Most millennials have likely heard the standard financial advice that adults have constantly reminded them of, from paying off credit bills before the due date to sticking to a budget. However, not many receive the guidance they need to secure their financial futures, such as making the right investment moves or saving up for retirement.
If you’re a millennial who wants to keep up with the financial trends, investment options or discover the best ways to save money, it’s best to hire a financial advisor. These professionals can help you make better and informed decisions regarding investments, tax laws, or insurance policies to achieve your short- or long-term goals with ease.
When talking about money, there are so many directions one can take. To help you out, here are pieces of money advice that every millennial should know to achieve a financially secure future.
The Best Way to Start Investing
Millennials have gotten a bad reputation in the financial world because of their relatively reserved approach to investing. According to a survey, they’re the adult generation that’s less likely to invest in stock or bond markets, with most choosing to save money in cash savings. However, this makes them miss a lot of lucrative opportunities that come with investing. That’s why if you’re a millennial, it’s best you start investing more to accumulate money and putting it to work, saving for the future.
Choosing the Right Investment Options
If you’re thinking about investing but don’t know where to start, here are some of the most popular investment options for short- and long-term goals.
If you have some short-term goals that you want to achieve fast, such as buying a car, education, or home, here are short-term investments that allow you to preserve your savings while allowing you to enjoy modest gains.
There are many bonds, including Treasury bonds, a safe option, and riskier choices like overseas governments that boast high-interest rates and corporate bonds offering higher ROI (Return on Investment). Remember that bonds with more significant incentives tend to be riskier, so it’s best to build a portfolio of bonds with different risk levels and interest rates.
Broad Index Funds
Millennials can hire professionals to balance their portfolio with a combination of safe and risky bonds through a mutual fund. If you only plan on investing for a short while, don’t place your entire savings in index funds.
More investors are experiencing success with P2P lending platforms that allow entities to lend money to individuals looking to pay off their debts without the assistance of a bank’s assistance. This investment option is generally risky and can become a decent source of passive income.
If you have the means to leave your investments alone for several decades, start investing for the long term now as it always performs better than short-term investing. This option allows you to accumulate money for retirement.
Making investments in individual stocks can be quite profitable, although it can be risky. It’s best to look for companies that you think may have the potential for steady growth.
Target Date Funds
This investment option is a great way you can secure finances when you retire. Target date funds operate following a specific retirement year. They’re relatively safe but charge higher fees than other options.
Take the time to understand your investment options to help you reach your goals with ease. Always remember that if you can afford it, it’s best to grab the opportunity now and wait to reap the benefits in the future.