Evolving from savers to investors

Most Americans focus on financial discipline, but not financial growth
Americans are quick to embrace new financial methods and technologies—but not always their underlying strategies and attitude about money. We’ve widely adopted online banking, and most of us use the Internet to help with financial decisions. But when it comes to investing, Americans have difficulty adjusting to today’s realities of longer lives and lower yields.
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Learning discipline but not growth

One of the most deep-seated drivers of our attachment to cash is family influence — an influence that goes back to our first memories of money and what we learned from our parent. Our strongest childhood memories of money usually include savings-related activities, and we also learned to save money from our parents. There is no denying the importance of these values, but they emphasize financial discipline rather than financial growth.

Lingering fear in a changing world

As adults, we hold onto this deeply positive connection to saving – an activity Americans chiefly describe as “secure” – as opposed to investing, which people mostly view as risky. For many Americans, it seems as if investing represents breaking into that cherished piggy bank, rather than the opportunity to achieve long-term goals such as retirement.

Key steps to becoming an engaged investor

We can untangle Americans’ deep-seated emotions around cash by exploring behaviors learned by more engaged investors. These individuals, regardless of net worth, effectively engage with investing through an intersection of discipline, access to information and advice.

Take a moment to think about the similarities between saving and investing

Americans who think of investing the way they think of saving feel more financially secure. In practice, people who describe saving money as investing it into stocks, bonds and funds also have 22% lower cash allocations.

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Ask for advice

Whether or not Americans invest, they are similarly likely to think investing is complicated. Financial advisors can provide services that will help people overcome a wide array of barriers to investing, including lack of understanding of financial products, confusion about how to diversify effectively, need for a financial plan and more.

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Calculate your retirement income

Understand exactly how much income your retirement savings can generate. Financial advisors can provide estimates of a person’s monthly income in retirement. BlackRock also offers a free online tool that estimates retirement income based on current age and savings.

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