It’s week 3 of National Reading Month, so here’s another personal finance nonfiction reading you can give your students:

Why Young People Shouldn’t Hesitate to Invest

What is it? This US News & World Report fully admits that folks in their 20s find it difficult to invest for a variety of reasons. This article makes three cogent arguments for why they should and addresses some of the hesitations with great counterarguments and suggestions.

Why is it cool? You expect an article urging young people to invest to go with the old, cliched “value of compounding, ride out the market, your money has time to grow” arguments. This article points out some more nuanced reasons to invest while young, such as the fact that even substantial downturns in the market will be offset by the sheer fact that you don’t have much money in the game yet, compared to what you’re investing monthly. They give this example: With $5000 in your 401(k), and adding $1000 per month (which sounds steep to me if I’m in my early 20s), a decrease of 10% will be completely offset by the new money you’re adding.

Questions I Might Ask:

1. Pre-reading:
   • Pretend you’ve just graduated from college. You got your first job, and you’re living in your first apartment. How soon do you start saving for retirement? What’s your strategy?
   • Only 24% of people ages 18-29 have money invested in the stock market (Pew Research Center, 2013). Brainstorm a list of reasons 20-somethings might give for not investing.
2. After you read:
   • Summarize, in your own words, the three main arguments this article presents for why young people should invest.
   • In the section about stock market corrections, the author says you are “dollar-cost averaging in.” Using context clues, what do you think that means? Or, do some quick internet research to figure out what that phrase means. How can dollar-cost averaging work to your advantage?
   • Compare your brainstormed list of why people in their twenties might not invest to the arguments the author presents. Which reasons did the author address? Which were not?
   • In your opinion, does the author make a persuasive argument that young people should invest for retirement? Why or why not?

Where is it in the NGPF collection? This is resource 9 in the “Investment Strategies” lesson in our Investing unit.

About the Author

Jessica Endlich

When I started working at Next Gen Personal Finance, it's as though my undergraduate degree in finance, followed by ten years as an educator in an NYC public high school, suddenly all made sense.