Millennials have it tough, financially speaking. The job market is unforgiving, student debt is at an all-time high, and the aftermath of the Great Recession is still fresh in their minds. Seeing their parents and grandparents suffer from the recent economic downturn has scared away many millennials from investing altogether – but it shouldn’t.
These six tried-and-true pieces of advice will take the fear out of investing and put you on the path to financial success later in life…
1. Start as early as possible.
The most common mistake young people make is waiting too long to start investing. You may think that you don’t yet earn enough money to make a significant impact, but you are wrong. The amount of capital you start with is not nearly as important as when you start. Because of factors such as compound interest, every year you push off investing can really hurt you in the long run.
2. Set up automatic deposits.
When it comes to investing, consistency is key. The easiest way to stay consistent with your portfolio is by scheduling automatic deposits into your savings, retirement, and investment accounts. Doing this will ensure your funds are safely secured before you have a chance to spend them on something else.
3. Maximize your match.
401(k) plans are company-sponsored retirement plans which are funded through pre-tax deductions from your paycheck. Many employers even offer a matching program, in which they will contribute on your behalf up to a certain percentage of your salary. Make sure you are contributing enough money to qualify for the maximum match amount; anything less is basically giving away free money.
4. Pay off your high-interest debts.
It’s impossible to save money when you are drowning in debt. That’s why your first priority should be paying off all of your outstanding balances. If you have multiple debt accounts, make the minimum payment on all of your bills, and put any extra money towards the debt with the highest interest rate. This strategy will allow you to pay off your debts as quickly and efficiently as possible.
5. Diversify your portfolio.
Don’t put all of your eggs in one basket. Diversification is a core investment strategy used to mitigate risk by spreading your money across multiple investments. If you experience a significant loss in one of your accounts, your entire portfolio will not suffer as a result.
6. Consult with a financial advisor at American Investment Planners, LLC.
Just because it’s called “personal finance”, it doesn’t mean you have to do it by yourself. Consulting with a professional advisor at American Investment Planners now can put you on the path to financial success later in life.
The financial advisors at American Investment Planners, LLC have decades of experience helping people of all ages plan for life’s biggest moments. Let us help you. To schedule an appointment with one of our consultants, please call (516) 932-5130 or email info@americaninvestmentplanners.com.
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