Hope you guys enjoy today’s guest post from my friend, Adam! Let us know what you think!
Millennials don’t invest that much.
Well, at least not that often. Millennials ignore the stock market to the extent that there are numerous articles online about why they don’t invest. Usually it’s a combination of factors: unstable income, too much debt, not enough understanding of how trading works, etc.
Really, it all makes perfect sense! You don’t need to hear for the 4,000th time that millennials are having a hard time finding jobs and are graduating with crippling college (or even graduate school) debt. Why would people in our generation put what money we do have into investments, particularly when we’ve lived through devastating market crashes that had our parents staying up at night grinding their teeth into powder?
Well, I can’t completely answer those questions. It’s hard to blame a member of the millennial generation for avoiding, or even distrusting, the stock market. That said, it’s a fundamental truth that investment can grow your finances over time, and most financial experts would advise looking into it. So for those who may be interested, I wanted to post a few beginner investor tips specifically for this generation.
I know, being pressured to invest is one of the most annoying things on the planet for a student or young professional. Been there. But that doesn’t mean it’s bad advice!
One of the lessons that the recent recession taught us is that you can’t afford to put off saving—and the smart way of saving, these days, is investing. Simply put, investments (particularly 401(k) or other retirement funds) grow exponentially, meaning the earlier you put money away, the more it’s going to grow. That doesn’t mean we should all just throw money at the first investment we see, but it does mean that finding strategic opportunities should be a high priority.
Try An App
If you’re curious about actively investing, rather than just putting money away in a savings or retirement account, I have a something to say that probably sounds familiar: there’s an app for that. Well, actually, there are several.
I’m partial to Robinhood, an online and mobile program that offers 100 percent commission-free trading and is incredibly easy to access. After creating an account, you’ll find a sleek interface, easily navigated trading platform, and even tools that help you strategize. Of course, you’ll still need to make the actual trades on your own—and that’s not easy—but if you’re interested, doing it through an app with no fees and easy execution is pretty appealing.
Consider Your Income
Investing in the traditional sense kind of relies on steady income. The thing is, a lot of people in the millennial generations—even if we’re making good money overall—don’t have the steady paychecks typical of our parents.
Why? Well, companies are hiring more freelancers and fewer full-time employees. That, combined with millennials’ famous entrepreneurial spirit, means a lot of us are doing odd jobs or several small jobs rather than sticking with one steady nine-to-five. That means income, even if it’s good, can be sporadic, and this affects how much can be put into a given investment at a given time. It’s not a specific tip in terms of trading strategy or anything like this, but I’d urge you to keep your style of income in mind when choosing investments. Some are more appropriate for sporadic income than others.
Think About A Mutual Fund
If you’re like me, you’re actually pretty interested in the idea of investing—but not the practice of it. Well, it just so happens there’s a pretty good solution for that combination of sentiments. It’s called a mutual fund.
This is not a foolproof guarantee of successful trading. It is, however, a means of investing in a professional manner without doing much of the work on your own. In a mutual fund, you pay a fee to a professional who then manages whatever assets you plug into a fund that also includes money from other investors. It’s all done in a strategic, diversified manner that’s aimed at minimizing losses and increasing the likelihood of a net gain. You’ll owe the fund manager a piece of the pie once you’re done, but you can buy in and pull out whenever you wish. It’s a pretty effortless way to go about it.
Adam McCann is a freelance writer and aspiring online magazine editor. He writes on a variety of topics, but prefers to focus on finance, technology, and general lifestyle pieces.
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