Studies have revealed that millennials, the generation born between 1980 and 1996, are in a financially bad spot! Now what’s more shocking is that this is the most educated generation, when we compare it to the baby boomers ( born between 1946 and 1964) and Generation X (born between 1965 and 1979).
Naturally, one may think that a better quality of education should have meant better fortunes. However, most millennials are not sure that their savings would be enough to suffice their retirement needs. What’s interesting to note is that millennials are among the highest-earning of the three. Despite their incomes and exposure, millennials are confused about financial matters.
Most of them witnessed the global recession of 2008; many of them lost their jobs. They saw the banks fall and companies emerge bankrupt. No wonder that most millennials prefer liquid cash over investments! However, the catch is that liquid cash doesn’t make money. If you truly want to stay ahead of the inflation rates and not exhaust all your money beforehand, you should not keep your money idle.
Following are a few investment avenues that could benefit you depending on your goals and risk appetite:
Mutual funds:
Mutual funds are financial assets, which generate a pool of money and allow investors to buy securities. They can be further divided into two subgroups: Equity and Debt. Depending upon the market evaluation of the company you invested in, you will get the returns. People with a low-risk appetite should have a portfolio with more debt funds than equity. You should know that generally equity funds offer higher returns, but they also come with a higher risk than debt funds do.
Precious metals:
Gold, Silver, and Platinum comprise the category of precious metallic assets. You could invest in these via Exchange Traded Funds (ETF), stocks of their mining companies, metal certificates or buying them in their compact physical state. Their prices fluctuate as per the market movements. However, precious metals in their physical state can always be exchanged for useful items during an economic crisis.
Therefore, precious metal investments do not just promise returns, but also emergency cash during your financially tough times. It always pays to invest the generated corpus into physical metals. However, the returns and the safety blanket that come with precious metals depend upon their purity. An impure or fake metal would not fetch you much. Hence, we recommend you only purchase pure bullions from verified buyers and for that one can visit website of professionals.
Stocks:
When you own the stocks of a company, you also own that company in accordance with the number of shares you have. Say, you have purchased 38% of a company’s total stocks, then, you own 38% of that company, and thus, its overall evaluation too. However, the stock market isn’t a predictable one, and those with a low-risk appetite should only proceed in the stock market under expert supervision.
Bonds:
Many people confuse stocks with bonds. After all, they are both issued by the company you invested in. However, when a bond is issued to you, the amount you invest in a loan to the issuing company. In return for the loan, the company pays you the amount back with interest. Bonds, like stocks, move depending upon the company’s performance. Thus, you should be careful while investing here.
Bank schemes:
Both private and government banks offer schemes, wherein you get a regular interest rate over your investment. Although they are more stable than the stock market, the ease of investing comes with a lower rate of interest than the other financial asset options.
Insurance:
Insurance such as health insurance, car insurance, home insurance, etc, do not multiply your money or even intend to do so! However, they do offer protection against a sudden financial burden that may arise, thus, saving you a significant amount of money when an unfortunate event occurs.
However, there are some Life insurance plans, which offer a generous pool upon regular investments made over the years. The insurance money can be liquidated upon maturity of the policy or in the event of an untimely demise of the policyholder. Please read insurance papers carefully before signing them.
Real estate:
Much like precious metals, real estate is a physical asset. Real estate has a high resale value in a healthier economy. Even during the lows, you could always rent the land out and get some returns. However, if buying a luxurious house is one of your life goals, then, this would be more than just an investment for you. Please note that if you have to go under behemoth debts to afford an investment in real estate, it is best to consider other tools for investment.
We hope this article has helped you understand the various investment avenues available in the market. Happy investing!
