Millennials prayer: Gimme Gimme Gimme patience to invest

Millennials have a one-click mentality. When we want something, we’re going to buy it via our phones, pay to have it delivered tomorrow and post a comment on Facebook as soon as we get it. That’s just how the Gimme, Gimme, Gimme Generation — born in the early 1980s to the early 2000s — rolls.

And why wouldn’t we be instant gratification junkies? We grew up with the Internet, mobile phones, instant messaging, on-demand TV and no-wait express lines at Disney. The need for speed has been ingrained in us.

But our obsession with instantaneity and nonstop connection has its dangers.

When it comes to millennials’ saving and investing habits, it could have dismal long-term consequences.

Investing requires patience

There’s nothing instant about investing and finance. In fact, one of the essential elements of successful investing is the excruciatingly slow unwinding of the clock.

Defined very basically, investing is when you buy something today that you believe will be worth more later. With any security or assets that you purchase, the way the latent value in the investment is unlocked is by the simple but difficult act of waiting.

Warren Buffett, perhaps the most famous and successful investor in history, describes it best: “The stock market is a highly efficient mechanism for the transfer of wealth from the impatient to the patient.”

Time plays another critical function in investing. It’s in the “power of compounding.” This is the snowball effect that happens when your earnings from investments are reinvested to generate even more earnings. .

With successful investments, over time, the growth becomes exponential and not merely arithmetic or linear.

Millennials slow to invest

According to the 2014 Wells Fargo Millennial Study, only slightly more than half of millennials have started saving for retirement. To be fair, we millennials have been dealt a bad hand by having to launch our careers during one of our country’s worst economic crises.

Of the millennials who are investing, technology caters to their desire for instantaneity. With companies like E-Trade and TDAmeritrade, you can open an account with as little as $100. The application only takes 5 to 10 minutes to complete, and you can then begin trading at any time, often right from your smart phone.

But this convenience and independence can create unrealistic expectations. While everyone wants to believe in tales of people “getting rich quick,” it’s extremely rare. Picking the right investments is a time-consuming process that requires an extensive understanding of the global economy, the stock market, finance and tax implications.

Tick-tock

Though retirement may be 40 or more years away and deferred gratification may feel unbearable, millennials must start saving and investing for retirement. Time is your friend when you’re investing and your enemy when you’re not. You can never get those non-investing, non-compounding years back. The clock is ticking. For help with saving and investing, consider talking to a financial adviser.

Jennifer Pagliara is a financial adviser with CapWealth Advisors, LLC, and a proud member of the Millennial Generation. Her column, which appears every other Saturday in The Tennessean, speaks to her peers and anyone else that wants to get ahead financially.

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