Nearly half of millennials have nothing in their retirement funds. Less than 30% of them have $10,000 (or less) put into savings. Their reasoning, according to Wall Street Daily? They feel they’d sacrifice their quality of life. So, what should you do when it comes to investing as a millennial?

In some respects, their reluctance seems understandable. Retirement is a long way away. Millennials also need to contend with other demands on their money, like paying off student loans or buying a home.

However, saving for retirement doesn’t have to be difficult. It also doesn’t have to take much away from paying for other financial responsibilities. If you’re a Millennial who’s concerned about your money now and in the future, you’ll want to know what your best options are for retirement. Here are a few of them! Investing as a millennial and why now is the best time

Start Early: Investing as a Millennial

CNN Money tells its Millennial readers to concentrate on one thing above all else when it comes to investing. Start early and enjoy the power of compound interest.

For example, a thousand dollars at 5% compound interest will turn into more than $4,000 at the 30-year mark, $7,000 at the 40-year mark, and almost $12,000 by the 50-year mark. This example assumes that the investor will put the thousand into an investment fund of some kind and just leave it there.

This example also doesn’t touch on other factors. If you increase the interest rate to 9% (up from the original 5%) in the previous example, you’ll have almost $75,000 by the 50-year mark.

And that’s on just one thousand dollar investment. Imagine how much you’d have if you invested maybe $5,000 or even $10,000 a year starting at an early age.

For those Millennials who have concerns about diverting funds from their student loan debt or even the cost of their mortgages, compound interest can be one of the primary tools you use to ensure your retirement success and one thing you should consider when investing as a millennial.

There’s An App For That

So now that you’ve decided you want to invest and have committed to investing early on, you’ll want to get some solid financial advice.

However, that may not be as easy for some Millennials as it sounds, according to the U.S. News and World Report. Many people don’t like to talk with a financial advisor. It makes them nervous. There’s a workaround to this, however..apps!

A craft little investment app called Robinhood is a good place to start. The app prompts you for your investment goals. It’ll also want to know how old you are. From there, you’ll have about a dozen options in the stocks and bonds markets to choose from. You also don’t have to worry about not having enough to invest – there is no minimum.

Investing as a millennial 101 – there’s always an app! But what about making every little bit count? Yep. There is an app for that, too. It’s as small as acorns. And like their real-world counterparts, these acorns are capable of growing into big trees, money trees, that is. The app is called Acorns, actually, and its premise is pretty brilliant. According to a Business Insider review, the app turns your change into small investments.

Here’s how it works. Anytime you make a purchase with your bank accounts and credit cards, it automatically invests any of your change. So if you make a purchase for $10.44, the $.56 it would take to make $11.00 gets put into the Acorn fund. Once your account have five bucks in it, it’ll get invested.

You do need to be aware that there is a minimum yearly charge on the account if you don’t have $5,000 in your portfolio. (The charge is $15.00 per annum). This drawback aside, once you set up your account and tell your money where to go, you don’t have to think about investing. If it’s something that you forget to do or don’t have the discipline to do, this app is one way to do it.

Remember as well that Millennials who invest using the power of compound interest make more over their lifetime. Combining compound interest with an automatic investment tool like this helps get those retirement finances going even if you aren’t yet motivated to do it on your own.

As a side note, using a mobile app to invest with also helps you sidestep another big money zapper, investment fees. Forbes cautions investors to avoid accounts that have a commission fee associated with them.

Traditional Investments

While it’s good to take your financial matters into your own hands when investing as a millennial, you shouldn’t necessarily avoid more traditional investment vehicles like a 401K, especially if you’re offered one at work. The Roth IRA or the Roth 401K work especially well for 20-something investors because you choose to get rid of your tax benefits now in lieu of having no taxes on this money later.

This kind of tax-free growth can be compounded by working for an employer that offers some sort of matching funds to go with the account. That maximizes the amount of money you’re saving, plus gives you an extra boost that you didn’t directly work for, at least not from an hourly wage standpoint.

The Risk Factors

There is one more thing to keep in mind if you’re a 20-something investor. Because you have a lifetime of work ahead of you, you can afford to take more financial risks with your money. Forbes suggests putting up to 70% of your money in more volatile investment vehicles like stocks.

That said, you can still spread your investments out over the various investment types, either via your mobile app investing tools or via your retirement accounts at work. Or both.

Final Thoughts on Investing

Retirement investing for the Millennial should start early and aggressively. Start by feathering your nest early on in the investing game, by say your mid-20s. If you have the opportunity to invest through work, take advantage of that.

Finally, remember that good investment advice can be free and just a click away via your favourite mobile app. So why not use the opportunity?!


About The Author

Andrew Altman is the editor-in-chief of an informational website SlickBucks aims to help beginner investors and traders by reviewing financial products and brokerages, sharing advice and tips and publishing helpful guides for new investors and help them to get the kind of financial wealth they desire.


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Twitter: @theslickbucks



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