Do you know about fractional investments? Are you investing at all? If you haven’t already heard, millennials aren’t investing at the rate they probably should. Armed with reasons that range from not having enough money in the bank, to a general distrust of the stock market, 43% of millennials said in a recent GOBankingRates survey that they haven’t invested a dime. The news isn’t good for the other 57% — 54% of them have invested less than $5,000. Some quick math will tell you that, even with compounded interest, it won’t be anywhere near enough for that ideal retirement.
So why aren’t millennials investing? 45% responded that they don’t have enough money, while 34% can be attributed to a lack of education around investing — either they don’t know how or aren’t aware of the different options available. The other 21% either don’t want to invest or don’t have time.
No matter how you slice it, these results reflect how disillusioned millennials feel towards investing, and financial matters in general. The real estate market is off-limits to most, the impending recession has decreased trust in stocks. Bonds pay peanuts in interest. Savings accounts? Well, what’s the point? There is hope, though!
A combination of technological advancement and innovation has given birth to the idea of fractional asset investing. The idea is simple: instead of buying an entire property, work of art, sports collectible, or share, you buy a portion of it, also known as fractional investing.
As with any investment, it’s important to do the necessary due diligence. Ask yourself: What are the tax implications? What are the associated fees? What level of risk are you willing to tolerate? What return can you expect? How is that return paid out? Can it be reinvested?
Next, figure out how much you’re willing to invest. Diversification is key, so don’t put all your eggs in one basket. If necessary, give the investment a trial run with a small amount. If all goes well, you can always invest more.
Finally, commit to investing at least some of your salary each month. It doesn’t have to be a lot, but nothing will help you build that retirement nest egg faster than monthly contributions.
For most millennials, fractional investing is the answer they were looking for: the ability to invest in stable assets at an affordable price without the hassle while earning passive income. And if you need a quick injection of cash, you can easily sell your assets without the need for annoying paperwork.
This is the future of millennial investing.
Invest what you want, when you want, then sit back and let the asset do the work. Because, really, you shouldn’t let others have all the fun.