I can see the progression now. You’ve moved up through the levels. Graduated from the elementary school of the caffeine world, single-serve K Cup coffee and pushed on through the uninspired mass market that is Starbucks. You are now attending the Ivy League of the refined caffeine world, supping Nitro Cold Brew Coffee with Team Hipster. Young. Trendy. Caffeinated. Life couldn’t get any better. Could it?
There is one key word mentioned in the above that is game-changing. Young. When it comes to finances, the earlier you move, the more you have to gain. And moving could be as simple, and cheap, as using what it costs you for a ‘Trenta, no foam, five shot, half-caff., pumpkin spice latte, with no foam at 210-degrees‘ to invest in your future. And this if your future. Retire early, travel the world, start your own business. You set the rules. Read on to find out how. Powered by caffeine or not, your energy levels should be high after this game changer!
So how do I translate 5 bucks a week into something big, where do I look? First things first, where should you avoid! Your gut tells you to stay clear of ‘the man’, that financial advisors aren’t right for Millennials, that Wall Street isn’t working for you. And this time, your gut it right. Most financial advisors get paid by pushing your hard earned caffeine fund towards the highest bidder. And guess what, the highest bidder can only bid high as he makes lots of money from people like you!
There is this thing called the fiduciary rule – stick with me, it’s important. Once implemented, this meant that financial advisors had to represent you, and not the other side. It should be in place now but the powers that be have pushed it back at least 2 years. Fills you with confidence to invest, right? Don’t worry. There are different routes you can take and unsurprisingly, you’ll find them from your smartphone.
Sites such as Wealth-Hack and NerdWallet exist to help millennials understand how to make savvy financial decisions and to highlight which providers are delivering the best service, be it transparent cost, ease of use or alignment with millennial values. Want to invest in the Nitro Cold Brew Coffees of the future? Sites like Wealth-Hack will show you where to go, and do it in an ethical way. Unlike financial advisors, all advice delivered is publicly viewable and can be commented on. If I push you in the wrong direction, the rest of the world will know, quickly. Conflict of interest gone as a quick as that downed expresso!
OK. So I know where to get online advice on financial matters that I can trust. But you still haven’t told me how I can divert a cup of coffee into a financially transformed future! Fair point and we are now at the part where we do ‘the big reveal’ and this one has two parts.
Part 1 – The Power of Money over Time
I bolded the word young earlier on. The next time you read about someone ranting millennials for spending money on amazingly tasty coffee, smile. As it’s a Gen X’er who doesn’t have what you have, time. Every time you invest in something that grows with interest, you don’t see much improvement. How can 3% on a cup of coffee make a difference? And if you only save for 12 months, you are right. But if you allow your savings to mature, interest piles on top of interest. If you give it time, 5% of anything becomes interesting. This financial concept is called Compound Interest and to show you its power, one cup of coffee a week ($5) invested long-term ($40 years) would net $31K. That’s a lot of Joe!
Part 2 – Robo Advisors
There is a new breed of financial products called robo advisors. They invest your money automatically and, using tech even more powerful than your smartphone, take advantage of opportunities to buy and sell without you needing to worry. And best of all, they are cheap. Real Cheap! Take WiseBanyan as an example. For people looking to experiment, low cost, low risk, they are perfect. WiseBanyan is essentially a free service which automatically manages your investment and even helps you plan for future goals (find out how much you could earn).
No such thing as a free dinner? In this instance, there is. WiseBanyan is looking to build a long-term service. As you get older and have more money to invest, they have chargeable products to help you. Their bet is to have you as a happy customer earlier in life will pay future dividends, for them and for you.
And so, your barista of online advice has to complete this serving and move on to the next soon to be energized customer. I hope you found the above informative and are intrigued enough to compare robo-advisors with keeping money in the bank.
But most of all, that you know now that you can redivert a cuppa into a life-changing opportunity! It’s as simple as regularly visiting your friends at Wealth-Hack (sign up for our newsletter below or follow us on Twitter or Facebook) and by experimenting with robo advisors such as WiseBanyan.
We have also created a practical guide that shows you what is involved investing with WiseBanyan and how much you could earn. Alternatively, you could compare robo advisors with saving your money in the bank. Please comment below to get engaged on this game-changing topic.
|James Burns. Founder @ Wealth-Hack|
|w: wealth-hack.com||e: firstname.lastname@example.org|