Young and empowered: The rise of money smart Millennials

Millennials are in the best position to start investing. Given their age (mostly in the range between 18 and 36 years old), they have a wide investment horizon to build their portfolio and enjoy a comfortable retirement.

In most markets, and most especially in the developing world, millennials comprise the majority of the working population. They are those born in the 80s and 90s, largely considered the transition generation between the post-war industrial age and the digital information age. They are filling up companies and will soon be at the helm of most economies.

Despite being highly productive and ambitious, many young workers are still not saving up for retirement or are doing it the wrong way. They mostly focus on building a handsome career and capitalizing on the YOLO (you only live once) culture to ‘enrich’ their lives. In a way, millennials are the newbies of the financial world, so topics such as investing and retirement plans might just fly over their heads. However, with an early start and some encouragement, there is a real possibility of these young achievers becoming millionaires before they know it.


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Democratizing investments

Most people, not just millennials, think that investing is something that only the wealthy can do, thinking that it requires an immense amount of money. That is one of the biggest myths in the investing world. Especially these days when investment options have gone so diverse, a person does not need a lot of money in order to start investing. There are a lot of ways to invest, and most of them are budget-friendly. What matters more is consistency, discipline, and the length of time one can stay invested.

One crucial step to financial freedom is knowing why one needs to invest in the first place. It could be for a new house or for retirement; the goal must be clear.  Furthermore, one needs to determine how long they think it will take them to reach that goal.  Those two points will help the person land possible potential investments.


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The power of compound interest

In investing, time is one’s best friend (or worst enemy). The earlier a person starts to invest, the more room they can work with when it comes to playing around with stocks, bonds, and other tradable securities. It also allows them more time to recover in case of poor investment decisions. In short, time helps them grow their investments strategically and effectively. This reflects in the concept known as ‘compound interest,’ which suggests that money one initially invests will grow over time, but so will the money he or she makes in the meantime. The longer the capital has to work to generate returns, the more money one will have upon reaching his or her target date, such as retirement or when he or she already plans to buy a property.


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Millennials must think about their financial future as early as now. This will help them avoid the mistakes of the older generations and make financial independence a much more achievable reality. There are plenty of investing opportunities out there and modern tools such as the Internet provide a generous amount of information on how they can get started.