Study: City millennials more financially secure
Younger adults living in urban areas generally are more financially secure and more confident in money matters than their counterparts living in rural America, according to a new survey from the FINRA Investor Education Foundation and CFA Institute.
Adults ages 22-37 from rural areas are less likely to invest over the next five years, are less assured in making investment decisions and have fewer investment accounts. They’re also less optimistic about financial markets.
“There are a variety of factors that could be contributing to these differences, and we will be exploring the data from this study to better understand what some of those drivers are – which, importantly, can guide the field on how to close the gap,” said Gerri Walsh, president of the FINRA Investor Education Foundation, which supports educational projects that provide underserved Americans financial knowledge and skills. The CFA Institute represents investment professionals and sets standards for them.
Structural issues are working against those living in rural areas. For instance, the largest metro areas accounted for over three-quarters of national job growth from 2010 to 2017. The share for rural areas was 5.3 percent, the Brookings Institute says.
While the overall poverty rates in rural and urban areas are similar (18 percent and 17 percent, respectively), 31 percent of rural counties suffer concentrated poverty – where at least one-fifth of the population is poor – versus only 19 percent in cities, according to the Pew Research Center.
The consequences of these disparities popped up in the study as well:
❚ Only 50 percent of rural millennials were employed full time versus 70 percent of urban ones.
❚ Only 39 percent of rural young adults believe they will someday not live paycheck-to-paycheck, compared with 49 percent of their urban counterparts.
❚ Only a quarter of rural residents believe their children will be better off financially, versus half of urbanites.
❚ While urban dwellers are more likely than rural residents to hold a bachelor’s degree or higher, investing differences remain even when educational attainment is considered, according to the FINRA Foundation/CFA study.
Almost twice as many urban young adults with a four-year college degree or more plan to invest in the next five years than their rural counterparts with similar education. Likewise, 35 percent of city millennials have high confidence in their investment decision-making versus 26 percent of rural ones.
The differences become less pronounced when looking at ownership of other financial products, such as checking/savings accounts, certificates of deposit, annuities, real-estate investments and life insurance.