Stable investments over riskier bets
According to a recent survey from Bank of America, individuals aged 21 to 43 with at least $3 million in assets only have 25% of their portfolio invested in stocks.
It is worth noting that 93% of these rich, young Americans say they plan to allocate more of their portfolio to alternatives in the next few years, according to the survey.
So, what alternative investments are capturing the interest of these young millionaires?
The Bank of America survey revealed that among wealthy young investors, 45% own gold as a physical asset, and another 45% are interested in holding it. Precious metals are a tried-and-true way to hedge against inflation and market downturns, offering a sense of financial stability over the long term.
One particularly advantageous method is a gold IRA with the help of Thor Metals. Their retirement accounts can help you stabilize your finances by allowing you to invest directly in physical precious metals rather than stocks and bonds.
Opting for a gold IRA can offer a financial cushion that helps you feel more secure about your future.
Comparison: the greatest thief of joy
It’s not surprising that so many Americans struggle to understand what their financial standing really is. A Pew Research study found 83% of Americans use some form of social media in 2024.
Why is that important?
Aside from an array of finance influencers who all have varying opinions on the best way to create wealth, social media also inherently lends itself to comparisons. but remember: Nobody’s showingtheir mortgages or debts on Facebook and Instagram. Instead, they’re just sharing five-star vacations and ritzy nights out.
This is why professional financial advisors play a crucial role in helping you understand your actual financial position and plans for the future. With the help of a qualified professional, like those you can find through Advisor.com, you can find out where you really stand.
Advisor.com is a free service that helps you find a financial advisor who can co-create a plan to reach your financial goals by matching you with a small list of the best options for you to choose from. From their database of thousands, you get a pre-screened financial advisor you can trust. You can then set up a free, no-obligation consultation to see if they’re the right fit for you.
Social media and the FOMO factor
Social media also fuels FOMO (fear of missing out), especially as more people boast about their investment returns or sudden financial “wins.” Watching influencers and celebrities claim they’ve doubled or tripled their money overnight can easily lead to unrealistic expectations.
But getting investment information from reliable, expert sources (not from social media) is crucial.
When asked what he did to learn about the stock market, Buffett told Berkshire shareholders last year that he did a lot of reading.
“The answer would be, in my particular case, it would be going through the 20,000 pages [of Moody's Manual],” Buffett said.
Moody's Manual was a series of publications by financial services company Moody's on publicly traded stocks. These texts provided detailed information on various industries, companies and securities.
Want an easier way to gain useful insights without having to read thousands of pages?
Moby gives you access to the best investing research, broken down into simple, easy-to-understand formats.
Moby is made up of a team of former hedge fund analysts and financial experts who spend hundreds of hours every week sifting through the latest financial news. You get top-tier stock reports so you’re up-to-date on the markets. And the proof is in the pudding: Moby's picks have beaten the S&P 500’s returns by almost 12%, on average.
If you prefer a collaborative approach, Public offers a community-driven platform for investment insights. Public’s social investing features let you share ideas with their community of fellow investors, and gain insights from your peers.
Public also democratizes investing by offering a commission-free platform for trading stocks, ETFs, cryptocurrencies, treasuries, and even alternative assets.
There’s the added bonus of Public’s high-yield cash account with an industry-leading 4.6% APY and there are no fees and no minimum balance required. This can allow you to grow your uninvested cash more effectively over time.
Resist the urge to constantly check
Americans who are constantly checking up on their wealth or investment portfolio might also be incorrectly believing they’re worse off than they are.
Buffett has always preached about investing for the long-term and exercising patience.
“If you worry about corrections, you shouldn’t own stocks,” Buffett once said in an interview with The Street.
Market ups and downs are natural, but fixating on them daily can make you feel like you’re losing ground, leading to potentially short-sighted decisions as well.
Hands-off strategies, like those offered by Acorns, can help.
When you make a purchase on your credit or debit card, Acorns automatically rounds it up to the nearest dollar, and the excess is placed in a smart investment portfolio for you. That way, you don’t have to worry so much about your money being put to work.
When you sign up now with Acorns, you can get a $20 bonus investment too.
