Young and Broke? Top Facts to Know about Money
Being broke is relative. What one may hold in high esteem as being a lot of money, may simply be pocket change to another. Our lifestyles get to influence just how we perceive money flow and the role it plays in our daily lives.
The young have a pretty good understanding of just how the tech world functions. However, most are simply users of various online platforms; few are real influencers of the masses and developers of awe-inspiring technology.
Millennials’ goals are often short-term ones that involve the spending of money. Fun events, weddings, trips, fashion accessories, and culinary engagements are sure-fire ways to capture the imaginations of most young people.
However, all these things require a certain degree of cash flow in order for these activities to occur. When wrongly done, they can find themselves in a massive debt. Over time, the future may become much bleaker and retirement saving may be the only saving grace.
The Blank Slate
Experts advice that the young should learn to operate and treat their affairs on a blank slate. The movies show us impressive takes on how young investors are able to take up stocks in the market by storm and end up as super rich.
The real-life situation is that the young need to make small bit-wise investments that are sure to project growth. Regular investments, in the long run, may prove the difference in achieving a semblance of financial security.
For those who opt to go the stocks route, it’s not necessary to put all of our money into the stock market. The best bet would be to start small. Doing so ensures that there is a reduction in risk levels and there is less stress involved since one does not necessarily need to time the market.
Once one is able to amass wealth, never invest more than 2% of the wealth in one area. This ensures that we are able to create safeguards against possible downfall.
The young have an edge over the older folks who are constantly battling with time constraints. That’s not to say that the older generation doesn’t have the same opportunities that the young do, not at all.
Assuming that markets grow at an average rate of 10% per annum, a small $100 investment every year for about 20 years would yield returns of up to $7,000 once compound interest gets factored in.
Bearing this in mind, making greater investments (with respect to our pocket situation) is a sure fire way to yield greater returns. The trick lies in starting right now. Once saving becomes a trait, we can get to inculcate other millennials into our practices and enjoy the benefits as one.
A good place to start would be to download apps like Stash, which avail us with a plethora of investment options that offer compound interest. The young are naturally well-versed with the internet and technology, thus, this shouldn’t really be a bad place to start.
There’s always the temptation to save by cutting down on expenditure. Whilst this can have great benefits for the young in the short term, it’s not the most effective strategy going forward.
To make money, the young need to come up with a list of possible business investments they would feel comfortable making. The next step would be to look for the funds by seeking employment and starting businesses that can support the intended saving plans.
Beware of the Competition
The best way to enter into the business world is to choose wisely. This involves conducting a proper assessment of option at our disposal. Seeking monopolies would make much more sense in terms of perks, education and profit margins. Getting into businesses with cutthroat competition may stifle our earnings and growth projections. As a young person, thriving in monopolies can go a long way in ensuring a financially-secure future.
In contemporary times, the internet is awash with numerous sources of information and motivational stories where we can seek inspiration. Whether its articles, books, magazines or documentaries, reading widely can ensure that we are able to think on our feet.
Creativity and innovation is usually at the heart of most success stories among those who managed to achieve financial independence. We all want to retire in our 30s and 40s, making the right investment choices can go a long way to ensuring that.
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