Millennials – three ways to get the edge in today’s market

Millennials – three ways to get the edge in today’s market

Many of today’s millionaires were busy learning how to create wealth at an early age. Being young meant they had ample time to make their money grow. Most millennials are saving in record numbers, but few are actively investing. Building your financial literacy, including getting a good advisor on your team, will build your knowledge and confidence.

As a millennial, your age gives you the edge. Take advantage of it in these three ways.

Stop living paycheque to paycheque
You need money to create money. This means a good budget and discipline about your savings. Compounding, where interest is credited both to the principal amount and the interest already accumulated, means you get interest on your interest. Learn which savings vehicles offer more frequent compounding, which increases the amount of interest your savings will earn.

If you’re serious about becoming a mature millionaire, you must get strict about saving cash. This isn’t about never having fun; a good budget includes a reasonable entertainment allowance, or you will not follow it. It’s about foregoing frivolous fun in order to hit your goal of building wealth.

Consider what you could accomplish in just a year’s time.

Build your financial literacy
Getting into the market is crucial to building your wealth. Just by investing $50 a month, you are in the game. Start exploring opportunities. You can handle an aggressive approach because the smaller mistakes you make today won’t ruin you financially forever.

When pursuing market opportunities, anything you learn from a news feed is already well known. The market has already responded, lowering your opportunity. Make calculated decisions based on a sound logic around what you are acquiring, the potential return, and how much you can lose if you are wrong.

Don’t get attached to investments. Be ready to let them go for a greater opportunity.

Learn about diversification—utilizing a variety of financial instruments such as broad-based, stock mutual funds, to hedge against volatility and mitigate risks. Different investing types will react differently to changes in the market.

Time is on your side
The younger you start, the longer you have for saving money and seeing your investments grow.

Go for the long term. Avoid the impulse to pull an investment when the market performs poorly, because riding out temporary market downswings is a common experience of a good investor.

Let time build your wealth for you. If you’re unsure about your next step, give us a call.

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