Bankrate recently created a guide to investing for Millennials. The Millennial Generation is not only concerned about the ability to retire when they choose, but also outliving their retirement savings.
Many millennials carry a great weight of debt, most of which tends to be student loan debt. The large debt ratio of this generation plays a major role in why they are unable or afraid to invest. It is important to keep in mind that avoiding riskier investments will not help build your retirement faster.
Bankrate reports in their recent article “Time on your side: A guide to millennial investing” why it is so beneficial for millennials to invest early on. The article also provides a guide on how to go about investing, even if you think this is not in your current budget.
According to Bankrate, before making your investment you should evaluate how much you are able to invest. Here are a few steps to follow:
Calculate your total debt: First, figure out how much income you have coming in monthly and how much money is coming out. Some things to consider are rent or a house payment, monthly loan payments, monthly credit card payments, and factor in other debts or payments that must be made monthly. Paying off even a small credit card can help alleviate some debt and provide you with money to put towards your investment.
Determine your financial risk level: Keep in mind that there will always be ups and downs in the stock market. With this being said, if you have a short-term goal that you have been saving for, you may want to start by investing conservatively.
Educate yourself on stark market basics: Bonds, brokerage account, ETFs or exchange-traded funds, mutual funds, and stocks are all terms that you should educate yourself on. The article published by Bankrate is a good starting point for these investing terms.
One thing to keep in mind is the importance of staying up to date on financial news. General stock market news can be found on any major news source. Before you get started with your investing, determine your short-term and long-term goals.
Reference: Bankrate (February 20, 2020) “Time on your side: A guide to millennial investing”