Millennials will face a plethora of investment options in the next five years. Millennials are getting more involved in their financial lives. They are willing to make trade-offs to achieve their financial goals. As a result, they will likely be the first to adopt wealth-building apps and mobile banking solutions. This trend will only continue as they grow older and begin to inherit the financial fortunes of their parents and grandparents. Then, they’ll be able to invest in various forms of equity, including Real estate, Acorns, Mutual funds, Chime, and ELSS.
Acorns
Investing with Acorns is an easy way to build up your savings for the future. The app helps you round up purchases to the next dollar and invest the spare change. Then, it automatically rebalances your portfolio based on your investment goals.
Acorns offer several different investment options. You can invest your spare change every time you purchase or set up recurring investments that are programmed to happen daily or weekly. It’s also possible to invest your savings in stocks or cryptos. In addition, our Motley Fool vs Stock Rover can help you identify the best investment research firms.
Acorns is a micro-investing app that has gained popularity among young people. It aims to address the financial fears of millennials. It also features an educational platform called Grow, designed to answer common financial questions.
Chime
One of the more popular mobile banking solutions is Chime. This fintech company is headquartered in San Francisco and has over 1.7 million customers. Its main products include a free checking account, a savings account, and access to a network of 60,000 fee-free ATMs. Chime also provides various free services, including fee-free overdrafts and Early Direct Deposit.
Chime has been in the fintech game for a few years now. It has also recently landed an impressive funding round. The company has secured $1.5 billion in funding, with $120 million going to its core bank and $14.5 million going to its mobile banking division.
Mutual funds
Investing in a mutual fund is a way to support a certain amount of money, usually in various securities. Different mutual fund types include exchange-traded funds (ETFs), actively managed funds, and index funds.
Target date funds are a common way for workplace retirement plans to invest for a specific year. However, they may only be for some. Many millennials opt to use a TDF when they match their retirement year.
ELSS
If you are a millennial, you are likely to be thinking about tax savings. ELSS can be a great way to save taxes and build a portfolio. But you need to know how to invest.
Considering ELSS as an investment option, it is essential to evaluate the various options carefully. You will want to ensure that your investments fit your risk profile and horizon. For example, if you have a short investment horizon, you may want to invest in low-risk options. However, if you have a longer investment horizon, you should invest your money in equity funds.
There are several ELSS investment options for millennials. The safest option is to invest in a systematic investment plan (SIP). This investment allows you to take the least risk and maximize your return. In a SIP, you make a fixed amount of money and then invest it in a mutual fund portfolio over three years.
Real estate
Investing in real estate can be a wise choice for many people. However, it is essential to consider the market before committing to a purchase. There are many factors to consider when buying property, such as location, affordability, and growth. In many cities, renting may be more affordable than buying.
Historically, investors have purchased stocks and bonds, but real estate can also be an investment option. In addition to traditional home purchases, investors can buy vacation-related properties and commercial buildings. Depending on the market, a vacation-related property may be wise, as they have a low vacancy and high occupancy rates.
Conclusion
Millennials are still behind their older counterparts in building long-term wealth. Their financial challenges include high student loan debt, high taxes, and rising costs. In addition, they face various other issues that are taking a toll on their savings.
Despite these problems, millennials still have an opportunity to build wealth. In the past five years, millennial stock ownership has risen incrementally. But with an increasingly uncertain market, millennials may need to be more confident in their investment decisions.
