Millennials are the group of people born in the early 80s up to late 90s. They’re the generation of massive student loan payments, living at home until their mid-20s (or later) and spending their day texting their friends. Though this may describe some millennials, it most certainly doesn’t describe them all.
Millennials are also self-starting entrepreneurs, successful business owners and innovative thinkers. They’re educated, creative and extremely influential. If you’re a millennial hoping to grow your wealth, retire early or quit your 9-5 and start working for yourself, you won’t want to miss these five must-follow rules to grow your wealth.
Rule #1: Create a Budget and Save
Millennials live in an age of keeping up with the Jones’. They want what they want when they want it, and with loans being fairly easy to get (assuming you have good credit and proven income), many millennials wind up with debt to their eyeballs. This suffocating lifestyle will force you to work until the average age of retirement and possibly even well into your retirement years. Instead, create a budget unique to your lifestyle, not your neighbors. What should be your first category? Saving money.
Rule #2: Invest
Millennials have one huge advantage when it comes to investing over older individuals—time. They can take more risks since they have many more years to go until retirement. An ideal portfolio for a millennial is diversified—consisting of both safe investments, such as your company 401K match and bonds, to more risky investments, such as high-risk mutual funds. As you grow your portfolio, you might want to consider investing in real estate or gold, both of which can give high returns.
Rule #3: Create Multiple Income Streams
If you were to lose your job, would you still be able to pay your bills? Millennials should look to create multiple streams of income through picking up a side hustle or starting a business. In the event of a job loss, or if you’re hoping to retire early, you will have more money saved, more money invested and more financial security. We live in a world of opportunity and millennials should be taking advantage of this. Gone are the days of working your life away in trade of a paycheck. Create your own income and therefore, create your own life.
Rule #4: Create Passive Income Streams
Passive income is income that doesn’t require much, if any, work from you. It’s the ideal way to make money. Passive income can range from growth on your dividends to buying rental properties to building and growing your own niche website. Put in the work and money now so it will pay off later.
Rule #5: Keep Your Goals in Mind
If you haven’t determined what your long-term financial goals are, now is the time. Ask yourself how old you want to be when you retire, how much money you need to live off of to be comfortable and how much of your income you can put toward savings and investing right now. Then, sit down and think about what it is you want out of life. Make a financial plan that will allow you to achieve those goals.
Money is simply a tool for creating the life that you want. By making financially sound decisions and preparing for the future, millennials are able to live out the life of their dreams.
What is one strategy you have for growing your wealth? Share in the comments.
Donny Gamble Jr. is a financial blogger who runs investment blog, Personalincome.org He is also an online entrepreneur, investor, and published author. Make sure to follow him on Twitter @donnygamblejr