CNBC released an article earlier this year bemoaning the millennials’ financial woes. The news outlet pointed out that older generations peg this age group wrong. Millennials are hesitant to make crucial life changes because they are struggling with their crippling student debt.
This article is written by a millennial for the millennial. It will help you stand on your financial feet. But be warned that results vary. There is no one-size-fits-all solution, so you need to do your research too. Let us now tackle the world of investments.
Real Estate
It does not seem the right time to make such a huge investment. After all, the government just financially intervened to keep individual households afloat.
Contrary to belief, it is an excellent time to invest in real estate. Bloomberg reported that mortgage rates have again gone down, so you should capitalize on this trend. But before anything else, you need to research.
If done right, this investment will pay for the mortgage that you have taken against it. You need to make more improvements for this asset to generate passive income. Before you make any purchase, you need to reach out to a real estate attorney. They will help you with these issues:
- Commercial real estate contracts
- Zoning laws
- Land use agreements
- Site development contracts
Before you proceed with the purchase, they will iron out any hiccups. Their services will allow the process to go smooth sailing. You will not regret reaching out to them.
Emergency Funds
If you are still studying right now, investing in real estate might not be your thing. You might want to save more money to recover from last year’s debacle. In this case, you should check if you are qualified for tuition fee refunds.
With the funds plus the government financial aid, you can establish your emergency funds. It might not be as grand as real estate. But it is still an investment.
If you are still setting it up, you should establish enough funds to cover 3-6 months’ worth of living expenses. You can put it in a regular bank account. Doing this will guarantee that you can easily access your money.
The downside of putting your emergency funds in a regular bank account is that the interest rate is low. But remember that your goal here is to establish a reserve for rainy days. This investment will cover any unexpected expenses. But remind yourself that these unforeseen expenditure does not include cute items that you happen to see while strolling in the mall.
Cryptocurrency
In recent years, we have seen the rise of cryptocurrency. This medium of exchange is risky as there is no government to back it up. But it can be highly profitable.
Its rates swing widely. As CNBC reported, bitcoin is now at $50,000 per token. This price might be too high for many people. In this case, you can try other cryptocurrencies.
Some cryptocurrencies have no market value yet. In this case, you might not even need to put up money to have your share of their token. Pi, a cryptocurrency developed by Stanford alumni, is still allowing its users to gather as many tokens as they can.
We cannot emphasize enough that this investment is quite risky. If possible, you should try those cryptocurrencies that allow you to collect their tokens without involving money.
Time Deposit
Let us go back to traditional investment options. If you are looking for a medium-term solution, then you should opt for a time deposit. In this system, you can only withdraw the money after the maturity date. You will be penalized for taking your funds before the agreed time.
Banks offer a marginally higher interest rate than a regular bank account. Some financial institutions allow you to set up a time deposit that lasts for only one month.
You are better off just putting your money in your emergency funds than putting it in this type of time deposit. If there is a difference in the interest rate between the regular bank account and the certificate of deposit, it is usually negligible enough for you not to bother with it.
Berkeley released a study saying that millennials are more educated than older generations. They are more willing to take that risk to get a better future for themselves. With that said, you are likely willing to invest more to financially establish yourself.
Such foresight should be applauded. Even with the crippling student debt, you will still reach your goal. All you need is to believe in yourself.