Best Investments For Gen-Y Australians in 2023?

While baby boomers have a net wealth of more than four times greater than their children, Gen-Y or Millennials, Gen-Y was primarily priced out of the property market and stagnated in wealth. To give you an idea of the difference between the two generations, Boomers make up just 12% of the population but account for 27% of household wealth. Conversely, Gen-Y makes up 15% of the population with 7% of the household wealth.

With age comes the benefit of hindsight, but Gen-Y Australians have the gift of foresight right now. Of course, everything is expensive, but investing proposes an alternative path for Gen-Y to feather their nests.

Making wise decisions

Before you invest, make sure you have the funds to do so. You want to keep your budget tight enough and struggle with debt. You can look at investment options if your finances are stable enough to set aside one hundred dollars or more.

There are endless ways to invest, and as helpful as a financial adviser is, only some can incur that extra cost. An adviser can help you identify a suitable investment for your circumstances. They can also keep you right in terms of tax requirements. For example, you must pay taxes on capital gains, whether you invest in shares or crypto — and crypto tax in Australia can be quite complicated.

Cryptocurrency

Crypto is a popular investment option for Gen-Y, and there are many reasons for this. It is a highly volatile investment option but can pay out quite radically if you have a high-risk tolerance. It would help if you decided whether to invest using an exchange or working with a broker.

An exchange is simply a website that facilitates buyers and sellers to make sales, trades, or purchases. So, if you choose to invest in crypto, you can list it on an exchange when you're ready to sell. An exchange will generally have far more cryptocurrencies listed, with some offering over 50 and others over 1,000.

Shares

Shares are the most common entry point for new investors. You can purchase shares of any company listed on the ASX and if those shares increase in value, so do your shares. Though it's a common entry point, it is a high-risk route and incredibly speculative.

Any unexpected event, whether it's a mistimed tweet from the CEO or a scandal, can radically alter the value of a company. The buy low, sell high phrase is used so commonly in modern media and is an excellent example of how to succeed. Or, as Warren Buffett famously once said, “Be fearful when others are greedy, and be greedy when others are fearful.

Bonds

While not the same as shares, bonds are considered to be a risk-free defensive investment offering a safe route in Australia. You can invest in a government bond option or corporate bonds. Government bonds are effectively a loan. The government is borrowing money and paying you interest for pleasure.

There isn't a lot of growth potential, but it's a safe long-term investment. If you want a bond that offers a higher return, you can go down the corporate bond route. There is a much greater risk with this. However, if something happens to the company, your investment is gone. So, corporate bonds are somewhat similar in risk to shares.

Superannuation

Your super is an excellent investment option, especially if you are saving for retirement. But it's also an effective way to save money for a deposit on a home if you are a first-time buyer. So first things first, find out just how many super funds you have and consolidate them all into just one super. This can help you create a more compelling investment strategy and reduce the fees you pay.

Managed funds

There is a lot to appreciate about managed funds. The biggest one is perhaps someone else will manage the investment on your behalf. Another significant benefit is that the investment fees are lower than many other options. In this situation, an adviser will decide which stocks to buy and sell based on your profile. That doesn't mean any old option will do — be sure to do some research to find a managed fund that meets your goals and risk profile.

Joining the investment world can be a complicated game, and you can only expect to succeed if you first consider your needs and financial interests. Property investment could be an excellent option if you have more funds available. If you don't, then bonds might feel more your speed.