July
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Essential Investing Moves for Millennials
Research appears to show that Millennials are saving more towards their retirements than any other generation. The problem is where they are saving it. Almost 70% of them leave it in a normal savings account and with interest rates being so low, that is not the wise thing to do. Even worse are the ones that are actually stashing their cash. In real terms that money will devalue and they will end up worse off than they expected. There are ways of investing money that will give a much better return, and these are just a few suggestions of ways that mean they could be better off at retirement age.
Learn About Investing
The first thing they should be doing is gathering information about the different forms of investment. There are ample resources online and in the libraries to do this without laying out any money. It’s a form of free education that could help them to get a better return.
Investments often have risks attached to them and they can learn about the low and high risks, and decide which is best for them. High risks are usually better made as long-term investments. Generally, it can be assumed that the higher the risk, the higher the return will be, but that is not always the case.
Stocks And Shares
Each share is a tiny fraction of a company. Owning one share means that a tiny part of that company is owned. Shares can be bought as an individual, or as part of a fund, which is where a group of people is buying shares together. A fund will have a manager and investors do not have to decide which shares are bought and sold, just give them their money. A direct shareholder has voting rights on some company decisions. That right is lost when investments are made through a fund.
Whether stocks and shares are being bought by an individual or through a fund, they work the same way when it comes to making a profit. The shares are purchased through the London Stock Exchange or the Alternative Investments Market.
There is then the chance of them making some extra cash for investors in two ways. If the value of the company invested in grows, so does the value of the shares. Knowing when to buy and sell them is an art, but one that Millennials will be able to learn quite quickly. If they are unsure, there are many stockbrokers that will help, and often banks have facilities to assist as well.
The second way money can be made is when a company issues a dividend. This relies on the company making a profit, and then some of that is shared out among the shareholders. The more shares owned, the higher the dividend will be. Profits on shares is taxable and has to be declared to the Inland Revenue.
Over time, some people build a large portfolio of stocks and shares and this is often achieved by diversifying into shares in different trades and different sized companies.
Oil Futures Trading
Oil futures trading is known to investor’s worldwide, crude oil being one of the better commodities to deal in. The price can vary from day to day and this form of investment presents many opportunities to make big money for oil futures traders. Crude oil, the main producers being Russia, America and Saudi Arabia, is used to make petrol, heating oil, jet fuel and many other petrochemicals. The price can be changed by the demand for any of these, the highest prices usually being produced in the summer months.
Oil futures trading can be lucrative but it is important that they are researched well before any money is spent. Potential investors need to understand how the supply and demand can affect the price if they are to be successful at making money from crude oil.
Pensions
More jobs than ever now come with a pension as part of the employment package, but for those who are not in this position, they should consider investing in a personal pension. The rules are different to that of the state pension, which now is not paid until the pensioner reach 67, and that age is likely to increase even more. With a private pension, the benefits from 60, and that are a big attraction for many investors.
The secret with personal pension plans is to start saving in them early, not to wait until the 50’s have been reached. When some money is invested each month that makes more money. At the end of year one, there is the original investment plus the profits making money in year two. In year three, there is two years profits plus contributions, and so it goes on. A pension started when someone is 20 will still be making money on those first years profits when they reach 60, which is why starting a personal pension plan early is the right thing to do.
Watch The Fees
Any business that helps someone to invest, and it does not matter what type of investing they are doing, will charge fees for assisting them. These can vary greatly and if care is not taken, can eat into the profits that have been made.
The company that charges the highest is not necessarily the best. For instance, with a personal pension plan the charges can vary from .25% to 1.5% of the fund every year. The more the fund grows, the bigger the difference between the two gets, and taking the fees into consideration is part of successful investing.
Make It Grow!!!!
Money sitting in a standard savings account, or hidden under a bed, will not achieve its full potential. Millennials could make much better use of it, and ensure that it grows to provide them with a financially secure retirement.
Investing across a broad range of different things can be the answer. This reduces the risks while maximising the profits. In fact, some people are so successful at their investing endeavours, that it becomes their full-time occupation.