Locked out of property market? Five better places for Millennials to put money

Locked out of property market? Five better places for Millennials to put money

By Clayton Howes – CEO of MoneyMe

Life sucks for an aspiring property owner right now. You probably already know that the average price of a house in Australia ($656,800) is several (eight) times that of the average full-time yearly income ($78,832). You’ve probably already heard that in the past five years alone, wages have grown significantly slower (13 per cent) than house prices (41 per cent), especially if that house is in Sydney (70 per cent).

It’s enough to make you want to drown your sorrows in the most expensive smashed avo and latte combo available!

But honestly – enough, already. If you’re as bored as I am of this never-ending stream of bad news, it might be nice to know that there are many other options. Property is but one asset class, and there are many other things you can do with your money in 2017 instead.

Below are five better places to put your money as a young Australian in 2017.

1) Financial markets

Once upon a time, financial markets were for high-net-worth individuals with an advanced understanding of financial markets, or access to specialist advice. But with the rise of fintech and robo-advice, entry barriers are disappearing rapidly.

Apps such as Acorns or Stockspot allow users to invest small amounts of cash at very low cost – just a few dollars a month in some cases. This cash is then invested into diversified portfolios of exchange-traded funds (ETFs) on your behalf, using pre-determined mathematical rules and algorithms.

This means no expensive financial experts, or meticulously following the markets yourself. Estimated returns may reach as high as 10 per cent, according to some commentators, though of course there are no guarantees.

2) Marketplace investing

Another investment opportunity emerging with the rise of fintech is peer-to-peer (P2P) or marketplace lending. In P2P, investors are connected directly to borrowers via an online platform. This is said to give borrowers a better rate and investors a greater return, by cutting out the banking middle man.

Becoming a P2P investor is extremely simple. You input a few details into an online form, such as your preferred credit grade, loan term, and maximum amount you wish to invest in any one loan. The algorithm then does the rest on your behalf, and some lenders claim returns as high as 12 per cent per annum.

 

To read more, please click on the link below…

Source: Locked out of property market? Five better places for Millennials to put money – The Sydney Morning Herald

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