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Since the Great Recession, it has been hard for even the hardest working Americans to get ahead. With wage increases slowing and prices increasing, it doesn’t exactly look like it’s going to get much easier anytime soon.
When it comes to millennials, this new generation is facing challenges like record amounts of debt and strict paycheck-to-paycheck budgets. Because of that fact, it can be quite difficult for many millennials to manage to plan and invest for their futures, particularly when it comes to saving up to buy a home. That does not mean, however, that it is any less important.
As we approach the new year, there are a lot of tips to consider if you are a millennial looking to get into investing with this coming year.
Just get started
It’s that simple, the best way to get ahead in investing is to simply start! You can’t accumulate funds if you don’t set any aside and the longer you wait to start investing for your retirement or your livelihood, the hard it’s going to be to catch up.
Don’t invest what you don’t understand
Whether you are looking to invest in a small business or a booming company, don’t put your hard-earned money into anything before you know something about it. Make sure to do your due diligence and research when it comes to investing in a company. As you begin to look into your retirement options, try starting in a field that you are familiar with. Perhaps even try investing into a company that you work with or compete with in your line of work.
What works for your pal may not work for you
There is no guaranteed way to make millions investing. If a friend of yours happened to hit it big on a recent investment, that doesn’t automatically mean that you should follow in line. When it comes to the stock market, lightning typically doesn’t strike twice one time immediately after the other.
Think about bitcoin for instance. The popular form of cryptocurrency has had a number of financial peaks and valleys in terms of value. If your friend got in over a year ago, chances are good they’ve made quite a lot of money on their investment. If you were to follow their lead and get in six months ago, you will likely have lost money.
Keep tabs on what you invest in
When you do identify your investments, you need to be sure to keep an eye on the investments that you do make. This doesn’t mean you have to be obsessive about keeping tabs on your investments, that could take up way too much time and energy, but it is important to know when to cut rope if a particular investment is weighing you down financially. Know when to change your strategy and move your money around if it will benefit you.
Keep your portfolio diverse
As you continue to explore your options when it comes to investing, it is wise to make sure that you spread your investments around among more than one option. Having all your funds focused on one asset can be a very poor mistake as one false step could hurt your ability to continue to invest further down the line.
Keep on top of your budgeting options
Sure, it’s great to invest a bunch of money, but not if that means you have to worry about whether or not you are going to be able to afford rent at the end of the month. There are a lot of useful budgeting apps that you can use to keep tabs on your personal finances so that you can know whether you need to pull back on investing for a bit, sell some of your investments to cover yourself financially, or even amp up your investments if you have enjoyed a strong financial period.
Try different investing styles
Often times the only way for you to learn a new market is to get your hands dirty. There’s nothing wrong with dipping your toes into different investments. It might mean that you lose some money in the short run, but it could absolutely make you money in the long run if you are able to further diversify your bonds. If you’re interested in investing in something like an IRA or real estate, do some research and then invest a small amount of money. Then you’re off to figuring out how to make even more money in this line of investing.
Save as much as you can
Rather than purchasing big-ticket items and impulse buys, remember that even a small amount of saving can go a really long way if you let it grow over time as an investment. Of course don’t hold off on necessary purchases such as home or car purchases, it is wise to choose saving over instant gratification will help you better plan and prepare for the future. On top of that, your account won’t take a big hit with upfront purchases.
Explore different investing tools
There are a ton of different online tools and platforms that exist that have been built specifically to help people invest. Whether it’s FutureAdvisor, SigFig, E*Trade, or something other program, just make sure that you learn the ins and outs of it and that you are sure that you know what kind of fees you have to pay, if any, to use the program to invest.
Be smart no matter what you do
No matter how much or how little you are investing as a millenial, and no matter if you are investing in a well-established multi-national corporation or a risky startup, make sure that you are being as smart as possible. The best way to handle future investments is to perform your due diligence every step of the way.
Keep in mind that everyone’s experience investing is unique to themselves. Don’t try to compare your success with someone you know. Form an investment and retirement plan that works for you, your life, and your current financial situation.
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