Millennial Wealth: Small Steps Can Go a Long Way

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millennial wealth - Millennial Wealth: Small Steps Can Go a Long Way

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Millenial wealth can be a sensitive subject. Last week, MarketWatch tweeted out an article offering readers some retirement advice.

…And the Internet lost its mind. “I think you meant to say, by 35 you should have debt twice your salary,” one Twitter user replied.

The article itself had much more nuance that the reaction on Twitter suggested — as it usually the case with such things. Still, reading it, we thought it might offer a nice segue into a much-needed discussion into millennial wealth. The headlines tend to skew to extremes, leaving many members of the up-and-coming generation not just unsure of how they stand, but unsure of how they should stand.

Here’s a sample of recent new pieces on millennial wealth:

  • “Because of fewer assets and more debt, millennial households had an average net worth of about $90,000 in 2016 versus $130,000 for Generation X households in 2001,” the Louis Federal Reserve wrote.
  • “The 1980s cohort is at the greatest risk of becoming a ‘lost’ generation for wealth accumulation,” it wrote in another report.
  • A GoBankingRates survey found that almost half of younger millennials had absolutely nothing in their savings accounts.
  • And while Forbes thinks millennials are actually quite good at savings, it added that they are investing those savings too conservatively.

No matter how you slice it, one thing seems pretty certain: that Great Recession has left one gnarly hangover.

But when it comes to millennial investments, there really is no need to panic. While the milestones like having twice your salary saved may be stressful because they seem far off, they’re achieved by what are really small, manageable steps.

Millenial Wealth Is Built With Small, Manageable Steps

If you’re in a place to start investing, start simple.

Millennial wealth is built slowly and accumulates with straightforward investments — like buying the market! The S&P 500 averages double-digit gains. The earlier you start, the more those will compound.

On top of that, though, the perk of being young is that your time horizon is long and you have time to take more risks. That doesn’t mean day-trading Tesla Inc (NASDAQ:TSLA) necessarily. It means picking smart, strategic sectors that offer a bit more risk and thus a bit more upside.

But if you’re not in a place where investing is an option, that’s not only okay — it’s completely understandable given societal trends.

It’s no secret that millennial wealth has been strangled a bit by student debt and stagnant wages, among other factors. If you’re not swimming in savings and stock market returns, don’t beat yourself up. This isn’t some column suggesting that if you’d just cut out your morning coffee, everything would be just fine.

Instead, acknowledge the headwinds, but do what you can to better your position your sails for the future. If you can do that while making fun of tweets that seem a bit ridiculous, great! But if you can’t mock MarketWatch and also take small steps to better position your portfolio, I’d opt for the latter.

As of this writing, Robert Martin did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2018/05/millennial-wealth-small-steps-can-go-a-long-way/.

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