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.*

Helping your kids increase their financial literacy

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“Since I graduated from high school, not one person has asked me to find the value of X.”

We hear this comment all the time, and it’s generally meant as a joke, but it echoes what many think about our education system – that it’s a bit heavy on things that aren’t “real life” important, and light on things that are.

Take the subject of financial literacy, for example. It’s one that hasn’t received the attention many think it should. Topics that become vital in adult life – like the use of credit, or the importance of saving – are ones many students receive little guidance on in high school, until they’re forced to learn about them the hard way - through experience.

Fortunately, we’re seeing some provinces take action to improve this. For instance, Ontario is rolling out a pilot project to introduce a financial literacy course in 28 high schools, with hopes that a full course will be available provincewide in September 2018. Most other provinces are also making efforts to improve children’s know-how in this area.

But in the meantime, there are plenty of ways you can help your children become more financially literate – no matter how old they are. Here are a few links with great ideas on how to introduce your children to good financial habits

Canadian Living published this piece on the dos and don’ts of teaching kids about money:

http://www.canadianliving.com/life-and-relationships/money-and-career/article/the-dos-and-don-ts-of-teaching-your-kids-about-money

Here’s a great online resource created by the Manitoba Securities Commission, called “Make It Count.” It’s got a few activities and tips that help kids incorporate money management into their daily routines.

http://www.makeitcountonline.ca/msc/parents/

Finally, this page on the Investor Education Fund’s website is devoted to financial education when raising a family. There are some resources on this page with content related to teaching teenagers about financial literacy.

http://www.getsmarteraboutmoney.ca/en/life-events/raising-a-family/Pages/default.aspx#.WNk5_m_ytpg

 

Helping your kids learn these concepts when they’re still kids can pay significant dividends down the road. If you have any questions about any of the tips or techniques in these links, please get in touch with me any time.