3 Investment Tips for Millennials

 

 

Let’s be honest, investing isn’t always easy – at least it doesn’t always seem that way. With so many different options available on the market (from mutual funds to stocks), choosing the best strategy can be overwhelming. That’s where the assistance of a financial advisor comes into play.

 

It’s very easy to get caught up in hot tips, news headlines and guidance from family and friends. It seems like everywhere we look someone is giving millennials investment tips. The truth is finance is personal, and that’s why it’s so important to get tailored advice from a professional. With that being said, there are some pieces of advice that all young investors should know.

 

Here are three investment tips for millennials who want to start investing:

 

Start as early as possible

 

Yes, that’s right, young people should have started investing way before they were coined as millennials. As soon as you have an income (no matter how big or small) a portion of your paycheque should go into savings.

 

Thanks to a little thing called compound interest there are big benefits for millennials who start investing early. Compound interest helps your investments grow faster because your monthly earned interest (or dividends or capital gains) is reinvested back into your account. Therefore, the next month you earn interest on the previous month’s interest and so on for years to come. It’s brilliant.

 

Think long term with your strategy

 

According to Forbes, investing for the long term helps millennials see the bigger picture when it comes to risk versus reward in your portfolio. “Risk is kind of like that friend who regularly cancels plans but always comes through in a pinch. There might be heartache in the day-to-day, but in the long run, you’ll be glad you stuck it out.

In investing, more risk means the potential for more reward. Could you lose money and never collect that premium? Sure, but that’s unlikely when you’re in it for the long-term.”

 

Be honest with your financial advisor

 

Professional advice can help find an investment strategy that fits your individual plan, financial capabilities and life goals. However, that can only happen if you are completely honest with your advisor.

 

Think of a financial advisor as your financial doctor, they can’t totally assess the situation and provide a recommendation until they have all the information. This includes your short term and long-term goals, tolerance for risk, time horizon and general knowledge of the investing world.

 

If you have questions about investing or want to start investing but don’t know where to begin, I’m happy to help. Let’s chat about your goals and investment options for millennials.

 

*This content was originally created by Manulife Securities for information purposes only. It has been distributed for advisor publication.*

Why You Shouldn't Forget About Your RRSP?

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The deadline to contribute to your Registered Retirement Savings Plan for the 2015 tax year is quickly approaching – it’s Monday February 29, 2016. 

 

Investing in an RRSP is a valuable financial planning tool that helps you save for retirement as well as receive tax deduction benefits for your contributions.  Even with all those benefits it’s sad to say that sometimes the priority of saving in your RRSP gets left behind.

Nowadays people have more immediate goals they want to reach and therefore saving for retirement takes a back seat on the list of priorities.  But it shouldn’t. If you’re still deciding whether to invest in your RRSP here are some benefits to consider that may help make your decision:

Do you want to retire someday?

 

If the answer is yes – and I’m pretty sure it is for almost everyone – then you need to save in order to do it.  Unfortunately government and employer benefits may not be enough income to sustain your lifestyle in retirement.  Therefore you need to set aside a part of your monthly budget and start investing for your retirement.

 

Think about saving for the long term

 

If you’re in your 20s, 30s or 40s your retirement may seem far away, but the sooner you start saving the less of a financial impact it will have on your current budget.  Why?  Because the longer timeframe you have to save the less money you need to contribute on a monthly basis. 

 

You can see with this retirement calculator that saving $100 per month from the age of 25 until 65 the amount adds up to $72,964.  If you started saving at 40 years old with the same monthly contribution the total adds up to a much lower amount at $37,669.  Save yourself some money and start saving sooner.

 

You can have more than one goal

 

No one says that you can only have one goal at a time.  Working towards multiple goals helps achieve multiple dreams and hopefully saving for retirement is one of them.  It’s definitely possible to save for multiple goals at one time, the key is to set priorities and decide where your money goes. 

 

If you want to take a dream vacation in five years and you’re going to retire in 20 years then your financial priority will be the once in a lifetime vacation because it’s in the near future.  However that doesn’t mean your RRSP gets neglected, it just means that you don’t need to save as much since you have a longer time horizon.

 

Let’s talk and get started achieving your goals

 

As a Financial Advisor I can help.  If you want to discuss your financial goals and learn how to set savings priorities contact me today and let’s chat.   I’m happy to help set a budget, delegate savings and work together to help achieve all your goals – including planning a happy retirement.

 

For more tips or to ask questions, please contact your Cornwall Wealth Management Advisor.

 

This post originally appeared on Mark Mulholland’s blog