The money advice every millennial needs to hear

The money advice every millennial needs to hear

Rent or buy? Save or invest? Cut out the daily coffee or concentrate on the big costs?

When it comes to money, there's so much guidance out there, it can be difficult to know where to start.

So CNBC Make It took to the streets to ask millennials their biggest money questions before putting them to experts at Money 2020, annual finance conference hosted in Singapore.

Here's what the professionals had to say.

What's the best way to start investing?

Yinglian Xie, co-founder and CEO of DataVisor, tells CNBC Make It her advice on investing.

Millennials have come under criticism in recent years for their reportedly reserved approach to investing.

They are the least likely to invest in the stock market of all adult generations, according to a 2018 survey from Bankrate. When millennials have money to spare, they prefer to keep it in cash savings, the report found.

But, according to the experts, that's the wrong attitude.

"I don't know if there's one particular way I'd say to start investing your money," said Eric van Miltenburg of Silicon Valley payments platform Ripple. "I think the most important thing is to start," the senior vice president of global operations continued.

Make sure you're investing in things that you believe in.
Rohan Mahadevan
Senior vice president of international markets at PayPal

That could mean setting up a retirement fund, like a Roth IRA in the U.S., investing lump sums in an index fund, or making regular contributions to a savings and investment app like Acorns. In fact, the more you can "diversify" across different sectors, the better, said Yinglian Xie, co-founder and CEO of financial fraud detection firm DataVisor.

However, it's no use investing in something if you don't believe in it, noted PayPal's senior vice president of international markets, Rohan Mahadevan.

"Make sure you're investing in things that you believe in, as opposed to investing in things that other people believe in," said Mahadevan, who advised trying out a product or service before investing in it to better understand how the company operates.

What about alternative investments like bitcoin?

Aside from the more traditional investment vehicles, like stocks, there are also a number of alternative options. Examples of those include cryptocurrencies, such as bitcoin and ethereum, as well as real estate, precious metals and luxury goods.

Typically, such investments offer growth potential and defense against stock market fluctuations — but they often come with more risk.

In the case of cryptocurrencies, Lisa Shields, co-founder and president of financial services platform FI.SPAN, said they can offer a "great opportunity for you to learn" about different investments. She cautioned, however, that you should only "invest as much as you can lose."

Rohan Mahadevan, PayPal's senior vice president of international markets, tells CNBC Make It his philosophy on alternative investments.

Mahadevan agreed: "Don't expect to put in a buck and make a hundred."

Meanwhile, Jesse Lund, IBM's global vice president for blockchain and digital currencies, suggested physical assets with more of a proven track record.

"Call me more conservative, but I think I would advise more on tangible property, real estate, those things that seem to, over history, always have some manner of long-term appreciation."

What age should you aim to buy a house?

Real estate investment is also a pressing issue for young people, who often wonder when's best to purchase their first home.

Almost three-quarters (72 percent) of millennials list owning a home as a top priority, according to Bank of America's 2018 Homebuyer Insights Report. Yet many find themselves unable to save for a deposit for their first home while covering ever-rising rents.

The experts with whom CNBC Make It spoke agreed that property can be a great purchase — but not one to be undertaken lightly. Indeed, studies suggest as many as two-thirds of millennials who rush into property purchases wind up with buyer's remorse.

Josh Lumsden asks CNBC Make It at what age young people should look to buy their first home.

"If you're buying a house for yourself and you can afford it, then absolutely go ahead and start buying it," said Mahadevan. "But I think if it's just for the sake of parking your money and seeing whether it's going to (appreciate), then I would caution against it."

"I bought my first property at age 48," said FI.SPAN's Shields. "So my advice is (to buy) at the stage that makes sense for you and not worrying about keeping up with the Joneses."

In the meantime, however, Ripple's van Miltenburg suggested considering alternative routes, such as mutual funds and real estate investment trusts (REITS), which allow you to build a stake in the property market without buying a physical home.

What proportion of your income should you save?

Knowing exactly how much money to put toward savings and investments is a recurring issue for millennials.

The exact answer will be different for everyone, depending on their financial circumstances, noted van Miltenburg.

I'd say at least 10 to 20 percent of your income.
Eric van Miltenburg
Senior vice president of global operations at Ripple

However, he and Xie agreed 10 to 20 percent is a good starting point. "You'll thank yourself later on," said van Miltenburg.

IBM's Lund recommended "maxing out" the pre-tax investment allowance available in your given state or country.

For Mahadevan, meanwhile, the answer was more philosophical: "You want to spend as if you're going to die tomorrow, and you want to save as if you're going to live for tomorrow."

Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.

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