Authentic returns don't guaran
English Public
Try the Investopedia Stock Simulator
New to investing? Learn how to trade in real time on our virtual stock simulator. Our platform helps teach you the right strategies for building and maintaining wealth.
Authentic returns don't guarantee future returns
For more info...
https://oclnn.com/finance/millennials-may-lose-up-to-3-3-million-if-they-miss-out-on-the-stock-market/
The job market has improved since the recession and rebounded since the pandemic. Still, millennials and everyone else face wage stagnation, thanks in part to a 20-year trend of decreasing labor market mobility. Labor market mobility started to stagnate in 2000, just as the oldest millennials entered the job market.5 When workers don’t move around, from both job to job and region to region, employers have more power when negotiating wages—a phenomenon called monopsony—which translates into employees getting paid less.
Unfortunately for young people whose careers coincided with this trend, it’s difficult to make up lost earnings from early, slow years. Add to this financial reality the record amount of debt (mainly from student loans) that this generation is carrying, and there is one reason for financial stress.
However, millennials have been working hard in the past decade. According to a 2021 quarterly report, Millennials live in the present. They focus on their immediate financial well-being by maintaining a budget setting up emergency funds. As a whole, they lead by the most significant margins on long-range financial goals.
Work and Income
The increasing wealth gap has meant that millennials start with less household income. So, their most popular personal finance priority is to have enough money for day-to-day living expenses. During the recession, some millennials postponed getting higher education or additional degrees due to a sluggish job market.
As the job market improved, many millennials chose the gig economy. When the pandemic hit and social distancing regulations were implemented, many millennials found their jobs went remote. And many millennials "flourished," and 74% of millennials didn't plan to return to the workplace five days a week, according to a 2020 Gallup poll.
Of course, some millennials struggle to land full-time positions and are making do with part-time positions, but overall, this group is earning more than other generations. According to the U. S. Census Bureau, the median income for a millennial household is $71,566.
Becoming Financially Independent
As many younger millennials and Generation Z, their younger siblings, do, living paycheck to paycheck doesn’t make financial independence easy. Gaining independence should be income-driven rather than frugality-fueled. While spending frivolously is never advisable, cutting back on your Starbucks intake isn’t going to make your fortune. Accumulating wealth requires broader, long-term thinking.
For instance, if you’re making $30,000 a year, it will be nearly impossible to amass a large sum of money—even if you were to save all of your extra pennies. For instance, broadening your earning capacity—via education or work experience—can help increase your worth and broaden your income horizons.
Getting Out of Debt
Paying off student loan debt has become increasingly difficult even for those with a job. While it’s natural to prioritize paying off debt as soon as possible, that may not be the best course. You need to have your money working for you, too.
One approach is to leverage what funds you have: Extend your college loan repayment period to lower your monthly payments, and use the extra cash to start building a retirement nest egg. In your 20s, you’re at the time when compound interest is most in your favor because you have decades for even small amounts of money to grow. It’s also a good time to take risks because if an investment does tank, then your portfolio has time to recover from losses.
Also, being in debt is not all bad. Particular sorts of installment debt—like student or auto loans—can be helpful. As long as you pay them in a timely and regular fashion, they help you establish a good credit history. You need a good history and credit score to obtain everything from a residential lease to a bank loan (and the most favorable interest rate possible for it). Not only is it OK to have the right kind of debt, but it can also make a lot of financial sense. Take a basic capital investment, such as a car. You could obtain a low-interest auto loan and pay it off in small, regular installments while more of your cash remains available to put toward something else.
Paying your monthly credit card bills on time is crucial to building your credit rating. Try to pay your bill in full at the end of each month to avoid racking up interest charges that can quickly snowball. Also, having several cards (but not owing anything close to your credit limit—charge no more than 35% of your limit on each card) will help your credit utilization ratio. This percentage is another important factor when being evaluated for a car loan or a mortgage.
The net worth gulf between the rich and the middle class has been at its highest level since 1941, as well.1011
Saving for a Big Purchase
Saving for big-ticket items, like a home of one's own, is another goal. Unfortunately, lenders are imposing stricter guidelines for significant types of financing, especially mortgages. Therefore, millennials may need to make a substantial down payment if they want to purchase a home. Most savings accounts do not provide a high yield on returns, which means you could lose money over time if the interest rates don't pace with inflation.
Savings accounts cause you to lose money over time because their low-interest rates do not keep pace with inflation. They're also subject to maintenance fees that can nibble away at your balance. It's not terrible to keep a small emergency fund in the bank—after all, it's still Federal Deposit Insurance Corp. (FDIC)-insured—but the bulk of savings should be elsewhere.
The Millennial Life View
Millennials often see their career trajectories and retirement differently from their parents and grandparents saw theirs. Frequently dubbed the “instant gratification generation,” they don’t want to work first for a big company and later try to do their own thing and enjoy life. They want to pursue ambitions now, whether going for a dream job right out of college, working for someone else’s promising startup, or creating a location-independent business. They want a job that allows an outstanding work/life balance while they’re young, so they don’t have to wait to travel, create their own nonprofit, or pursue hobbies. They may even be planning not to retire because they love their work.
New to investing? Learn how to trade in real time on our virtual stock simulator. Our platform helps teach you the right strategies for building and maintaining wealth.
Authentic returns don't guarantee future returns
For more info...
https://oclnn.com/finance/millennials-may-lose-up-to-3-3-million-if-they-miss-out-on-the-stock-market/
The job market has improved since the recession and rebounded since the pandemic. Still, millennials and everyone else face wage stagnation, thanks in part to a 20-year trend of decreasing labor market mobility. Labor market mobility started to stagnate in 2000, just as the oldest millennials entered the job market.5 When workers don’t move around, from both job to job and region to region, employers have more power when negotiating wages—a phenomenon called monopsony—which translates into employees getting paid less.
Unfortunately for young people whose careers coincided with this trend, it’s difficult to make up lost earnings from early, slow years. Add to this financial reality the record amount of debt (mainly from student loans) that this generation is carrying, and there is one reason for financial stress.
However, millennials have been working hard in the past decade. According to a 2021 quarterly report, Millennials live in the present. They focus on their immediate financial well-being by maintaining a budget setting up emergency funds. As a whole, they lead by the most significant margins on long-range financial goals.
Work and Income
The increasing wealth gap has meant that millennials start with less household income. So, their most popular personal finance priority is to have enough money for day-to-day living expenses. During the recession, some millennials postponed getting higher education or additional degrees due to a sluggish job market.
As the job market improved, many millennials chose the gig economy. When the pandemic hit and social distancing regulations were implemented, many millennials found their jobs went remote. And many millennials "flourished," and 74% of millennials didn't plan to return to the workplace five days a week, according to a 2020 Gallup poll.
Of course, some millennials struggle to land full-time positions and are making do with part-time positions, but overall, this group is earning more than other generations. According to the U. S. Census Bureau, the median income for a millennial household is $71,566.
Becoming Financially Independent
As many younger millennials and Generation Z, their younger siblings, do, living paycheck to paycheck doesn’t make financial independence easy. Gaining independence should be income-driven rather than frugality-fueled. While spending frivolously is never advisable, cutting back on your Starbucks intake isn’t going to make your fortune. Accumulating wealth requires broader, long-term thinking.
For instance, if you’re making $30,000 a year, it will be nearly impossible to amass a large sum of money—even if you were to save all of your extra pennies. For instance, broadening your earning capacity—via education or work experience—can help increase your worth and broaden your income horizons.
Getting Out of Debt
Paying off student loan debt has become increasingly difficult even for those with a job. While it’s natural to prioritize paying off debt as soon as possible, that may not be the best course. You need to have your money working for you, too.
One approach is to leverage what funds you have: Extend your college loan repayment period to lower your monthly payments, and use the extra cash to start building a retirement nest egg. In your 20s, you’re at the time when compound interest is most in your favor because you have decades for even small amounts of money to grow. It’s also a good time to take risks because if an investment does tank, then your portfolio has time to recover from losses.
Also, being in debt is not all bad. Particular sorts of installment debt—like student or auto loans—can be helpful. As long as you pay them in a timely and regular fashion, they help you establish a good credit history. You need a good history and credit score to obtain everything from a residential lease to a bank loan (and the most favorable interest rate possible for it). Not only is it OK to have the right kind of debt, but it can also make a lot of financial sense. Take a basic capital investment, such as a car. You could obtain a low-interest auto loan and pay it off in small, regular installments while more of your cash remains available to put toward something else.
Paying your monthly credit card bills on time is crucial to building your credit rating. Try to pay your bill in full at the end of each month to avoid racking up interest charges that can quickly snowball. Also, having several cards (but not owing anything close to your credit limit—charge no more than 35% of your limit on each card) will help your credit utilization ratio. This percentage is another important factor when being evaluated for a car loan or a mortgage.
The net worth gulf between the rich and the middle class has been at its highest level since 1941, as well.1011
Saving for a Big Purchase
Saving for big-ticket items, like a home of one's own, is another goal. Unfortunately, lenders are imposing stricter guidelines for significant types of financing, especially mortgages. Therefore, millennials may need to make a substantial down payment if they want to purchase a home. Most savings accounts do not provide a high yield on returns, which means you could lose money over time if the interest rates don't pace with inflation.
Savings accounts cause you to lose money over time because their low-interest rates do not keep pace with inflation. They're also subject to maintenance fees that can nibble away at your balance. It's not terrible to keep a small emergency fund in the bank—after all, it's still Federal Deposit Insurance Corp. (FDIC)-insured—but the bulk of savings should be elsewhere.
The Millennial Life View
Millennials often see their career trajectories and retirement differently from their parents and grandparents saw theirs. Frequently dubbed the “instant gratification generation,” they don’t want to work first for a big company and later try to do their own thing and enjoy life. They want to pursue ambitions now, whether going for a dream job right out of college, working for someone else’s promising startup, or creating a location-independent business. They want a job that allows an outstanding work/life balance while they’re young, so they don’t have to wait to travel, create their own nonprofit, or pursue hobbies. They may even be planning not to retire because they love their work.
by gerryshown
Vocabulary List
- 0
