5 Ways Millennials Can Build Wealth That Is Designed to Last

Financial management can be overwhelming for some millennials, but withthe right approach, you can still build wealth that lasts.

Some affluent millennials are finding it hard to grow and retain wealth because of the financially difficult times that have influenced their careers. As such, they may need to work beyond retirement age, even though they’re doing well now. Or the money they’ve made so far won’t have the impact they’d like it to.

No matter how well your career and financial situation are going today, you may not have the means to live your best life and impact the world the way you want without a solid wealth-building strategy.

The investment knowledge gap

One of the biggest struggles for affluent millennials when it comes to financial management is a lack of knowledge about investing. According to a recent survey of affluent millennials*:

  • 63% of millennials do not feel knowledgeable about investing and retirement planning.
  • Millennials who lack investing and retirement planning knowledge frequently describe investing as intimidating, risky, overwhelming, and complicated.
  • High-income millennials who possess investing knowledge are five times more likely than others to feel confident about their financial decisions.

The bottom line: Investment and retirement planning knowledge are powerful ways to take control of your financial future, particularly for affluent millennials who still have plenty of time to grow wealth for the future. Millennials who understand the ins and outs of financial management may be in a better position than any other cohort to identify and mitigate financial risks, avoid debt, and build wealth that lasts.

millennials group chatting

5 tips to help millennials retain their wealth

There is no silver-bullet solution to help millennials retain wealth. However, there are several things you can do to put yourself in a position to manage your finances better and get the most value out of the resources you already have:

1. Make investments

Investing can be scary and even hard to afford early in your career. But starting to invest during your 20s and 30s could be beneficial for many reasons.

If some investments do not deliver their intended results, there are ways to spread risk and hopefully recover.If investments do well, investing early gives you the opportunity to benefit from a longer runway for growth potential through the power of compounding.

Consider whether you want to take an active or passive approach to your investments. If you choose an active approach, you'll need to keep a close eye on your investments and conduct extensive research to actively rebalance your investments. If you embrace a passive approach, you should consider diversifying your portfolio to help limit the risk of substantial losses from any one investment or category of investments.**

2. Invest based onyour core values

There is no shortage of investment options, and millennials should invest in what they trust. That way, you can feel good about what your money is doing. Often, making thoughtful investments around industries you know and care about may cause you have a better understanding of that sector. Of course, this is not guaranteed.  

When it comes to building a portfolio based on your core values, start by meeting with a financial professional. An experienced representative will help you understand your position and how to reach your goals, and they will build a custom strategy that helps you achieve those financial goals. Plus, a financial professional regularly monitors and evaluates your investments to offer ongoing guidance and support.

3. Avoid credit card debt

It can be tempting to use credit cards and let debt accumulate. Yet, the longer debt accumulates, the tougher it becomes to payoff. If you let debt add up for many months or years, it can hamper your ability to retain wealth.  

Ultimately, it helps if you can avoid holding debt that charges interest whenever possible. When you use a credit card to cover everyday expenses or luxury purchases, make sure you pay it off before the interest is applied. It’s also beneficial to pay down car loans, student loans, or other debt faster than expected. Over the long term, these debts can rack up more in interest than you borrowed in the first place, which severely limits your options for growing long-term wealth.

4. Set financial goals

Effective financial management requires long-term planning. Although you may want to stay in the present, you should consider learning the fundamentals about investing now so you have the potential to achieve your financial goals.  

By setting financial goals, you create investment and retirement planning milestones that you can be confident will lead to the future you envision. Consult with a financial advisor to help create your financial goals for your future.

5. Track your results  

Financial management is an ongoing process, and you need to remain diligent. Even a minor financial issue can quickly escalate and put your future at risk. Consistently monitoring your everyday finances, investments, and retirement planning portfolio may help you stay on track toward long-lasting financial success.  

A financial professional can be a difference-maker relative to financial management. This financial professional can help monitor your financial portfolio and keep you up to date. He or she can also provide tips, recommendations, and suggestions based on your financial goals, risk tolerance and time horizon to help ensure that your investments maximize their earnings potential.

Learn more about financial management for affluent millennials

At Fortis Lux, we believe educating our clients about financial management is the first step to their financial well-being. Our holistic financial approach helps ensure you can get the information you need to make data-driven investing and retirement planning decisions that will lead to achieving your financial goals. We offer a wide range of financial services tailored to millennials. To learn more or to schedule a complimentary consultation, please contact us today.

Provided by Fortis Lux Financial, courtesy of Content Bacon. This article is for educational purposes only, and is not advice or a recommendation for any specific investment product, strategy, or service.  Securities and investment advisory services offered through qualified registered representatives of MML Investors Services, LLC. Member SIPC (www.SIPC.org). 420Lexington Ave. 25th Floor, Suite 2510, New York, NY 10170. (212)578-0300. CRN202302-275033

* https://www.investopedia.com/the-investopedia-affluent-millennials-study-4769751
**Diversification does not guarantee a profit or protect against loss in declining markets. There is no guarantee that a diversified portfolio will outperform a non-diversified portfolio or that diversification among asset classes will reduce risk.