• Europeans are not taking full advantage of their purchasing power, leading to a €1.2 trillion loss in financial wealth.
• Reasons behind this include a lack of trust in the financial system, debt, job insecurity, and a lack of financial literacy.
• To combat this issue and be smarter with their money, Europeans should invest in bitcoin or stocks.
Europeans Losing Financial Wealth
It is estimated that Europeans would have €1.2 trillion more in financial wealth if they had invested instead of holding on to cash in bank accounts for emergencies. Data suggests that only 17% own Bitcoin and 15% own stocks— much lower than the 55% ownership rate among Americans.
Causes of Low Investment Rates
The primary reasons why Europeans aren’t investing more are due to a lack of trust in the financial system (many believe it is rigged), debt (especially mortgages), job insecurity, and a lack of understanding about how to manage their finances effectively.
Impact on Millennials
Millennials came of age during the great recession of 2008 which led them to mistrust traditional finance institutions as many experienced firsthand family members losing employment or life savings without punishment for those responsible. This generation has also seen challenging job markets with few opportunities and stagnating salaries combined with COVID-19 pandemic further damaging their career prospects.
Many European do not have basic financial knowledge or skills needed to make wise investment decisions which is another factor stopping them from being smart with their money.
To take advantage of their purchasing power, Europeans should consider investing in Bitcoin or stocks instead of keeping money as cash in banks accounts where it will lose its value over time due to inflation and interest rates being too low to compensate for it. However many face various challenges preventing them from doing so such as mistrust in the financial system and low levels of financial literacy which need to be addressed first before they can start making smarter investments decisions with their hard earned money