5 investment strategies for Millennials in emerging markets

A note: Please kindly note that Cenoa does not provide investment, tax, legal or accounting advice; and this material has been prepared for informational purposes only. You should consult your own advisors before engaging in any transaction. You can find detailed disclaimers on Cenoa’s website. 

Currently in their late twenties to early forties, Millennials range from being relatively early in their careers to kicking off their peak earning years, which means there’s no one-size-fits-all approach to investing for Millennials. But anyone, in any market, can start investing, building wealth, saving for financial goals, and planning ahead for retirement — even if they need to start small. 

Millennial financial challenges in emerging regions

Financially speaking, Millennials have drawn a challenging hand. In addition to the economic barriers that all generations are facing — skyrocketing cost of living, layoffs, inflation — Millennials have come of age during a time when the global housing market is harder than ever to break into. Add on historic levels of student debt, and you’ve got a generation that may not have much left over for investing. 

Millennials who are embarking on long term financial planning for the first time may feel entirely overwhelmed: a recent survey found that Millennials (and Gen Z) should be setting aside 15 - 20% of their gross income for retirement in order to live comfortably. But the average net worth of Millennials in the UK, for example, is between £85,000 and £300,000, making it hard to put money away while trying to buy property, go on trips, and live their everyday lives.

How Millennials can start investing

Even if you’re only saving or investing a very small amount at a time, it’s important to start as soon as possible. Whether you have a little bit saved that you can start to use for investing, or you’re starting from scratch with just a few dollars a month, Millennials still have many years to make the most of compounding interest. 

Invest or save a little at a time

Many Millennials don’t have the money that they wished they’d have at this age. But being discouraged by the state of the economy to the point of giving up completely doesn’t help. Use an investment return calculator, or projections for your money, like those in the Cenoa app, to map out a few scenarios and see what even small investments can do for your financial future. 

Here are a few examples of investments where you start small or contribute very minimally over the years — it’s still exponential growth:

If you’re able to start with a little more, or contribute a larger amount on a yearly basis, you can see greater dividends more quickly. 

Always diversify investments

Millennials know firsthand how precarious the economy can be — so it makes sense to always err on the side of caution and diversify your investment strategies. Never put all of your savings and investment budget into one opportunity. 

Take advantage of compounding interest

Because Millennials have several decades to keep earning money, saving, and investing, that also means they have many years to take advantage of their money building on itself, as shown in the examples above.

Keep investments in a flexible account for emergencies

Rather than locking your investments away, which can be scary in case you need it for an emergency, use a flexible savings option like a super wallet. Super wallets like Cenoa allow users to access funds at any time without tax penalties or holding periods, but the money you keep in them grows like a low-risk investment. 

5 investment strategies for Millennials

Here are some of the best investments for Millennials to grow their wealth long term.

Mutual funds

Since Millennials have many years of earning and investing ahead of them, mutual funds are a good bet. They’re large collections of stocks, so they’re inherently diversified, and though they may rise and fall with major economic shifts, Millennials have the time to ride out any small bumps in the road. 

Find out which mutual funds are available in your country and work with a financial advisor or broker to choose one.

Cenoa

Cenoa lets users buy digital dollars, always on par with USD, and grow their savings in real time with up to 5% yield. Especially for Millennials in countries facing currency depreciation, storing savings in the form of digital dollars can be a relief. There are no fees to use Cenoa, and you can withdraw your funds at any time. 

Real estate

Millennials are investing in real estate whenever possible, even though it’s harder than ever. For Millennials who live in relatively affordable areas, have help from their families, or have high-earning jobs, investing in real estate in emerging markets is an excellent way to secure wealth for the future.

Employer retirement matching

Regularly contributing to an employer retirement plan — and taking advantage of employee contribution matching — can help you reach that lofty retirement savings goal.

High-yield savings accounts

High-yield savings accounts are those that provide yield that’s 10x higher than an average savings account — typically between 3-5%. They’re a very low risk way to build wealth over a long period of time, even if you grow slowly. 

Millennials can start saving and investing — start small and look to the future.

Millennials may be overwhelmed by their finances — or lack thereof. But saving at any point in your career by budgeting and putting anything that’s left over into the savings or investment strategies pays off.

Learn more about how Cenoa can help build short-term and long-term wealth for Millennials.