7 Best Investments For Millennials and Young Professionals

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by Yazi

The current generation of millennials and young professionals is in a unique financial position. Many of them are struggling even though unemployment is relatively low. They have low wages and limited financial literacy. As a result, many of them have paltry retirement accounts and invest no money at all.

That disturbing trend regarding millennials and investing needs to change. Millennials and young professionals will not be able to count on Social Security or pensions like earlier generations. They need to take charge of their retirement and their future through investing. What should millennials invest in? Here are a few ways in which millennials and young professionals can get started in the world of investing and control their own financial future.

1. Real Estate Investment


Real estate is a candidate for one of the great ways for millennials to invest. Several avenues are available for anyone wanting to make money in the real estate field. For those who want maximal profits with unlimited effort, an investor can buy a property and become a landlord. Rent payments help to cover the mortgage on the property and any repairs or marketing that the landlord must pay for. Investors who do not want to act as a landlord can become real estate speculators. They can buy real estate and then sell for what they hope is a higher price at a later time. Speculation involves high risks, high rewards, and many hours of laborious research. In some ways, it can be just as time-consuming as being a landlord with rental property.

Other instruments are also available for more casual real estate investors. Real estate investment trusts allow investors to purchase shares in a company invested in real property. An individual can invest as little as a few dollars into one of these trusts. ETFs, or exchange-traded funds, have a similar function for individuals who want to use real estate as a small part of a diversified portfolio. 



2. Index Funds


Index funds are more passive and low-risk than other investment vehicles. They are mainly for the investor who wants to sit back and take in the returns of vast sections of the market. In return for an extremely low fee, index funds track the performance of a stock market index or the entire stock market. An investment strategy that focuses on index funds often avoids the highs and lows of specific stocks. However, since the approach is passive, this fund may lose more money than other investing approaches when the overall stock market begins to slide.

3. Individual Stocks


Picking stocks is a challenge for any investor. This challenge is especially prominent with young investors who clearly remember the financial crisis of 2008. However, that recent turmoil does not mean young investors still cannot try to pick stocks. Investors can incorporate individual stocks into their diversified portfolio after many hours of research. In order to do this properly, investors must find stocks with strong valuations. Make sure to check earnings and any news that has emerged about the company. Looking to experts can also be helpful. Men like Warren Buffett and women like Karen Finerman have made thousands of trades and have earned millions of dollars buying and selling stocks. Their purchases and decisions often move the stock market. Many of these investors have interviews and newsletters where they share some of their secrets. Learning from these individuals can help anybody trying to get into the stock market to succeed.

4. Bonds


Every investment portfolio needs a balance of safe and risky assets. Bonds are a key safe asset for millions of investors. They accrue capital in different ways than stocks. Many bonds derive their value from the performance of governments or interest rates rather than companies. While millennials and young professionals should keep their investments in bonds low to maximize return, bonds should still be found in their portfolios.

5. Precious Metals


Precious metals are yet another way in which a millennial can earn wealth. The most popular precious metals for investors are gold and silver. These metals can keep their value over time in ways that paper currency cannot. They can serve as an easy hedge against rampant inflation or massive downturns in the stock market.

6. Forex Trading


Millennials and young professionals often have a better understanding of technology than other generations. In certain fields of investing, knowing about technology can be critical. Some of the best investments for millennials involve a technological advantage over other groups of investors. Forex trading is one of those forms of investing.

At its core, Forex trading involves taking in information and using that information to value different currencies relative to one another. The trader takes that information and uses it to buy, sell, and short currencies. Technology improves the process considerably by speeding up both trades and the acquisition of information. When Forex trading is backed up by VPS hosting, a trader can gain thousands of dollars over the competition over time.

7. Invest in New Skills


In addition to traditional investing in exchanges and online, young people should always remember to invest in themselves. Learning new skills can position them to increase their salaries and earn new positions. A new job may mean a raise of thousands of dollars along with better hours and a better living situation. New skills help expand an individual's opportunities and allow for a broader array of jobs that he or she is qualified for. Small investments in time and energy can lead to massive returns in the span of a few months or years.


Conclusion


Millennials and young professionals must not get left behind in the world of investment. Billions of dollars are made every year through stocks, bonds, and real estate in this country. In order to maintain their retirement and keep up with the wealth of other generations, young people need to get off the sidelines and start putting their money to work.

About the Author: Yazi is an inspired writer who enjoys writing about personal growth, self-help tips, and women's lifestyle.



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