Last week I spoke to Ben Nash, the director of financial advice firm Pivot about realistic investments for Millennials. I also asked Ben the biggest mistakes he sees us making and whether we’re being reckless with our money.
“I think it’s important to consider the difference in values between generations driving much of the spending behaviour seen today,” he says.
“Previous generations, in particular the baby boomers, grew up with parents raised in a time of war, which very much drove a scarcity mentality. In contrast, younger people such as Millennials/Gen Y grew up in a time of unprecedented economic growth. This contributed to their ‘abundance’ mentality, which is resulting in our generation being largely driven by experiences as opposed to possessions.”
It’s true, the greater majority of Millennials value travel, dining, music and entertainment over owning assets. I sure as hell do. We would much rather invest in our own experiences, which leads to “vastly different buying behaviour,” says Ben.
“I think it would be inaccurate to say our generation is being reckless with money, we are simply choosing our priorities.”
And the biggest mistakes we’re making? Turns out we can find it pretty easy to get in over our heads.
“The biggest problem I come across is around people buying property without fully considering their investment,” Ben says.
“With current property prices in Australia, buying property is a huge investment for most young people and I’ve seen many that jump in without taking the time to make sure the investment fits within their overall financial and lifestyle plan.”
While owning property is seen as the pinnacle of Australian investment, rushing into the decision without first working out a sound budget can be detrimental.
“For many of the people I work with, it’s important for them to find that perfect balance between enjoying their lifestyle today and making the progress they want getting ahead so they can live the lifestyle they want in the future.”
Perhaps the most important piece of advice Ben gave me was that knowledge is the key to any investment. You must take the time to educate yourself on the rules, regulations and risks you’re entering into. If you’re unsure, consider seeking help from a professional.
“If you don’t have the knowledge, time, or inclination to do this yourself, consider engaging a professional adviser to help.”