Some of the most common questions I receive these days from my friends :
How can I invest my money?
What should I invest in?
Where should I do it?
While I'm the thrilled that my peers are eager and willing to invest, it has occurred to me that the resources they need are simply not there. These are young professionals, successful millennials who are eager to invest, but simply don't know where to start. I've been investing on my own for years on my own (and not to mention, I work in the industry), and it has occurred to me that what seems so simple and matter-of-fact for me, is actually quite complicated for anyone outside the realm of finance. So I've developed a series I call #MillennialsAndMoney to help you navigate the world of investing in this new age world.
The key words here are "New Age" investing. The content for this series is extremely important because the way millennials invest and find value is extremely different from the ways Wall Street has been accustomed to. We are living during a very peculiar time when technology no longer stands as an isolated sector. The tech revolution has infiltrated every aspect of our worlds from how we eat, to where we buy clothes, and now yes, how we invest.
Millennials as a demographic have far more available resources and opportunities to invest and way more access than previous generations.Yet ironically they are the least exposed to stocks. Why is that? There are several reasons, including thwarted ability due to massive amounts of student loan debt to reluctant willingness from the hungover fear of living through the 2008 financial crisis. The many other reasons are topics for another discussion.
In this series its important that we highlight tips and tools that will help the younger generation get comfortable and familiar with investing, in this new age of technology and access to information. And if any thing, the one very important note to highlight...
We are NOT the same investors as our parents.
Most millennials look at investing from a completely new perspective, so there's no real best practices that can be passed down from the previous generation. (And side note, but equally important: for many black and brown Americans, the simple truth is that investing is not something we've learned firsthand growing up at home. Many of us are experiencing first-generation wealth and this entire concept of investing is a brand new experience for us).
The point here is, the methods and tools for investing and managing wealth have changed quite dramatically over the last 15 years. And the new players in this game (millennials) will definitely invest differently.
Take my parents, for example. When they were my age 30 years ago and wanted to invest, they would likely:
Walk into a local bank branch and talk with a banker,
That banker then took their money (and a commission for himself) ,
He then rolls their money into a larger portfolio of community money, serviced by a portfolio manager
That portfolio manager invests everyone's money according to some generic mandate
And regardless of how that portfolio performs (even if you lose money), the managers will take a fee
There's absolutely no way this could possibly work for today's millennial investors. I mean, to start: when's the last time you've ACTUALLY been inside a bank?... I'll wait.
But seriously, we live in an age of unlimited access to information, literally at our fingertips, and we absolutely demand more for less. Some investing deal breakers for millennials :
Transparency and access. This is especially important when it comes to money. Blindly giving money to someone with no ability to monitor is not really our cup of tea.
WE. HATE. FEES. Amazon's free shipping has ruined us all. We will never pay for miscellaneous charges, ever again. And we definitely will not pay for mediocre performance. No chance. But seriously, our ability to access the same information as investment professionals with a simple Google search has made it very easy for us to demand more for less.
Is there an App, and is it cool to use and easy to understand? Simple enough. No explanation needed
Lifestyle integration. Millennials more and more are integrating who they are into every aspect of their lives. We care less about jobs, and more about passion and careers. We like work-life balance. We want to be authentic, all the time. So a cookie-cutter investment strategy based on age, income and assets may not work for us. We are socially conscious and would feel better investing in things we believed in.
With all of this in mind, I've developed a series of tools and tips to help you get started with new age investing. This series is catered for the millennial, with a broad array of investment options from how to trade your own stocks with your own accounts, to where to dump you money and let someone else do the work.
Up next: Future topics in the #MillennialsAndMoney Series:
What type of investor are you? (Passive or Aggressive)
Where to Get Started: comparison of Trading Apps and Investment Accounts
ETFs: Perfect for the Lazy investor
Follow the series. Engage with us, ask questions and let us know which topics interest you!