessful,” or “1,” increases from 20 percent of 45- to 54-year-olds to 30 percent of people aged 65 and older. It could be that older Americans are harsher judges or have had more time to see their investments go south.
It’s important to note that Americans ages 55 to 64 as well as 65 and older were the age groups most severely impacted by the housing bubble of the 2000s, which could be shaping their views of success.
More Americans Should Be Investing -- and With Greater Diversity
Even though it’s great to see that a majority of Americans are currently investing, it still leaves a massive 44 percent out of the game. As any expert will tell you, you don’t earn your way to true wealth through paychecks — you do it through investing. That’s because investing opens your money up to much higher rates of return and the ability to earn compound interest.
There is little diversity in the main reasons for investing. The overriding reason Americans invest is for retirement. However, this predominance can often prevent more opportunistic investments — ones not made solely for necessity, but for profit and social development.
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Methodology: The GOBankingRates survey posed six questions to 5,000 respondents: 1) Are you currently investing your money? 2) Where are you investing your money? 3) Which of the following reasons most closely matches your investing goals? 4) How often do you check your investments’ performance? 5) To your best estimate, how much of your money have you invested over your lifetime? 6) How successful have your investments been?
Responses were collected by a survey conducted July 2 to 6, 2018, using Survata. Survata categorizes the ages of their respondents in the following groups: 1) 13 to 17, 2) 18 to 24, 3) 25 to 34, 4) 35 to 44, 5) 45 to 54, 6) 55 to 64, 7) 65 and over.