Members of the millennial generation are lucky enough to have the tools they need to live comfortably. When it comes to investing, however, they need to learn as much as they can in order to make the right decisions.
It’s possible for millennials to start building wealth at a young age. New technology has made this. It’s only a matter of knowing the types of investments that can help them reach their financial goals.
If you are a part of this tech-savvy generation, then it’s important to know the investment options that generate the best returns. Here are a few to consider as you get started putting your money to work.
Stocks remain to be a popular option for people who want to start slow and learn how financial markets work. It’s for this reason that millennials should get started on building a stock portfolio. Another reason is the fact that stocks tend to deliver higher returns compared to treasury bonds. This allows for a steady income stream that grows as the underlying business expands.
2. Mutual Funds
In case you are looking to reduce your risk exposure, consider diversifying your holdings by placing your money across different mutual funds. These are portfolios that consist of different types of securities and investment assets, including stocks and bonds. The best advantage of mutual funds is the convenience it brings. Once you invest a certain amount, you always have the option to withdraw funds whenever you need to. In addition to that, mutual funds are professionally managed, so you don’t have to buy and allocate your money across potentially profitable assets.
As popular as it is controversial, cryptocurrency trading has become a sensation as the markets for Bitcoin and Ethereum are growing exponentially by billions of dollars. Younger generations are jumping on the bandwagon and seeing how their initial investments grow overnight. In fact, Bitcoin investments have a rate of return that far exceeds that of other investment options.
4. Precious Metals
From radiant diamond rings to platinum pendants, the jewelry you wear can be a great store of value. Like stock investing, buying gold and silver is an old-fashioned way to grow your wealth. These precious metals are resistant to inflation and they can be easily sold or traded for cash through investment products.
5. Real Estate
Another investment option that also performs well against inflation is real estate. While apartment complexes that generate a steady stream of rental income are too expensive, millennials can purchase them through a real estate syndication where they get to pool resources from other investors and purchase a multifamily property. Another way you can profit off of the real estate industry is to purchase distressed properties at a low price, make improvements on them, and sell them for a profit.
As a millennial, there are numerous ways you can generate wealth. It’s just a matter of knowing which one aligns with your financial goals.