Monday, September 21, 2015

Hey Millennials, what are you doing with your money?

I've written before on personal finance and investing, and why you should have money invested as early as possible. Here's something you should read if you haven't on seeking employer matches and here's something else on timing of those investments. Yet despite all of this wisdom (and charts! I created charts!), I read over the weekend that only 26% of millennials invest. So almost three-fourths of our young people are not investing. (Here's the full article if you are interested). Three-fourths!

I know my blog posts won't change behavior overnight, but people are missing out in a huge way.

Now, I won't blame those that fall in the first category that this author brought up - lack of money. If you truly are struggling to find shelter and food, then investing likely is (and should be) one of the last things on your mind. But otherwise, put some money in the market. And do it soon. But do it right. Here's a couple of more tips to add on to that Forbes article:

  1. Spend more than 15 minutes on this - Even if you are only investing the same amount you would drop on a few lattes at Starbucks this month, it is still money, and you want it to grow and flourish, not wither. Set aside some time to figure out what you are doing.
  2. Read some Wikipedia or Motley Fool - Honestly, it doesn't matter what you read, but take some time to learn how the stock market works and how mutual funds work. If you can understand those two things, you'll understand better what you are buying.
  3. Then read some mutual fund overview material - What I basically look for is a mutual fund that has existed for ten or more years, and has averaged about ten percent or better return a year. That means one dollar today is $1.10 next year. Over time, that will add up. Most of your mutual funds will have a prospectus or other guide that will contain the detailed numbers.
  4. Look out for fees - When you're reading that prospectus, you may find a bunch of attorney's fees, accountants fees, etc. Your job is to look to minimize whatever fees they are charging, whether that means picking "no load" funds or switching investments.
  5. Contribute frequently - Automatic is best, but if you can't do that, find a way to invest every other Friday if that works for you. Finding a regular investment schedule helps you to plan.
This list is quick, but I am sure there's a bunch of other advice that I am sure people could use (the internet is full of it). What's your best advice to get people into investing?