AACUC Conference Coverage: Insights Into What Young Adults (Don’t) Know About Finances

SNELLVILLE, GA. – As credit unions provide financial education to young adults, the most effective message they can share is the “importance of now.”

That point was delivered by Ionnie McNeil during the African American Credit Union Coalition’s virtual annual meeting. McNeill, who is director of the Better Investing South Florida Chapter, provides young adults with guidance on investment and wealth building.

McNeill told the audience they can never underemphasize how important it is to get young adults to understand the long-term, wealth building value of investing early.

“They need to understand the importance of now,” said McNeill, known as the “Baby Billionaire.”

McNeill said that message is even more important for young adults of color, adding that in Better Investing classes she holds most minority participants know little about investing and most don’t know what a credit union is.

Most Powerful Force

“The most powerful force in the universe is compound interest,” said McNeill, who began investing at the age of seven.

McNeill polled the AACUC audience and asked if they would rather take $1 million today, or the final sum from a penny that doubles every day for 30 days.

“Everyone is going to choose the $1 million that’s right in front of them, right?” said McNeill, who added most people don’t see the true value in waiting 30 days for the revenue from a doubling penny.

But waiting pays off, she reminded.

“Let’s see who benefits most—those who took the million dollars now or those who waited,” McNeill said. “If you were those who chose the penny, you would have is $5.4 million at the end of 30 days.”


The Biggest Obstacle

McNeill said the example shows how hard it can be for young investors to understand the benefits of investing early and waiting for wealth to build.

“I think the biggest obstacle for young investors is at the beginning, when things move very slowly,” she said. “I mean, from our example, one penny turns into two, two into four … but then halfway through the month you really see the trajectory.”

That trajectory is what McNeill said credit unions must help young investors see.

“That’s the energy that I want you to bring to this conversation, which really helps drive home why teaching youth and exposing youth to savings and investing at an early age is so important,” she said.

In the classes she conducts with Better Investing, McNeill said it is clear there is little understanding of investment among young adults of color.

“Most of the students did not have a credit union account, or even know what a credit union is. Even more did not know what a Roth IRA is,” she said. “At the beginning of (a recent Better Investing) program, we had about 400 students express interest, and with the summer and natural attrition we now have 255 students planning to complete the program. In our opening survey we asked if they had a credit union account and 60% said they did not.”

Changing Situation

McNeill said that situation has changed among the students as the summer program progressed, as well as the perspective the future is simply too far out.

“The hardest thing to do is get a young person to understand time,” she said. “Their relationship to time is very different than ours. They live more in the present. They don’t have a past long enough to really be retrospective, and the future seems too far out to plan. But they are actually the richest population, and they don’t realize how rich they can be if they start investing now. A little self-awareness, a little bit of education about investing and you can propel them into spaces they could have never dreamed about.”

Published article available here.