As a group, millennials are not showing much enthusiasm for investing. Forbes says that only 26 percent are buying stocks, much less than the 58 percent of baby boomers who invest. Millennials are really shortchanging themselves and their financial futures.
Some millennials don’t understand investing or its importance. Others don’t know how to go about investing. Many don’t think they have the money to get started. However, it takes time to build wealth. You might not have the cash to invest in a high yield hedge fund today. The time for that will come if you start investing now.
Get Started Today
When you are young, you have one of the most powerful wealth-building tools in the palm of your hand. That tool is time. Breaking the One Percent gives an example. Suppose you start investing $100 per month at age 25. If you earn an average 6 percent annual return, you will have $187,500 when you reach 65. If your rate of return is a few points higher, the amount could be much more.
Many millennials don’t know much about investing. If this describes you, don’t be discouraged. There are many online resources that you can use to learn about investing. Maybe you think you can’t spare much time to become a financial expert. Others have the same problem. This is why many people use mutual funds and hedge funds. Funds are managed by financial experts who do most of the work for you. You still need a working knowledge of basic investment principles, types, and risks. It doesn’t take a whole lot of time to master the fundamentals.
Make Investing Easy
Start your investing with an account at an online discount broker or no-load mutual fund. These financial options offer low fees. Many don’t require a minimum account balance. You can set up automatic monthly deposits. This is a great way to invest, and it will hake it easy to get into the habit of saving.
Invest for Growth
Millennials stand to benefit most if their investments grow. Choose stocks or mutual funds that are likely to appreciate in value. Bonds and similar investments may carry less risk. However, they don’t grow. These income-producing investments are more useful when you near retirement.
Consider International Investing
The United States accounts for about 20 percent of the global economy. This means 80 percent of the investment opportunities lie outside the U.S. Some nations have rapidly developing economies. These offer the chance to get high returns for a growth-oriented investor.