I Got Bills (Part 2)
In the first part of “I Got Bills” we explored millennials and their entry into the job market. I explored some well known facts about this generation and the challenges they may face in terms of financial literacy.
After analysing the results of our questionnaire, it has become apparent that although financial products have become more accessible, the average individual’s financial literacy has not improved. Although individuals have access to multiple savings and investment platforms, their lack of knowledge on these available products restricts their financial decisions.
Savings refers to the amount of money that is left over after you have spent what you intend to in a given period; in an economics sense, savings refers to the amount of money that remains from your disposable income after subtracting all of your expenditures. Investment on the other hand, is what you can do with this residual in order to increase your future income. Investments earn a return and provide a future benefit as a result of lower consumption today. Ultimately, investments are something you can choose to do with your savings. In simple terms: savings are short term financial decisions whilst the time horizon on an investment is longer.
In order to enhance your financial literacy, you don’t need to look too far! As the fast paced world continuously updates its technology driven, user-friendly apps and interfaces, all the information that you need is just a click away. Most banks have ample information available on their websites and even allow you to refine your search by selecting the purpose for your savings or investments. Websites are designed to assist the customer and you can easily compile your own portfolio.
Investment companies often provide a sense of security for those individuals who do not feel as confident in their decision making ability, when it comes to finance. Alongside their precompiled portfolios and funds, investment companies often provide information on investment insights and cover a broad spectrum of hot topics through articles published on their websites. Having someone invest for you can be less stressful, but remember to always analyse the fee structure.
If this seems too simple and you would like to learn about the exciting world of trading, there are many platforms that allow you to open a free training account. The best way to learn the intricacies of trading is to try it out for yourself. Choose a portfolio of stocks that interest you and follow their performance. By making a decision on what to buy, sell and hold, you will learn a great deal about how the markets operate and formulate a personal opinion on which type of stocks you prefer.
In conjunction with these tools you can find almost any information that you seek online. YouTube concepts and strategies that interest you, Google search for better understanding of jargon used in the financial world and follow information providers and companies on Twitter.
As financial products are made more accessible, access to information and training resources is simultaneously available. Do not be shy to look! If you find a product or service that interests you, research it and become more financially savvy.