5 Essential Investing Moves For Millennials
Millennials are the next generation of the baby boomers. It is the young crowd that is tech savvy, has a good education and has joined the productive mainstream. We can argue that investing essentials remain the same for everyone, but here is the crowd that can take on more risk and a longer term perspective for their investments. Here is what millennials need to do.
Start thinking about your future goals
It is hard to think about what you will do at the age of 50 when you are just 25 years old. The only problem is that time flies much faster than you care to imagine. The moment you have started earning, start thinking about your long-term goals. Even if you are single, start seriously thinking about your retirement. Do you want to work till the age of 60 or do you want to retire early or do you want to take the entrepreneurial route. Either way, you need to plan a nest egg. The earlier you start, the longer you save and invest, and hence bigger will be your nest egg.
Take on risk, conservatism is not the answer
It has been observed that the average millennial is a lot more conservative as compared to the previous generation when it comes to saving and investing. That is largely because they have had a more secure upbringing. The baby boomers took all the risks, so that the millennial is much better off at a young age. Most millennials will learn along the way that some amount of risk is essential to create wealth and to overcome the vagaries of financial markets. You don’t have to go all out without considering the consequences but surely you can consider investments like index funds, ETFs or diversified equity funds, among others.
Think long-term and be systematic in investing
Millennials must start thinking about systematic and disciplined investing. Make a budget; try to squeeze maximum savings from income and invest systematically. Over the longer time frame, that can matter a lot more to your long-term wealth creation.
Spending is good but don’t splurge
If you are planning your next fancy bike or upgrading your car or getting a designer suit, think again. There is nothing wrong in indulging once in a while but don’t get obsessed with it. Most of these spends hardly create any long-term value for you, so keep the urge to splurge within limits. A good way to do it is to set budget and plan your occasional splurges. That way you don’t compromise on your core investing needs.
Invest in upgrading your skills and re-skilling
This is probably the most important need you must address in the future. With the advent of new technologies like artificial intelligence, machine learning, robotics, among others, your jobs are changing on a daily basis. Re-skilling could be one of the key areas of investment in the years to come. Create a corpus for that!
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