“Buy land, they’re not making it anymore.” – Mark Twain
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One of the biggest differences between baby boomers and millennials is their contrasting views on money-related issues. As a generation, millennials are poorer than their parents and their grandparents, making decisions to adapt to volatile financial markets difficult. While some baby boomers were able to buy their houses by the time they were 30, their children are choosing to rent in order to stay fluid.
Over the last few years, analysts have weighed up the pros and cons of home ownership, explaining that while the price of renting has shot up since the financial crisis, they don’t compare to the prices of mortgages and annual maintenance costs. As Time Money explains: “Buying a home is a perfectly fine decision. It’s just not a financial one.” Because of opinions like this, millennials don’t see the appeal of investing in real estate – instead, they seek other potential areas of opportunity that they feel will gain them better returns.
Millennials don’t seem to be interested in other traditional investment channels either. According to Business Insider, about 40% of millennials have no intention of investing in the stock market.
Additionally, forex doesn’t seem to be a popular choice either despite the fact that currency trading is a decentralized global market where anyone with as little as $50 can participate. FXCM states there are free forex demo accounts that anyone can play with in order to learn the ropes. But despite the free tools and resources that can be accessed by anyone with an internet connection, the majority of millennials don’t seem to be interested.
While not having enough money is the primary reason for many choosing not to invest or looking into the potential of currency trading, Millennials should try harder and consider making an investment, no matter how little, to have a better future. It may be hard at first but with the right mindset and financial planning, anyone can start investing. Real estate may not be a popular choice among Millennials right now but it should be based on historical data regarding investing in physical assets vs. cash.
Although experts state that currency trading stands out among all types of investments due to a number of leverage traders can use, there are still lots of potential in real estate to gain returns. It’s all about smart management and finding the right platform to help them attain the desired financial goals.
While housing markets aren’t usually directly affected by the changing political climates, in contrast to currencies, recent global events reveal that not one singular investment can always be relied upon as a hedge against financial or political change. Over in the UK, economists shared with International Business Times that the local housing market is expected to decrease by 7.7 percent. Compare that to the US housing market, which is anticipating positive results under the Trump administration, The Independent Journal Review predicts that the country’s real estate will continue to strengthen in terms of prices, foreign investment, and low mortgage rates.
But that statement in itself is too vague to convince investors to add real estate to their portfolios, so here are some solid reasons why you should consider this kind of investment:
You may not be looking to settle down anytime soon, but that shouldn’t stop you from investing in real estate. Doing so will result in additional monthly income as well as a hedge against inflation, setting yourself up for a secure future later on. The key is to take care of this material investment, as maintenance will help the value of the property appreciate year after year.
One of the weaknesses that millennials have in portfolio management is diversification. In addition to being a hedge against financial crises, real estate is a great asset to include so that you’re not putting all your eggs in one basket. One of the best things about investing in real estate is that houses can be sold, and the returns can be big given the housing bubble that the U.S. has experienced in the past.
Being socially aware and able to assess when a risk is worth taking are two qualities that make millennials the perfect investors. Their desire to live independently has led to them wanting to save for future financial security. This has the industry adjusting to make sure they cater to their needs, especially considering the extremely low percentage of millennial homeowners at this point in time. In addition, the younger a real estate investor is, the more lenient the payment terms. Millennials can opt to pay over a longer period compared to baby boomers who want to invest in housing today.
Real estate is a solid investment that anyone can benefit from. Unlike fiat assets like cash, real estate is a physical investment that Millennials can use or trade should a better housing opportunity present itself.