Millennials: Avocados or homes?

[OMG!WTF!]

Originally Posted by Jason14h

No one said taking more risk guarantees more return.

However, over the LONG run, accepting more risk will give better returns assuming the risk vs return is priced correctly.

This seriously isn't a new concept or a concept I have ever heard anyone argue TBH!

GGG said exactly that a couple pages ago. Its been bugging me ever since.

[V]

Man, all I had to do was take riskier investments and I would have been rich by now!

[jammies]

To be clear, I'm not saying that taking some risk will not *probably* work out better in the long run, or even the short term. I'm taking issue with the implicit criticism by the "any idiot can make 7%, that's nothing!" crowd to those that are risk-averse.

It's one thing to claim the risk is small compared to the reward. It's a far different thing to say there's NO risk in something that is by its very definition more risky. For that matter, low-risk isn't the same as no-risk, either - there's always risk in investing, even in land or other assets that some claim can never lose value or become valueless. Deciding how much risk you can accept shouldn't just be glossed over as timidity versus good sense.

[GirlySports]

bubble tea!!!!! (which is also a waste at $5)

[Enoch Root]

Originally Posted by jammies

To be clear, I'm not saying that taking some risk will not *probably* work out better in the long run, or even the short term. I'm taking issue with the implicit criticism by the "any idiot can make 7%, that's nothing!" crowd to those that are risk-averse.

It's one thing to claim the risk is small compared to the reward. It's a far different thing to say there's NO risk in something that is by its very definition more risky. For that matter, low-risk isn't the same as no-risk, either - there's always risk in investing, even in land or other assets that some claim can never lose value or become valueless. Deciding how much risk you can accept shouldn't just be glossed over as timidity versus good sense.

You are absolutely correct on that.

Risk and return are related. But simply taking more risk is haphazard at best, and irresponsible for most. (Though it could be quite acceptable to someone that a) understands the risk they are taking, and b) can afford the losses).

Having said that, with proper risk management and diversification, building a portfolio with an expected return of over 7% is not at all lofty or unreasonable.

[Locke]

Can we grind Millennials up into sustenance for the rest? I mean, if we dont have to commit resources to their 'aliveness' (<- Totally a word) we could commit those resources to something else.

There would be more and cheaper housing and Avocados for the rest of us.

Its win/win here people. Win/Win.

[Winsor_Pilates]

The bothersome part of this whole discussion is that it treats things as mutually exclusive.

In reality, the cost of living and buying property is ridiculously high in many cities, many millennials waste a lot of money on stupid things, and many people have little knowledge on how to save or invest wisely.

It's really an all of the above problem.

[GGG]

Originally Posted by OMG!WTF!

GGG said exactly that a couple pages ago. Its been bugging me ever since.

Well I assumed I didn't have to spell out that the expected value of your return will be higher the variance will also be higher. I thought that was pretty clear when you say assume more risk. Risk in a stock market is variance in outcomes.

[PepsiFree]

Originally Posted by northcrunk

Man. What is wrong with my generation? There seems to be a big divide between millenials in their early 30s and the early 20s crowd.

Early 20s is not millenial. Don't lump us in with you weird poor people.

Originally Posted by peter12

So until I own a house, I guess its just water and cold potatoes for me.

The secret is getting a sugar daddy/momma.

[Fuzz]

Originally Posted by PepsiFree

Early 20s is not millenial. Don't lump us in with you weird poor people.



The secret is getting a sugar daddy/momma.

I got news for you, you weirdo...

researchers typically use the early 1980s as starting birth years and the mid-1990s to early 2000s as ending birth years.

https://en.wikipedia.org/wiki/Millennials

[PepsiFree]

Originally Posted by Fuzz

I got news for you, you weirdo...

researchers typically use the early 1980s as starting birth years and the mid-1990s to early 2000s as ending birth years.

https://en.wikipedia.org/wiki/Millennials

I don't entertain any of the research that suggests Millenials were born after the mid-90s.

[Kybosh]

The early 1980s start date for millennial branding always bothered me. Those of us from that time spent a lot of our formative years without the internet and a few other things. The 1990 birthdays are quite different for that reason to be honest.

[FireGilbert]

A Millennial is anyone who turned 18 after 2000.

I am right on the edge of this but consider myself to be part of the Oregon Trail Generation:

https://en.wikipedia.org/wiki/Oregon_Trail_Generation

[Locke]

Originally Posted by FireGilbert

A Millennial is anyone who turned 18 after 2000.

I am right on the edge of this but consider myself to be part of the Oregon Trail Generation:

https://en.wikipedia.org/wiki/Oregon_Trail_Generation

Agreed.

[Sylvanfan]

Originally Posted by FireGilbert

A Millennial is anyone who turned 18 after 2000.

I am right on the edge of this but consider myself to be part of the Oregon Trail Generation:

https://en.wikipedia.org/wiki/Oregon_Trail_Generation

Yeah, I've seen Gen X and millennials associated with a number of different time frames.

At one point, I understood it to be the back end of the boom. Birth rates in the boom peaked in 1960 IIRC, and started to trail off form 61 to 66 until a defined decrease in 1967 that continues on until an increase around 1980. It's probably not too much of a stretch to suggest that the core Millennials are 1985'ish and later, and generation itself would be about 20 years. Meaning the post boomer generation is 67 to 85 or so. I'm right in the middle there so I saw computers in school, but they weren't used that regularly until I was out of high school.

I would have to think that as time goes on, each generation is likely starting families and the like on average later in life. I'm just past 40 with a 2 year old daughter....many of the other families taking kids to daycare don't look any younger than me. When I went to senior secondary school (grades 11-12), there was myself and two of my friends in grade 12 who had Dad's that were over 50 Most peoples parents were mid 40's. So for me I had parents who were both born before the baby boom. Whereas many of my friends parents were born at the front end of the boom. But it's not like they were all that different. So as much as the cohorts may be definable, I think any group of people born within 5 years of each other one way or the other can find enough common traits within those sub cohorts.

[CroFlames]

Originally Posted by Winsor_Pilates

The bothersome part of this whole discussion is that it treats things as mutually exclusive.

In reality, the cost of living and buying property is ridiculously high in many cities, many millennials waste a lot of money on stupid things, and many people have little knowledge on how to save or invest wisely.

It's really an all of the above problem.

As a millennial, I've figured out all those other things; home, saving, buying groceries, meal plan and prep, disciplined personal budget etc (I only allow myself avocado on my Chipotle burrito once a year).

But how do I learn how to invest wisely?

I'm the son of immigrates and my dad literally thinks investing means wasting (bad at English). I didn't exactly have a leg up in that department vs my peers whose dads were bankers and old stock Canadians.

Can someone teach me?

[DoubleF]

Originally Posted by CroFlames

But how do I learn how to invest wisely?

Can someone teach me?

There's a lot of factors and there's no right answer. How you invest is going to be based on how you want to invest.

The best teacher is experience. I'd suggest taking a small amount (maybe one thousand dollars), buy into something you think will be around in 10 years time and start paying attention to that stock. Once you feel you've figured out how it all works (takes a few weeks reading articles, following stock price trends etc.), decide if you want to do more. My friend did this and after a few months she said she began understanding investing conversations more.


I'm no expert, but IMO from the point of view of someone not in finance, some of the first things you need to ask yourself are:

- Do I want/need an investment advisor paying attention to my finances? I personally do my own.

- What is my risk tolerance? How much am I willing to lose? Dollar amount, percentage etc.

- Diversification. If one thing falls, others (theoretically unaffected) prop up the portfolio. It's a way to mitigate risk. Options for diversification include: collectibles which will appreciate in value, property, stocks in different industries, bonds, mutual fund GIC etc.

- Expectations. I only mention this because of people getting caught up in bad investments. If someone promises you good returns with ZERO risk, always be wary. If it's too good to be true, it probably is.

- Time frame. When will you need the money? 1-2 months, 1-2 years, 5+ years etc.

[IliketoPuck]

Originally Posted by DoubleF

There's a lot of factors and there's no right answer. How you invest is going to be based on how you want to invest.

The best teacher is experience. I'd suggest taking a small amount (maybe one thousand dollars), buy into something you think will be around in 10 years time and start paying attention to that stock. Once you feel you've figured out how it all works (takes a few weeks reading articles, following stock price trends etc.), decide if you want to do more. My friend did this and after a few months she said she began understanding investing conversations more.


I'm no expert, but IMO from the point of view of someone not in finance, some of the first things you need to ask yourself are:

Not to criticize too much, but you've (in my opinion) missed the key point in investing. What you've outlined is speculating based on market trends. Not investing.

Reading articles and analyzing trends is fine, but that makes you no more informed about a company than what the market chooses to tell you, and ultimately it will make you beholden to the market's whims.

To truly understand a company, you need to understand how they make money. By that I mean, learn the business, learn the market in which the business operates, and then understand how that particular businesses' fundamentals stack up within said market.

When all of that is analyzed, you then need to understand the management team, the company's capital structure, and how the management team stewards the capital structure to promote shareholder value first (you are becoming a part owner of a company, after all, best choose someone who has your interests first). Conversely, it will tell you if the management team is only interested in empire building and self aggrandizement.

To pick companies for investment requires substantial skill at analyzing financial statements, market economics, management teams, etc. Merely watching articles and price trends is simply gambling in a different form.

[accord1999]

Originally Posted by CroFlames

Can someone teach me?

If you don't think you'll have the skill set or discipline or time to follow the advice of the previous posters, than the other option is to look at low cost ETFs that track major indices.

[DoubleF]

Originally Posted by IliketoPuck

Not to criticize too much, but you've (in my opinion) missed the key point in investing. What you've outlined is speculating based on market trends. Not investing.

Reading articles and analyzing trends is fine, but that makes you no more informed about a company than what the market chooses to tell you, and ultimately it will make you beholden to the market's whims.

To truly understand a company, you need to understand how they make money. By that I mean, learn the business, learn the market in which the business operates, and then understand how that particular businesses' fundamentals stack up within said market.

When all of that is analyzed, you then need to understand the management team, the company's capital structure, and how the management team stewards the capital structure to promote shareholder value first (you are becoming a part owner of a company, after all, best choose someone who has your interests first). Conversely, it will tell you if the management team is only interested in empire building and self aggrandizement.

To pick companies for investment requires substantial skill at analyzing financial statements, market economics, management teams, etc. Merely watching articles and price trends is simply gambling in a different form.

I don't disagree, but I think that's just arguing semantics. I also think understanding the management team is a tad bit overkill. Furthermore, what type of investing doesn't involve speculation? I'm not arguing against doing proper due diligence, but the average person probably understands investing as using cash in a way where you expect to make more cash.

I used to suggest a bank stock with dividends as I felt it was one of the easiest companies to understand. Overly simplified, but bank charges, interest etc. aren't hard to understand to the average person. Understanding that's how they make their money to pay your dividend isn't hard either. But some other posters thought it was foolish to invest in a bank when other stocks were yielding better returns in their eyes.

Also, most individuals that ask "how do I invest" aren't clueless to other investments like rental properties. I do agree with you that they don't research proposed investments with the same care as a family home or education, but often aren't interested in doing that much work.

So in the end, what's investing to the average person? Probably, it's making money with your money using the least amount of direct effort as possible. I don't disagree with your thoughts on gambling, but I think we're one the wrong side of the fence similar in ways to the figurative way that literally is now used.

Is this accurate? Or is another millennial thing where we can't figure out the difference between invest and gamble just like they can never seem to figure out need and want or friend and acquaintance?