A Millennial’s Guide to Investing

Many people in their twenties frequently overlook the importance of financial planning but ignoring this can lead to financial worries later in life. While creating a financial plan can look like hard work at the outset, you could create future financial confidence by considering a few simple steps.

This year, whether you have £10 in your account or £10,000, make it one of your objectives for 2019 to approach your finances with a different mindset, take stock and make some changes that could benefit you in the future.

Financial planning is about considering your future and then utilising the tools available to help you navigate it with confidence. Investing is one of those key tools.

Understanding risk

All investment comes with risk. Understanding that risk and knowing how much you can afford to invest – or lose – as well as having the time available to grow your money and recoup your losses when they occur, is the key to success. This means that if you have plans for your cash in the short term ( for a house, holiday or a new car as examples) then you shouldn’t invest it.

Similarly, it’s a good idea to have a ‘rainy day’ fund set aside in case of any unexpected expenses, so you’re not tempted to dip into your investment before the time is right.

You don’t need to have pots of readily-available money lying around before you start investing, in fact, you can get started with relatively small amounts. Assess your current income next to your monthly outgoings and see how much you can set aside – it only takes a small sum each month to build up a long term investment pot. Discover our simple and effective guide to start saving here.

Once you know you can afford to invest, you should start right away – the sooner you start, the longer you can invest for and allow your investment to grow. this will allow you to ride out any short-term investment volatility and dips in value. Even if it loses all of its value, your lifestyle doesn’t suffer as you have your rainy-day fund and you will still have time on your side to replace it.

What to invest in?

The first rule of thumb for new investors is that if it sounds too good to be true, then it probably is, and so, ‘get-rich-quick’ schemes are best avoided. Other than those, you can invest in a variety of different asset classes such as Equity, commodities, property or stocks and shares.

Whatever you decide, make sure you do your research and carefully assess how much risk you are willing to open yourself to – no two investments carry the same risk and no investments guarantee returns. If you’re unsure then it’s always a good idea to seek professional advice before leaping in.

Every person’s financial situation is completely different, but by starting to consider your options sooner rather than later, you will be able to your money work harder now for your future ahead.

To find out more about financial planning, visit our Financial Toolkit for Millennials series.


The content contained in this blog represents the opinions of Equilibrium Asset Management and in no way constitutes a solicitation of investment advice. The information provided is based on our understanding of current rules and regulations, which may change. The impact of any tax changes will depend on individual circumstances. The value of your investments can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

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