6 Investing Tips for Millennials

We have researched various investing tips for millennials. A millennial is a person who was born between the early ‘80s and late ‘90s, and, chances are, if you are within this age bracket, you are not (yet) investing your money into the stock market. 79% of millennials, according to a Harris poll, are not engaging in any investments. The reasons for this lack of participation vary, but they are not what you’d expect. Only 13% surveyed said not investing was due to their school debt obligations.

The poll showed that 76% of millennial women said investing was too confusing, and 60% of this same demographic believe that the typical investor is an old white man. About 50% of millennial men agreed with this statement. Millennials have seen a lot of negative press about Wall Street, including the financial crash where investors lost tons of money. It’s freaked millennials out, and warned them against investing or even becoming informed about how to invest.

Before starting to invest, arm yourself with a lot of knowledge. Here are six investing tips for millennials.

Investing Tips for Millennials

Tip #1: Pay off Credit Card Debt

Unless you have perfect credit, you’re probably paying interest rates as high as 24% on credit card debt that you hold. If you are carrying a $500 balance on two cards with an interest rate of 18%, only paying the minimum required each money, this will end up being $2,900 over nineteen years.

Make sure you pay off what it is that you owe, or the interest that you are paying will destroy any interest made on investments. Pay the minimum on your lowest-interest cards and put your money into the card with the highest interest to pay it off. Then, go down the line until you’ve paid everything off.

Tip #2: Get Rid of Your Savings Account

Keeping an emergency fund is vital, of course, but your savings account isn’t doing a whole lot for you. Your interest rate is not high; generally, it is maybe .01 to .06 percent if you bank with a major bank. It’s not impressive enough to keep.

Tip #3: Take Risks

One of the best things about being a millennial is you’re young and can take risks. If it comes crashing down, hey, you’ll be fine. However, when you get older, you cannot bounce back and justifying a big risk is difficult, as you’re trying to save for retirement. You need that money. Big risks in stocks can make you a lot of money in dividends, which you will then keep investing to keep making more money. It’s the beauty of compounding.

Tip #4: Start Investing Already

38% of millennials incorrectly think, according to a survey, that you need at least a grand to start investing. You can actually start with just five dollars. You won’t make any money, but, as you can see, it’s not a huge risk to get going. Acorns is an app that can help. Acorns takes your spare change and deposits it into your investment account. Once you reach five dollars, Acorns invests it for you. The Stash app is similar, except you can choose the companies in which you invest.

Tip #5: Never Stop Learning

To start investing, start learning everything you can about it. Start with some sites that are full of investment info, and then download an app that has stock news. Create a watch-list so that you can see news related to your own investing.

Tip #6: Never Forget About Your 401(k)

If you work in a place that matches 401(k) contributions, you should absolutely participate. It’s free money! Employers usually match you for up to 6% of your gross pay. Your 401(k) portfolio is comprised of short- and long-term investments that will help you manage risk. This risk is adjusted the closer you get to retirement.

You have tons of investment options, but you should take away from our investing tips for millennials guide is the fact that you need to get started investing. Don’t let your money sit in the bank while inflation increases; make what you have work for you. Take risks now to get a high return on your investment, allowing you to retire later in life with security.