Millennials are often portrayed in the media as being carefree souls who do not think much about their future. The reason they have acquired this image is largely because many of them fit right into that mold from the very beginning. They’re simply the kind of people that don’t worry about tomorrow when they can fully embrace today. Sounds great, right? To an extent, sure – until you start to think about the financial implications.
As far as finances are concerned, it’s crucial that you sort these out before it’s too late, and that usually means as soon as possible. This applies to Millennials too. Studies show that Millennials are actually better at tracking expenses and budgeting than their parents – typically baby boomers – but they aren’t as confident and savvy when it comes to investing.
But where should a Millennial invest their money? Certainly, when you’re young you can afford to take more risks and build up a substantial investment portfolio, but this can take a lot of time and effort. But there’s no safe return of your hard earned money when you put it into stocks. Something a lot of over 60s mention is that they’d put their money towards life insurance or funeral expenses – and for a Millennial, this might sound crazy, but the premiums are much, much cheaper when you’re in your 20s and 30s. A lot of funeral plans also include a will and testament too, which is yet another cost taken care off at once.
Another wise investment is real estate. Granted, housing ownership for people aged between 20 and 45 is lower, but we’re looking at real estate from an investment perspective. With sustained low interest rates and high demand for rental property, there’s definitely an opportunity. Always start small – purchase a studio or one bedroom apartment and take it from there. If you already own your home and have a spare room, you might consider letting this to someone else, but be wary. It’s a sure way of testing your tolerance!
Finally, and one of the safest investments – government savings bonds. U.S. government savings bonds are often overlooked, but they remain one of the best investments as they have very little risk. Savings bonds are backed by the U.S. federal government and offer a competitive interest rate and although they won’t get you rich quick, they will protect your money while providing a steady stream of income. This is ideal for someone looking to invest with as little risk as possible.
Whatever you decide to invest in, it’s a good habit to develop. When you’re young, you have the time and freedom to experiment with investing and with the economy continuing to slowly recover, there’s really no better time than now.