How Millennials can start investing?
The problem is, millenials are not investing. Bank rate has conducted a survey and only 26% of young people under the age of 30 are investing in stocks. That’s compared to 58% of baby boomers. The question is, why wouldn’t millenials want to invest with stocks tripling since 2009
How can we help encourage Millennials to start investing? Here are some tips that will hopefully inspire our next generation to put some money into the market.
- Start Investing –Now is the best time to invest
“Buy low and sell high”, that’s the best advice millenials can get.
- The Miracle Money Can’t Buy – Time
Millennials have all the time on their side while they are young. As the genius Albert Einstein said “Compound interest is the eighth wonder of the world. He who understands it, earns it…he who doesn’t…pays it.”
“During the 20th century, the stock market returned an average of 10.4% a year. Just $1,000 invested in 1900 would be worth over $19.8 million by the end of 1999. At a 15% average return per year, it only takes 30 years to turn $15,000 to $1 million.” This doesn’t mean we will average 10% returns, but we may.
- Buy What You Know
You know what clothes and shoes you wear, you know what electronics you use, you know what you eat, and you know what media you watch and follow. Those should be your picks for investing. This is not a new philosophy. Peter Lynch professed this and it helped to guide Fidelity’s Magellan Fund from 1977 to 1990, during which time the Funds’ assets grew from $20 million to $14 billion. More recently, investment great, Chuck Carnevale basically professes the same philosophy. I suggest that parents, when they first introduce their young children to the world of investing, take their kids on a walk through the grocery store and start to talk about the products they buy and why.
Millennials, just take a stroll through the grocery store of your life and you can figure out your own portfolio. The key is to buy and hold your stock regardless of what news you hear in the media and what “great advice” your roommate gives you about a “hot tip.” Stay your course, make weekly investing a habit and you should do fine.
- Make It Simple
A survey from the Goldman Sachs revealed that, “About 43 percent of the survey participants said they wouldn’t spend more than an hour getting guidance on an investment, while 13 percent of them said they wouldn’t seek out advice at all.” In the CNN report, “… young investors are more likely to go it alone when it comes to investing. Eighty-seven percent of millennials say they trust themselves to make investing decisions on their own compared with 68% of seniors.” this is according to Capital One investing. Milennials are the mobile generation and there are platforms that are easy to use and doesn’t cost much.
- Stop The Excuses and Start Investing Now
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