Investing Basics: 9 Investment Options Every Millennial Should Consider

Guest Post

If you were born between the year 1981 to 1996, you are considered a Millennial, and to be honest, life hasn’t been easy for you since you saw the most significant recession back in 2008 and went through a global pandemic that caused a crash in the financial markets – by Shiv Nanda, Financial Analyst, MoneyTap

 
While these factors are scary, what’s more frightening is not investing your money anywhere and becoming a part of the rising inflation.
 

Why do millennials need to invest

 
To achieve financial freedom in the long term investing your money becomes essential. In addition to this, investing can also help you get rid of your debt trap.

Since there are multiple millennial investment trends, people often get confused while choosing the right option. Hence to make it easier, we’ve combined the best investment options for millennials. Let’s take a look.
 

Short-Term Options

Treasuries

 
Everyone knows that the United States government always pays off its debts. Hence the United States treasury bonds are the safest source of investment for the people looking for a source for passive income without any risks.

Treasury bonds won’t make you rich because of the lower interest rates; however, investing in these is an excellent option for someone expecting a good return in a short period. Treasury bonds payout in a minimum of one month and goes as far as 30 years.
 

Other Bonds

 
If the United States Treasury Bonds are a boring option for you, don’t worry because many other bonds offer better interest rates. You can choose from bonds that come from overseas governments, and along with this, you can also choose from corporate bonds for better returns.

However, a better interest rate often comes with higher risk, so it is recommended that you keep this in mind before you start investing.
 

Broad Market Index Funds

 
If you are expecting your returns within the first five years, then many people would say that investing in the stock market wouldn’t be the right thing because there are chances that it might take a sharp dip when you are planning to withdraw your funds.

However, data shows that many investors had made money in the short term with less risk when they invested in the S&P 500, so it can be an excellent investment. Hence, if you decide to invest with Broad Market Index Funds, we’d recommend you put your money in mutual funds that invest in multiple companies without risking your money in volatile stocks.
 

Peer-to-Peer Lending

 
Multiple platforms available on the web allow you to lend money to someone who needs money to pay off a debt. The people who use these platforms choose to avoid bank loans, and instead of that, they look out for investors who can lend them money.

This method can easily give you higher returns than most banks and bonds, and hence it’s a great investment source if you are looking for some passive income.
 

Long Term Options

Individual Stocks

 
Investing in Stocks can be one of the best investments you can make when you plan to gain money in the long term. Stocks perform based on how well business functions, and hence the returns you get are based on the company you’ve invested in.

Stocks like Tesla, Netflix, and Apple have seen significant growth in the last ten years, and hence choosing the right companies becomes essential when you invest in Individual Stocks.
 

Growth Mutual Funds

 
If you want to skip the research that comes with choosing the right stock, then choosing the path of growth mutual funds can work for you. You can invest in mutual funds that consist of growth or blue-chip companies so they can get assured returns in a higher timeframe.

A perfect Mutual Fund can provide you upto 10% of returns annually making, and hence it can be seen as a great source of some passive income.
 

Exchange-Traded Funds (ETFs)

 
ETFs are a type of fund that trades throughout the day like a stock and holds a basket of securities. Over the past few years, ETFs have been growing among the Millenials since the investment value they require is comparatively lower than some of the mutual funds.
 

Target-Date Funds

 
Target-Date Funds aren’t as popular as the other investment options that we’ve seen; however, investing in these funds becomes essential when you want to plan your retirement.

Target Date Funds work based on a specific year that you choose. For Example, if you plan to retire in 2035, your target-based fund will be designed accordingly and provide you returns based on the year you’ve chosen.
 

Additional Investment Options

NFT and Cryptocurrency

 
Cryptocurrency has been getting popular for the last few years. Even NFT investing matched the trend and started changing lives for many people. These are known to provide the highest number of returns in the market; however, the risk that comes with them is the same.
 
If you are investing in Crypto, it is recommended that you avoid pump and dump coins without any good fundamentals and invest in projects like Bitcoin and other Alts that are known to provide reasonable returns over time.
 
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Author Bio: Shiv Nanda is a financial analyst who currently lives in Bangalore (refusing to acknowledge the name change) and works with MoneyTap, India’s first app-based credit-line. Shiv is a true finance geek, and his friends love that. They always rely on him for advice on their investment choices, budgeting skills, personal financial matters and when they want to get a loan. He has made it his life’s mission to help and educate people on various financial topics, so email him your questions at shiv@freopay.com.