Millennials get a bad rap for nearly everything, when the truth is this generation is a (generally!) hard working and savvy bunch. A lot of what you are dealing with has been handed down and – let’s face it – you are coming of age during a very stressful time in our country.
If you can get a handle on investing, things could very well turn around. Growing up during a time when our economy has faltered over and over again, many of you are probably tempted to hide your money in your mattresses. As we all know, that doesn’t help anyone, so we’ve shared the smartest investments for millennials in 2019 below.
Investing in Their Debt
Probably the most depressing statistic about your generation is that you have an average of $42,000 in debt, and only 16 percent of that is from student loans. Whoa. And one could argue that this is irresponsible but placing blame isn’t going to help anyone become productive members of society. The worst part about this is it’s likely to become a snowball rolling downhill.
As the Director of Planning for Northwestern Mutual tells CNBC, “As you grow older, your expenses increase. The additional pressures that come onto the pocketbook only grow and your disposable income shrinks in a lot of cases, even if your salary is growing.” Before you begin investing in homes and other things, it’s crucial to get this debt under control.
Investing in Real Estate
Millennials seem to be more hesitant to jump from renter to homeowner in comparison to other generations, but this is a mistake. Home loans typically have a lower interest rate than other types of loans, so you will build credit and, once you pay off the loan, you’ll have an asset to boot. There are also plenty of tax benefits to owning a home, as you can leverage your mortgage interest against your income tax. And as long as you’re enlisting good decision making as opposed to using sentiment, you will surely make a solid choice.
Investing in commercial real estate is another great idea for millennials because it provides a means to immediate cash flow. While it involves a bit more risk than home ownership, it can be a lucrative path to take for a career and/or a side business.
As this article by Commercial Property Advisors notes, it helps to “Discover how you can start small with commercial real estate and work your way up into bigger and bigger deals. If you have limited capital, are risk averse, have very little experience or are intimidated by the big numbers of commercial property, consider starting small.” Consider beginning by flipping commercial properties that don’t require an unmanageable down payment and move on to apartment complexes and other more financially significant opportunities once you’ve got the cushion to handle the risk.
Investing in the Stock Market
This one is particularly challenging for your generation, as you have had a seat front and center to watch the horrible lows our stock market has experienced in recent years. However, any investor worth his or her salt will tell you that the stock market is still a worthy investment, even if you start small. If you’re not completely confident in knowing how to manage your money as far as risk to reward ratio, find a good financial advisor to help you make your choices. He or she will ask you questions to determine what you are comfortable with and, as the old adage goes, with no risk comes no reward.
Investing in Themselves
This one could be a bit touchy, as more and more people are touting the benefits of going straight into the workforce as opposed to going to college. However, there is no such thing as a bad investment when it comes to learning more. Whether it is furthering education, going to a trade school, getting an advanced degree, or simply taking classes online, investing in yourself to better yourself in the workplace is one of the smartest things you can do. And quite frankly, it couldn’t be easier in this day and age of certifications that can be achieved at your leisure.
Investing in yourself is the best course of action that perfectly meets the meaning of investment – putting your resources into what is guaranteed to not only safeguard the initial investment but also multiplies it
Investing in Their Health
Much ado has been made of prevention in the face of our country’s healthcare crisis. And when it comes down to it, staying healthy will help you avoid financial woes. How long has it been since you were sent the link to a GoFundMe page for someone you know or an acquaintance who has been stricken with cancer?
Probably not long, right? Even if this person has the best insurance there is, there are often still an overwhelming amount of out-of-pocket expenses. And much like advancing your education, there is so much information at your fingertips on how to stay healthy. From clean eating and regular exercise to meditation for stress reduction and mindfulness, the ways to be proactive about staying healthy are seemingly endless.
As millennials, you have certainly faced some economic challenges, but you can become financially independent and a force to be reckoned with if you start investing in these ways.