Gen-Z, Millennials & Money: Why Investment Education is Crucial in Digital World

investment education
Apr 9, 2024 Reading time : 5 min

Investment education is a blessing not only for rookies but also for seasoned investors. The right knowledge of how to play with your funds can embark you to financial heights like never before.

According to statistics provided by Groww, 30.7% of millennials lack investment education. As a result, the U.S. SEC [Security and Exchange Commission] reported that a massive population became the scapegoat in 2022 affinity scams that cost them over $122 million.

Being the young and upcoming generation, it is your responsibility (if not a necessity) to educate yourself about the investment you make with your hard-earned money. Thus, to gain a deeper understanding of the significance and resources for investment education, make sure to read the entire article.

 investment education

Why Do You Need Investment Education?

If you aspire to be financially stable by the time you retire, Investment education is for you. However, its benefits are not only limited to a stable retirement. Sites like prioritize it for the following reasons:

  • Making informed and viable investment decisions: It is a no-brainer that with proper investment knowledge, you can make decisions that suit best your expectations. 
  • Retirement planning: Your job is not going to last forever. At some point in time, your recurring monthly salary is not going to be your support for your finances. Therefore, education on where to invest as early as possible is necessary for stress-free retirement.

According to statistics, you need $1.46 million in your accounts to retire comfortably in the USA.

  • Long-term wealth: Once you know the right steps to take with your money, you can multiply it exponentially over time. Many investors and financial experts even focus on investing as soon as possible so that they can have a lump-sum amount in the coming years. This way, they can quit jobs permanently even in their 40s and 50s with a continuous flow of funds for their survival.

However, there is always a risk of loss that works irrespective of your financial wisdom. Even master money multipliers fall into losses. Speaking of long-term investments, you can enjoy their real potential if you invest your funds for more than 3 years. 

What Things Your Investment Education Should Focus On?

While searching for a resource to learn about investing, you must ensure that it is worth your trust. Following are the areas on which your study should focus:

  1. Different investment options: Starting from the basics, you must be aware of all the investing opportunities where you can multiply your funds. Basic options include stocks, bonds, gold reserves, crypto, etc. However, with proper research about these options, you can judge them by their advantages and disadvantages.
  2. Investment analysis: It involves analyzing and judging the investments you have made on the basis of their performance. Moreover, the same practice can be used in the process of due diligence as well.
  3. Risk Management: You cannot expect when uncertainty might fall upon you. Therefore, your investment education must get you ready for any situation that can cause you hardships.
  4. Investment Portfolio Diversification: The more you diversify your portfolio, the less you are prone to financial risks. Portfolio diversification provides you with backup options in case any one of them defaults. However, for this also, you need proper information about how to diversify your investments.

Apart from the modern tech involved, cryptocurrency is still considered a less reliable investment option, since it is not legalized in all countries around the world.

These are those 4 areas on which your research must emphasize specifically. Any fault in even one of them can cause serious issues in your whole investing journey.

Investments Options You Need to Know About

Based on their risk and other factors, there is a pool of investment options that you can go for. The list given below enlists some of those options: 

  • Stocks: This is the most popular and common alternative around the world. Stocks are high-risk and high-return investment options where you have equal chances of gaining or losing your money.
  • Bonds: Compared to stocks, bonds are a safer option to put your money in. However, the rate of returns is significantly low in bonds. It is basically a debt that a company or governments seek from the common population in return for an applied rate of interest.
  • Mutual Funds: Expert financial players or banks release their mutual funds which ultimately invest your money in certain categories of companies. These categories include small-cap, mid-cap, and large-cap companies. However, to provide a better risk-to-return ratio, some funds also offer hybrid options such as small-midcap funds, or midcap-large cap funds.
  • Real Estate: Real estate is undoubtedly one of the best assets that you can own. Other than lifestyle advantages, a property at an ideal location can get you great returns on your investment. You can lease them for a period, or resell them at better prices.

Final Words

Investing without proper knowledge is equivalent to fighting a war without any weapons. It is pertinent to learn about the basics and operations of the finance industry before putting your money on an asset. Apart from that, an ideal investment education focuses on other areas as well such as investment options, Investment analysis, Risk Management, etc. to avoid any uncertainty or loss.