How to invest: Zen and the art of maintaining your young people’s finances

20 Dec

Let’s face it: in a historical period dominated by uncertainty, saving is not easy , and the bad news is that it is even more difficult if you are young .

‘How to invest’ your savings is therefore not among the priority questions of many young people, and instead we explain why it should be and how to do it.

Accomplices the time of entry into the world of work that have lengthened a lot, the entry into the world of work is not very simple and the fact that where you can-enter the notorious “world of work” – the work itself is then often precarious and poorly paid, for the youth of today the scenario of the world of savings is not at all comforting .

 

But the good news is that Italians are par excellence a people of savers , with higher family savings rates than those of other developed countries. And so: do you want to have not learned from mom and dad?

Of course, you will say, but who are these investors and savers? Will not always the usual Italian dinosaurs?

This is also a good point: looking more closely at the audience and the composition of the investor population and looking, for example, Assogestioni data on Italian mutual fund investors (we referred to this research because mutual funds are widespread financial instruments). and accessible also for small savers) it is noted that young adults under the age of 45 are only 25% of the total subscribers , with a total amount of 13% of the total.

 

The figure speaks for itself, but is even more exemplary when compared with the statistics of over 65 subscribers : they are 34% of the total subscribers and hold a portion of managed assets that is 46% of the total!

 

In short: young Italians are those who should have every interest in finding out how to invest and diversify their returns. Those with respect to their parents will have a much smaller pension, a very long time horizon that would facilitate long-term investments and, given the poorly paid work of which before, they should be interested in putting aside a small nest egg to be built over time .

 

Yet the numbers of Assogestioni say exactly the opposite, and this certainly affects the economic crisis that more than anything has impacted on young people and their entry into the world of work. But the experience should not be underestimated – or better still: the lack of experience – and the lack of familiarity of young people with banks, promoters and various financial advisors .

And the other part of the “barricade” is not far behind: the same banks and financial advisors are not very familiar with the target of young people , with portfolios of products not very flexible and suitable for the needs and income of the young; and moreover with languages ​​and industry jargons (the famous and so much reviled “bancarese”) often not very understandable for those who have never faced in this area.

 

How to invest in young people: first of all we start saving

But before asking “How to invest?” When we are young, let’s take a step back and start with a much more basic activity, that is to save.

 

As one of our young investors advised in an interview on our blog , taking care of their finances is something that should not be postponed and start saving as soon as possible : “I advise anyone to actively take care of their finances and start saving immediately, from the first job. Needless to waste time and money: actively take care of it and make it grow, just like a child! “.

 

You do not need big figures but little daily efforts.

 

The story of the cicada and the ant that told us as children (all sooner or later we passed from the question: ” And you? Are you more cicada or more ant? “) Is exemplary: just collect and put aside something every day to not find yourself in the summer … oops, retirement, not having sufficient resources.

 

Even a small monthly fee cut out from the salary , of what survives between mortgages, bills and so on and so forth.

And then it would be enough to put aside some birthday or Christmas gifts (we know that grandparents – the famous savers of which they do not exceed in fantasy in gifts), or be careful in daily life to small businesses that can significantly help to save : the shared car or the bus instead of the personal one, the breakfast at home and not at the bar (as grandma used to say, € 1 saved per day is more than € 350 at the end of the year!), or even the comparators to choose the cheapest flights and another series of tips that David had collected in our blog to help us save day after day: give us an eye, neo-savers!

 

These are small figures that only with time and a little at a time can grow and form the basis for more important forms of savings , to buy a house or to protect themselves in view of retirement.

 

In addition to putting money after coin as Uncle Scrooge, another tip to start saving is to be aware of your expenses .

Between coffee at the bar or after-work drinks, lunch with colleagues or gasoline for the car, we often spend money without actually realizing their impact on our “reserves”.

 

And therefore even just being aware of it is a first step and then understanding where to intervene and how and what to eventually rationalize.

 

Drawing up your personal budget , with monthly income and expenses, allows you to understand what activities and products mainly absorb our resources. We can pigeon-hole everything into spending items (bills, mortgage, rent, shopping, catering, sports, wellness, tech, transportation, culture …) and understand which are more substantial than our expectations and which ones can try to cut and save. For example, if we realize that we spend a lot in catering, aperitifs and dinners out with friends or colleagues, the first step will be to reduce these activities to try to limit the relative item of expenditure.

 

Managing and organizing the personal budget allows not only to limit the items of expenditure, indicating what to cut and what not, but also leads to more conscious spending , helping to optimize the outputs and make choices more in line with needs and needs that weighted with purchases and compulsive needs.

 

Today there are many online tools to help manage budgets and economic resources and in this, we have to admit, young people are clearly advantaged: because of the propensity to use technologies that pervasiveness of the latter, it is natural to do everything through their own smartphone … so why not get help from your phone to manage and organize your savings better?

 

How to invest in young people: 6 out of 10 boys use app for financial services

And of course we do not just say that young people are inclined to use technology and apps: according to the research ” Stethoscope – The feeling of Italian policyholders ” conducted by the research institute MPS Evolving Marketing Research on behalf of Quixa – the insurance company online – for young people the approach to the world of finance almost always takes place through an app .

 

60.5% of young respondents – aged between 25 and 34 years – said they used at least one smartphone or tablet application to manage their current account or home banking, insurance or other financial services : respondents also emphasized a great interest in fintech applications.

In short, despite the initial data of Assogestioni, it seems that young people certainly feel far from traditional financial institutions (banks, branches, files and delays) but that they know very well tools that increasingly adapt to their needs and that can help them manage their finances.

How to say “The money in the wallet no, but the app in the phone to manage them!”.

And it is important to note this, because as Goldman Sachs’ “Millennials – Coming of Age” research points out , the way they work (or not work), consume, save and share will have a considerable impact on global economies: ” this is one of the greatest generations in history and in the next 5 years it will appear on the market with a spending capacity able to reshape the economy; their experiences will change the way we buy and sell, forcing companies to look at how they have been doing business for decades . “

 

How to invest in young people: some apps to better manage your finances

So if the apps are the key to saving money, we have also conducted a small survey – in-house with our team – asking to have on their mobile app to manage their money and what the pros and cons .

The most curious thing? Three out of three of the people who use them are developers: in short, at least in the world of ani there is an axis-developer much more likely to save than the rest of the team!

And each of them uses different apps, underlining the heterogeneity and the wide variety of tools available in the savings management sector.

 

Below is a brief review of the apps recommended by our devs:

  • Matteo has been using it for quite a while and recommends youneedabudget.com . He explained that the most obvious advantage is the ability to keep track of what you spend , so ” you realize how much money you normally leave without you even noticing! “. The slogan of the app is “give a job to every dollar”, and Matthew finds it particularly fitting: “in practice you realize how much you have available and the fact that if you have 1000 € but within two weeks you have to pay 500 of insurance in fact you have € 500 available because the other € 500 already have a “job” “. Matteo finds this feature very useful because it not only measures and tracks what he and his family spend, but also manages to create a budget in which he inserts categories and assigns the necessary money to each of them, thus eliminating stress from deadlines and miscellaneous expenses . Then, as often happens, ” the boiler breaks and you could not predict it: but the careful management of all entries and exits allows you to get there without water to the throat! “. There is no lack of cons: ” entering the mentality is not immediate and requires a little self-training, and like any similar tool requires consistency to the limit of the maniacal to make 100% “.
  • Enrico instead started for some time to use CashTrails , which only serves to track expenses . And this, Enrico told us, does it very well: it allows you to enter very quickly all the items of expenditure and provides reports as fast, flexible and powerful, with the ability to also apply filters and export all in Excel, for example (for lovers of the genre;). Unlike the tool used by Matteo, the one that uses Enrico does not allow you to make a budget and above all does not have an immediate synchronization so that using the same account in the family with more subscriptions and registrations is not easy.
  • Francesco is instead a Toshl -addicted: he advises it without hesitation because ” once every day you make the effort to consider the costs of day-by-day in relation to your monthly income, then it is natural to make some thoughts before even tackling certain expenses. This is not just an app, but a methodology. And like any method then it helps you to shape a mental discipline, educating to a culture of savings that will then become natural! “. Toshl is free in the pro version, has a clear interface, clean and without too many frills, which in a very simple way allows you to keep track of the progress of their resources. You can set an alarm that every day reminds you to enter the expenses of the last 24 hours, you can set maximum budget and you can tag every single expense with personalized items (our Francis has set “travel”, “crossfit”, “books “,” Tech “,” home “,” gardening “…) that allow you to generate budgets spent per single voice, to understand what to work or save.

 

Certainly the app proposals do not exhaust the entire world of applications in the world of finance and savings, but are a good way to start figuring out how to save and then move on to the next phase, and understand how to invest what you have managed to put aside.

 

How to invest from young € 1,000: why not consider the alternatives and start from social lending?

We want to be optimistic and to think that with the advice given above and through a careful management of at least one year of your finances you can manage to put aside a small nest egg and then ask yourself “how to invest € 1,000”. At that point what to do? Take them to the bank or put them in the safe?

We advise you to start investing in private loans for at least 3 reasons (then if you want more, we invite you to read this article on the advantages and the beauty of social lending ):

  • it’s useful : with you lend money to other people to help them realize their life projects and therefore you always know where your money goes;
  • it’s safe : thanks to our team we have a strong experience in risk management; the money falls monthly through the installments of those who requested a loan and in addition we invented the guarantee of return (so if a loan is insolvent and you have agreed by giving up part of the return the payment is still repaid, including capital and interest);
  • it is advantageous : it allows to obtain expected gross annual returns from 5 to 7% , and you can also invest with Guarantee (in that case the yield is lowered to 4%).

With it is possible to invest, even from € 10, at extremely low costs and with significantly higher returns than those offered by other traditional investment instruments.

In addition, with time is saved : all the processes of registration to our platform, investment and control of investment trends take place online. The registration, in particular, is 100% online and even the signing of the contract is digital (with sending of OTP code via SMS), without forcing you to go to the bank, look for the most suitable interlocutor and waste time with paperwork and various bureaucracy .

is also totally flexible: you can invest from € 10 to € 50,000 , how much and from wherever you want, from home, in the office or on the tram simply by accessing your personal area from your smartphone or tablet. There are no recurring obligations or keeping your capital firm for a certain amount of time : you are free to invest and disinvest at any time (and you can also sell investments already committed, if you want to access liquidity immediately) through an economic platform (we hold only 10% of returns, leaving the remaining 90% to investors), transparent, remunerative and 100% online .