If the last few years have taught us anything, it’s the importance of being financially prepared
A little nest egg can go a long way when it comes to bailing us out of whatever rainy days may lie ahead. For Generation Rent, this is far easier said than done. But, there are still investment opportunities available that can positively impact your bank balance. Although half of 2022 might be behind us, there is still time to explore them.
What is Generation Rent?
Generation Rent is a term used to describe young adults between the ages of 18-40, who have been priced out of the housing market due to rising prices and stagnant wages. Many of these young people will never be able to buy a home and, instead, they will always have to pay a significant portion of their income on rent. Since Generation Rent cannot invest their money in the traditional real estate market, many are turning to other investment opportunities such as stocks, bonds, index funds, cryptocurrencies and even NFTs.
Is There Such a Thing as a ‘Safe Investment’?
While there may be no such thing as a ‘safe investment,’ investments do have varying degrees of risk and some are safer than others. If you’re looking to invest your money, you should be honest with yourself regarding your risk tolerance because, even though there is a lot to gain, there is also a lot to lose. Of course, even within various investment options, the risks may vary. For example, some stocks can swing wildly in price weekly, while other stocks will steadily climb throughout the year. When it comes to cryptocurrencies, the same thing applies and some coins, such as Ethereum, will be a relatively safe bet, as long as you’re willing to ride out the low points, while other coins are much more unstable. However, when it comes to investments, the higher the risk is, usually, the higher the reward will be too.
What Should I Invest In For The Next 5 Years?
If you’re beginning your journey into the world of investment, then it’s important to weigh your options and have faith in the fact that with a little research and some patience, you can greatly improve your financial situation within 5 years. The trick is learning how to make your money work for you. If you’re a new investor, you should seek out as much investment advice as possible. Ask your family and friends how they invest their money and don’t be afraid to do your own research. It may seem intimidating at first, but as you learn, you will come to realise that investing can be exciting, as you’re taking the first steps towards financial freedom.
If you’re looking to find opportunities which will bring you a return within 5 years, then you’ll need to be looking for medium-term investment opportunities rather than long-term options, which can keep your money tied up for 10, 20 or 30 years, or even until retirement.
For safe and steady long-term returns, stock funds such as an EFT, a mutual fund, the S&P 500 Index Funds or Nasdaq-100 Index Funds are great options. They allow investors to dabble in the stock market without spending their time researching which stocks to invest in, as essentially, these funds are a bundle of the most popular and highest-performing stocks. You can invest in these funds yourself, through apps such as Trading212, where you can also buy individual stocks.
Investing in individual stocks is another great option, but you must do your research. Stick to companies which investors consider to be ‘high growth stocks’ that are predicted to succeed over the next 5 years, usually, these will be technology companies.
Are Cryptocurrencies a Good Investment?
Cryptocurrency has been a buzzword in recent years, as young investors are flocking to invest in crypto over more traditional opportunities. And, while the value of many top cryptocurrencies has been sharply declining in 2022, this doesn’t necessarily mean that crypto is a bad investment. In fact, the best time to buy is when prices are low, as they will most likely rise again. Platforms such as Coinbase or Binance will allow you to buy and trade your cryptocurrencies easily. As with stocks, it is important to do your research and invest in crypto projects that excite you or seem to have a real-world application. Make sure to stay level-headed and don’t get caught up in the hype, as things can easily turn sour, as it did with Luna earlier this year.
Although, don’t let the fear mongers discourage you. Of course, investing in cryptocurrency is risky, but it is also here to stay and the rewards can be amazing. The key to any successful investment is diversification and so, as long as you make sure not to put all of your eggs in one basket, you should be sure to see some returns.