Four out of 10 people do not save or invest for their future

Planning for the future and saving money for tomorrow is perhaps one of the most responsible and priority actions in personal finances, since it improves growth projections, both at home and on a daily basis, and Avoid falling into practices such as abusing debt or living with a lack of liquidity.

However, this thinking is still not as ingrained among people as it should be and the lack of financial education continues to be one of the elements that works most against it. This is confirmed by a recent study by Ualá, which warns that there are even those who think that they do not need the help of an expert.

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This research was carried out in collaboration with the consulting firm Trendsity and examined Latin Americans’ perceptions of savings and investment, collecting data from more than 3,000 people in Argentina, Colombia and Mexico; making it evident that ignorance, fear and distrust weigh as much as the lack of economic resources.

As the report explains in the region, savings and investment are perceived socially as two positive financial strategies, given that, for example, seven out of 10 people perceive savings as a development tool and investment as a synonym for necessary planning for the future.

“When thinking about saving or investing, people are motivated mainly by preparation for their personal or family future and by the possibility of supplementing family income and facing inflation. Only 21% think that the investment is not for something for them (17% in Argentina, 21% in Colombia and 24% in Mexico)”, they highlighted.

Barriers to inclusion

Reviewing the causes that lead people to consider saving or investment as something that cannot be exercised on a daily basis, the Ualá analysts noted that both ignorance, fear and Distrust, such as lack of income or economic resources, are the main barriers.

That said, they pointed out that there are certain myths that over time have become entrenched in popular beliefs as absolute truths that fuel these obstacles. Proof of this is that 48% believe that investments only generate long-term profits or that 33% think that, to buy shares of a foreign company, it is necessary to have an account abroad.

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Pablo Savoldelli, director of Wealth Management at Ualá, assured that a large part of the ideas that are part of people’s imagination are born from ignorance of the market and highlighted that when these alternatives are brought closer to people, their perspective and appetite for this universe changes.

“Today there is an ecosystem of products in which all people can access tools that allow them to take control of their finances and their future. Through our paid accounts, free and with competitive rates. All this facilitates the possibility of generating returns in a simple and transparent way. Democratizing this possibility and, above all, offering the necessary resources to make informed decisions is key,” said Savoldelli.

Investment and investments.

Courtesy.

Among the beliefs that Ualá reported in its analysis is that 33% consider that the only safe investment option is the purchase of dollars, while 36% believe that to invest you need a financial advisor and 34% believe that it is necessary to pay for a subscription to investment platforms.

“These prejudices are, in part, linked to a lack of financial education. Although 72% admit to not having enough knowledge about investments, the majority show interest in learning. 89% say they search for information, resorting mainly to social networks (48%), recommendations from family, friends or financial advisors (45%), websites and forums (30%) and communications, advertising and websites/social networks of financial entities (27%), among other sources, the study added.

For her part, Mariela Mociulsky, CEO of Trendsity, maintained that “prejudices and myths are largely explained by the lack of financial education in the region: only 3 out of 10 respondents positively evaluate their level of knowledge and skills about investments. However, the population of Latin America is eager to learn and almost 9 out of 10 seek information about investments through different means.”

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Savings and investment

One of the data that caught the most attention in the data presented had to do with the fact that 44% of people say they do not currently save or invest and in general, the attitude reflects a conservative trend, in which 37% prefer to insure of not losing money, even if that means lower profits, and 20% would choose to save rather than invest (with a greater preference in Mexico, where it reaches 24%).

Likewise, it was learned that although traditional banking continues to be the preferred option to save or invest (71%), 4 out of 10 people choose digital or fintech banks, within preferences that vary by country.

For example, in the case of Argentina, savings in foreign currency (44%) and obtaining returns through deposits in digital banking and fintechs (39%) or fixed terms (38%) lead. In addition, crypto is gaining ground, with 22% preference.

Colombian pesos

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In Colombia, savings in Term Deposit Certificates (CDT) leads the preferences (41%), followed by investment in real estate (40%) and investment funds (32%) and in Mexico, the options are more traditional, highlighting cash savings (36%) and deposit in savings accounts or checking accounts (33%).

“The preference to avoid the immobilization of money has driven the search for investment options that allow short-term returns. In this context, digital and fintech banks have established themselves as a popular alternative in the region: 74% of people allocate a part of their salary to these entities. Of that group, 71% manage to generate extra income at the end of the month, while 29% tend to spend those returns immediately (in Argentina, this behavior amounts to 34%),” they concluded.

With all this, in Ualá they stated that it is enough to take the step and better understand the market alternatives, to understand that investment is a viable path and that the more one delves into its possibilities, the better the chances of achieving great returns.