Why is investment significant for millennials?
If you are born between 1981 and 1996, you are a millennial. Millennials are highly ambitious and passionate about money and growth. At the same time, having bad spending habits and ‘living in the moment’ may not be good for your financial health.
Dreaming big is an inherent part of life, but it requires strategy and time for completion. Millennials have enough time to get things on the path and understand such an approach.
If you are a millennial and haven’t yet invested, in this article, we will give you some points on why it is essential to start investing as a millennial.
Changing the life of Millennials
Businesses are taking advantage of new advertising techniques like memes and short videos because they see how social media trends have changed in the last few years. These marketing trends are affecting millennials to buy products that are depreciating in nature.
Social media is not the only reason to start investing. There are many other obvious reasons why it is essential to start now.
Importance of building a Habit of Investing
1. Expensive Lifestyle
A few years back, it was an unnecessary luxury for the middle class to own a car or a house in the city of choice. Fast forward to the present, a car and a place in the town of choice is a need for most people belonging to the millennial generation. It is expensive to live a comfortable, safe, and secure life in today’s world.
That’s where investment plays a role to help in living a life of choice without stressing about inflation and expenses.
2. Lack of income source security
By analysing today’s economy, job security is a question mark for many organizations. It is necessary to secure your near future along with long-term financial objectives. You need to make strategic investments for a retirement plan, build an emergency fund, and have health insurance.
3. Achieve ambitious long-term objectives
Millennials are ambitious towards achieving their long-term objectives. Achieving such ambitious goals requires investing regularly in investment options that can generate high returns.
Starting with easy and hassle-free investment schemes with reasonable returns such as equity mutual funds. Manually increasing the SIP amount to reach goals faster can be better.
Before jumping to investment, analyze your risk tolerance and know your investment horizon. Also, you can start in an index fund that tracks the broader market and gives returns in line with the market.
It is always advisable to take the help of financial advisors.
4. Keep a health check
One can easily see the relationship between bad eating habits and their effects on finances and health. Junk food has become an inseparable part of our lives. Also, it is eating our hard money savings and potential investments too.
During covid, we all realized the importance of health insurance, especially for those who had lost their only family member. After analyzing your body type, eating habits, and family health history, getting health insurance is essential to keep your finances healthy. Insurance companies also offer consumers financial benefits and discounts on regular health care.
We can get prepared for what we cannot avoid, genetic disease or disease due to unavoidable pollution. Health insurance has a waiting period for various claims under different situations. Millennials must buy a health insurance policy before hospital bills eat their finances.
How to start investing?
By following a standard series of steps, a millennial can start their investing journey in any category of investment schemes.
Plan your finances by starting from analyzing your current situation, and framing where you want to be must be the first step of investing.
Financial goals can be either long-term, medium-term, or short-term. You can decide where you need to invest according to your time horizon.
Expected rate of returns:
Your financial goals will decide the required rate of returns and how much time you have to achieve such objectives.
The habit of investing takes care of funds, emergencies, and loved ones. In this real world, where everything is growing with unmatchable speed, investment is the only way to grow money.
Habits, dreams, and macro-economic changes are the significant reasons millennials need to start investing.
Millennials still have the luxury of time to use the power of compounding. Starting with a small investment can be significant in no time. So let’s get started with the first investment.
This blog is purely for educational purposes and not to be treated as personal advice. Mutual fund investments are subject to market risks, read all scheme-related documents carefully.