Millennials don’t have the best reputation when it comes to investing as many people accuse them of either not investing enough or investing too much. However, they’re one of the best generations when it comes to saving and investing. Here’s how millennials are becoming some of the economy’s top investors.
Investing in Life Insurance
With many insurers providing an eye-catching and interactive design of new insurance websites, the younger generation is now more than eager to invest in life insurance. It helps them conveniently see what different insurers are offering with ease. Life insurance can help individuals get profit through an array of policies, and as you invest in these different insurance plans and finish the term, you get all the benefits of it. It helps anyone invest for an extended period and let them achieve their goals later on. ;
Saving Money Earlier
The best thing for anyone to do for their investments is to start early. Any investor can grow their wealth exponentially if they start investing and saving money consistently and earlier. This move is critical for young millennials as these savings can gradually rack up to significant sums over time. For instance, a person who invests $100 monthly starting from age 25 to age 35 can retire with more cash than an individual who invests the same amount per month starting from ages 35 to 65, assuming they have the same return rate. ;
Investing in 401ks
401ks are a branch of employer-sponsored plans and are among the most effective and simplest ways for the younger generation to start successfully investing for their future. A business study showed that the average bank account balance of a millennial with the 401k plan incorporated is around $129,000. More employers are now providing these retirement plans, and you should take advantage of this lucrative opportunity by contributing at least enough to achieve the full employer match.
Leveraging Health Savings Accounts
Millennials are taking advantage of health savings accounts while they’re fit and healthy to grow their earnings over time. These young people aim to pay for their current medical expenses out of pocket or out to let their HSA grow and compound on a tax-free basis, allowing them to tuck away hefty emergency funds. However, to qualify for an HSA, you need to be already enrolled in an HDHP (High-Deductible Health Plan).
It’s no secret that the younger generation is the most vocal regarding social and environmental issues. Because of this, millennials have been the main driving force of environmental, social, and corporate governance (ESG) investing. Their passion for a better world can potentially drive the initial $15 trillion to $20 trillion for ESG investments in the United States. Research studies have shown that top ESG-based companies were more profitable than their peers, and sooner or later, impact investing can become the new norm in the investment world, according to experts.
Constantly Seeking Help
A great trait that most millennials have is that they’re open about seeking advice regarding their financial goals. These individuals often seek personal advice from professionals they can trust in the field, like family-referred financial advisors, allowing them to make better and informed decisions. This self-awareness is an essential trait that any good investor should have.
Although millennials are continually getting a bad rep because of their different approach to investing and life, they are quickly becoming some of the best in the game. Think like a millennial, and start your financial journey seamlessly.