How to invest for Millennials

This guide will walk you through the best ways to invest as a millennial. Time is the biggest thing you have to your advantage as investing as a millennial, so the sooner your start investing, the more wealth you can accrue over time. 

Millennials are people born between 1981 to 1996, dates now clarified by the Pew Research Center. Millennials were named because they welcomed in the turn of the millennium and came of age during the boom of the digital world. If you’re a millennial, digital native or just want to learn more about investing, we welcome you. This isn’t just for those in they’re twenties but can be applied to anyone who is anywhere from 18 to 40!

The problems millennials face

Millennials face the most uncertain economic future since the Great Depression with a massive 15% of those in their early twenties unemployed, compared to the average 7-9%. As a result of decreased labour mobility millennials are stuck in a stage of stagnation. When there is less movement between job to job or even across different areas employers gain the power to negotiate and limit wage increases – a phenomenon called monopsony. Starting off with low earnings compounds, making it harder to save and invest for your future. 

Starting off with less household income relative to older generations, living expenses can take their toll. Not only in a more sluggish job market do millennials tend to invest more time and money in getting higher education and further degrees but entry level jobs are more competitive and are at the bottom of the pay scale. 

Becoming financially independent is hard. You can gain independence by being frugal or through income, growing wealth overall will make the difference and you’ll be thanking yourself for investing long-term. Broadening your income horizons through education or work experience is the route to becoming more financially independent. 

All these things add–up to greater debts and less way to repay them. Some feel that paying off their student debts will be a weight off their shoulders, but this isn’t the smartest move. Student-loan repayments does not make your money work for you, and if you’re in the UK then you are only required to repay 9% of your income once you reach the repayment threshold (£26,575 pa). Furthermore if you don’t manage to repay your outstanding loan balance over 30 years then your debt will be cancelled!  

Another thing to add to the list is the shocking interest rates out there. Older generations could deposit their money in a savings account with their bank and with a steady rate of interest build wealth over time. But now with interest rates at an all time low there is little point holding a savings account. Especially with the UK government threatening negative interest rates meaning you will actually lose money by holding it in a bank! In 1990 (around the time your parents probably started investing) banks offered 14% interest, yet since the financial crash wrecked the economy in 2008 interest rates have been around just 0.5%. Remember there is no point putting money in a savings account that has an interest rate lower than inflation. 

Saving for retirement is getting harder and harder. Also 70% of people surveyed believed as retirees they’ll be able to survive on $36,000 a year. This is a huge problem is that in 2018, the average yearly expenses for those ages 65 to 74 were $56,268 a year, according to the Bureau of Labor Statistics and with inflation and cost of living only going up, this could end millennials in a sticky situation. 

So do Millennials invest?

A Bankrate survey found that only 33% of people under 30 owned stocks in 2016 due to lack of funds. However, since lockdown there has been a huge increase in interest in investing in stock markets from young people. With return rates hovering in the 10% range and those who start investing young benefitting from compound growth. It really is a must!

Why choose ETFs

Get a brokerage account to buy stock – a fractional ownership of a business. The outcome of your investment relies on how that business does, you will get positive investment returns if you invest smart! Buying individual stocks takes a lot of time and research so it might be better to invest in ETFs which allows you to diversify and reap long-term rewards that are stable and reliable. 

If you are just starting out the single most important thing to do is to control your emotions. Investing in an ETF allows you to own stock across the stock market. Losing money is part of investing so being able to cope with loss will teach you how to stick with the long-term. You can buy an ETF for a specific industry for example, tech, green energy or gold. For example if you invest in the FTSE 100. 

ETFs were created to disrupt the success of mutual funds. Although they are similar, a mutual fund is taxed on any capital gains whereas on an ETF you will only be taxed once at the point you sell your stocks. ETFs are also typically cheaper so can give you a headstart if you’re a new investor.

To invest in an ETF, you will need to open an account with a broker to manage your investments. If you’re just starting out we recommend eToro and easyMarkets for their easy to use interfaces and fee – free trading.


Bonds are different from a stock, this way you are instead loaning money to that company so they can invest in their business. Over a period of time, the company pays you interest e.g. quarterly, which acts as profit. If the company is failing and cannot pay back their debts then you lose out. 

There are some government backed bonds which are “risk-free”, essentially a government won’t default or fail meaning your investment is safe. 

Now you know a few of the best ways to invest as a Millennial you can start putting your money to work, we recommend eToro and easyMarkets for beginners. 

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