Navigating the world of finance is a huge part of adult life, yet when it comes to teaching financial literacy only 17 states in the USA make it mandatory for high-schoolers to take personal finance classes. One of the key components in accomplishing financial competence is knowing how to generate cash flows outside of your day-to-day work, or in other words knowing when to save money and how to invest savings wisely. With the technology age in full bloom, everything from grocery shopping to setting up ecommerce is being done online, and making investments is no exception. Online platforms for investment services offer an ideal way to get the new tech-savvy generation of young people interested in their finances.
Explaining the Why
In order for youngsters to feel motivated to learn they need to understand why saving and investing is so essential. As of today, Millennials have the lowest rates of home ownership that have been seen for decades (8% lower than Gen Xers), with the number one cause being lack of down payment. Unsurprisingly, 66% of millennials also reported finding investing intimidating, and tend to be more conservative in their investments if they do make them. By saving and investing early on using new technologies, the next generation can undo some of these trends and avoid similar financial difficulties.
Microsaving Applications
Teenagers seem to be attached to their phones, so phone applications are a great way to introduce the idea of using savings to invest. Microsaving apps such as Acorns work by rounding up purchases to the closest dollar amount and then investing the difference automatically on your behalf. Apps such as these are great for introducing teenagers to the concept of both saving and investing and overall financial responsibility.
Real Estate Investment Trusts
Believe it or not technology has now made it possible for young people to get involved in real estate investment. Platforms such as FundRise offer Real Estate Investment Trusts that work by investing in property portfolios on behalf of individuals. With an initial investment as low as $500, platforms such as these are a great option compared with other alternatives such as Roth IRAs, which can require a minimum investment of anywhere between $1,000-$2,500.
Online technology offers a great opportunity to begin educating the next generation on financial literacy and investing in their future. By encouraging teenagers to get informed from a young age, they will be better equipped to handle future finances.