Retirement is a long way off the mind of today's youth, but it could come sooner if you make the right investments now.
According to many of today's financial experts, investments that yield a passive income are the best way to line the pension pot and enjoy a prosperous future.
A recent study from Bankrate revealed that just one-third of 18 to 35-year-olds play the market, the main reason for the reluctance being that Millennials find stocks too risky and they don't know enough about them to feel comfortable diving in.
Steering away from stocks may well minimise the risk of smashing your nest egg into a billion tiny pieces, but it could mean that your pension pot isn't heaving full of retirement treasure as soon as you'd like. But, passive investments are said to provide the perfect middle ground for young investors looking to make money without running the risk of losing what they've already acquired.
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What is passive income? Well, put simply, it's money that flows in on a regular basis without requiring an incredible amount of effort to create it - but of course, to get the ball rolling, you must do your research, front the initial funds, and have a strategic eye for investments.
Once you've got your starter funds and you feel confident enough to invest them, you will need to choose which sector you would like to delve into. Here are four solid areas of passive investment:
- Real estate: The preferred choice for investors who want to generate long-term returns. Buying to let can prove to be a particularly solid source of passive income.
- Peer-to-peer lending: a decade old industry that has come on leaps and bounds in recent times. Choose a reliable individual or business to invest in, and you will reap the benefits with a minimal input.
- Dividend stocks: one of the easiest ways for investors to build a reliable passive income because they are effectively getting paid to own them.
- Index funds: funds that are tied to a particular market index, that essentially mirrors the overall performance of that market. Excellent passive income opportunities for those who do their homework.
There you have it, passive income opportunities to line the pockets of the savvy millennial. If you're looking to invest, we wish you the best of luck - and whatever you do, remember:
"An investment in knowledge pays the best interest." - Benjamin Franklin