You are working hard, trying to get ahead, and build a life for yourself. Now that your side gig is taking off, it is time to consider your investment options. Let’s look at some investment principles that have been proven to help other millennials make the most of their extra income.
Use your time wisely
Many of us shy away from investing because we are afraid of doing something stupid and losing our money. While any investment does carry some risk, keeping your savings in your drawer will diminish the value of your earnings over time because of inflation. Even the most conservative investment will result in a nice chunk of change in the long run.
Balance risk and reward
The Financial Industry Regulatory Authority (FINRA) describes risk as “any uncertainty with respect to your investments that has the potential to negatively affect your financial welfare.”
Conservative investors opt for a lower rate of return in exchange for a very low chance that their investment funds will decrease in value. This approach is popular among people who need to have access to their funds sooner rather than later. Investors who do not intend to access their funds for many years, such as millennials, may be more willing to accept a greater risk in exchange for a higher rate of return, because an investment vehicle could experience ups and downs over time and still deliver a good rate of return in the long run. In either case, there are no real guarantees. If you are in it for the long run, a higher rate of return, compounded over time, could add up to a very large sum.
Do your research
There is no shortage of investment advice out there. When you are trying to determine which type of investment is best for you, be sure to find multiple reliable sources that echo the same sentiments before you accept it as truth.
Some of the investment tips you will see repeated include:
- Diversify your portfolio
- The sooner you begin investing, the greater your returns will be
- Reinvesting builds momentum
Mercer Savings Bank
The staff at Mercer Savings Bank recommends that you invest early and often. Our bankers are available to discuss the investment options we offer. As a mutual bank, Mercer Savings Bank strives to meet the needs of the communities it serves. We’ve been your trusted community bank for more than 125 years. Stop by or contact one of our convenient locations today. We’re here to help.