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There’s been plenty of ink spilled about how many things millennials are killing. Chain restaurants. Beer. Napkins. Cereal. Motorcycles. Bar soap. Diamonds. Department stores.

You name it, there’s a “millennials are killing it” article. Changing consumer tastes in younger generations (and a population burned by financial instability in their formative years) make millennials an easy target.

7 key investments every millennial will make (and how to make them work)

But the millennial population isn’t dumb. They’re still planning for their futures, even though they may or may not be as well-employed as their parents were.

Here are some of the key investments that every millennial will make:

1) 401(k)

Many millennials actually have a 401(k) plan, often through auto-enrollment at their workplace. That investment is usually a low contribution rate, and it’s put into a target-date fund.

That’s all right—and it’s definitely a good thing that 71 percent of eligible millennials are saving for their retirement with a 401(k), and starting at an earlier age—but it can be even better with a few tweaks.

Trying to up the savings rate to 15 percent eventually will help millennials grow their retirement investment to the point where they have a comfortable nest egg.

2) Socially-responsible stocks

Millennials care more about what their money is going towards. A lot more.

When it comes to investing, they’re slower to commit money than some older generations. But 43 percent of millennial investors say they’re more likely to invest according to their beliefs, as opposed to 33 percent of Gen X-ers and 25 percent of Baby Boomers.

Social responsibility doesn’t necessarily hurt returns, and can actually help. But a wise investor keeps an eye on both.

3) Cryptocurrency

This is where the divide between millennial men and women is significant.

Men are much more likely to take the risk of investing in cryptocurrency than women are. Bitcoin was surprisingly popular with millennial men looking to boost the returns for their retirement savings by taking on extra risk.

Crypto is still a very volatile market, and not all investment in this sector is wise.

Digging into the mechanics of how it works, then trying small amounts of the more popular and well-backed technologies may be the way to go. But it shouldn’t be a main pillar of investment strategy for anyone.

Stick to the fundamental truths.

4) Education

Millennials are generally well-educated.

They’ve often been through higher education, and some have gone on to even more. It’s worth noting that Millennials earn similar income and save similar amounts to previous generations.

Often the thing that has them upside-down is student debt, which in some ways can be considered an investment.

Of course, that means having stable employment that pays well in your field. Still, the average millennial has invested a lot of their money in education, and that’s definitely a kind of investing that can pay off.

5) Experiences and freedom

Millennials place a higher value on experiences over things than other previous generations do.

This is something that’s not necessarily a traditional “investment”, but millennials place a much higher premium on the flexibility to do what they want to do, with many even being willing to take a pay cut.

There’s wisdom in this, but it should be tempered with an understanding of financial responsibility. Most millennials are following experiences as part of living a more balanced life than their forebears, which is an investment in oneself (the same as education).

That may pay dividends in intangible ways down the road.

6) Homes

Millennials aren’t buying starter homes the same way that they used to, but they are buying homes. They’re just waiting longer to get them, turning to smaller homes, or buying lower-cost properties and fixing them up. 23 percent own homes already and 39 percent are expecting to buy one in the next five years.

Real estate is one of the most time-honored investments, and millennials are smart enough to know they should be investing in it if they can. Fixing up a home is a great way to get maximum return on minimum investment, and they’re capitalizing on it.

Buying a home in an area where the property values haven’t inflated out of control yet is a great way to prepare for the future.

7) Index mutual funds

Millennials tend to avoid over-complicated financial instruments. That makes them prime targets for index mutual funds and other no-fuss, no-frills, low-risk investments.

These are great as a baseline, but some millennials should think about taking on a little more calculated risk to boost their long-term returns. Index funds are nice but won’t provide the same kind of money for the future as more aggressive funds or individual stocks.

Millennials aren’t sitting on their hands and not investing—they’re just putting their money in different things than previous generations did.

These investments are key to every millennial’s future health, happiness and success.


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