In today’s economy and business environment, a changing of the guard is taking place. There are new ways of making money and new ways people are spending it. Investors are faced with two options in this changing marketplace: Adapt and profit or resist and fade.
There are fortunes being made in ways that seem unimaginable to even the most millennial of millennials. One of the perfect examples of this is a 7-year-old named Ryan, of the Ryan ToysReview YouTube channel. In 2018 he has estimated earnings of $22 million. His “job” is creating videos of playing with toys and posting them to YouTube. As the views roll in, Google sends him a piece of the advertising revenue his videos create based on their algorithms.
While not everyone will be a YouTube star or get paid for sponsored Instagram posts, it goes to show that the American creativity and entrepreneurial spirit is alive and well. We can all debate whether this is productive for the economy, but I believe it shows a deeper trend that investors need to recognize.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Ryan is the New Age version of the Mickey Mouse Club kids. Media is changing, and as things go more digital the shifts in trends will trickle down to 401(k)s and investment accounts. The old way of creating and distributing entertainment is fading, and new forms are gaining in popularity.
Industries upended by speedy innovation
The same is true of other industries that are in the middle of major disruptions. Uber is changing the way we get around. Taxi cab medallions in New York City that once traded for over $1 million are now changing hands for under $200,000. Hotels are competing with private homes via Airbnb. Automobiles are going driverless and gas-less.
Changing trends and consumer tastes are nothing new. Technological advancement is also nothing new. Here is what is new about today’s economy and what investors need to be ready to react to: The timetable.
The speed with which entire industries are being upended is alarmingly fast when compared to the economic landscape of even just a decade ago. It took 75 years for the telephone to reach 50 million users. The radio then came along, and it only took 38 years to reach the same 50 million users. TV was next, and it took 13 years.
When we entered the age of the internet, it took four years. One of the most interesting adoption rates in recent history is the speed in which Pokémon Go reached 50 million users: just 19 days.
What this means for investors
Am I saying you should quit your day job and post pictures on Instagram professionally? Or that you should invest all of your money in Google or the parent company of Pokémon Go? Of course not.
What I am suggesting is if you are a stock investor, it is ever more important to keep your finger on the button and be prepared to quickly navigate the extreme pace that business is moving. It will only get faster.
If you do not have the time, expertise or inclination to create and implement a well thought out portfolio, then find someone who does. Indexes can work as well, but indexes are also forced to own the soon-to-be-outdated companies. They must hold the losers in this economy as well as the future winners.
Based on this, here are some key takeaways for investors:
- If you are holding on to a stock of a company that looks like it might be antiquated, consider changing up your investment strategy.
- Take only as much risk as you can afford and stomach.
- Keep in mind that things continue to change and will do so at an increasingly faster rate. Bring in some extra help if you need it to attempt to make sense of your investments and how they fit into your goals.
The millennial economy is always changing, so pay attention to industry innovation when making your latest investment decisions.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through SFG Wealth Management, a registered investment advisor. SFG Wealth Management and Synergy Financial Group are separate entities from LPL Financial.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
-
Three Veterans Charities to Support As Charitable Season StartsIf you're looking for a worthwhile cause to support for Veterans Day and beyond, consider these three highly rated charities that support veterans and their families.
-
Your Estate Plan Isn't Complete Until You've Done These StepsCongratulations on getting your estate plan in order. Now, you need to communicate the relevant details to ensure your plan is effectively carried out.
-
Your Estate Plan Isn't 'Done' Until You've Completed These Five Steps, From an Estate Planning Attorney
Congratulations on getting your estate plan in order. Now, you need to communicate the relevant details to ensure your plan is effectively carried out.
-
A Nightmare for Parents: How to Navigate the Legal Boundaries of Tenant Rights During a Family CrisisThis family's story illustrates how important it is to get help sooner rather than later and highlights the complexities of tenant rights and legal protections.
-
Eight Steps to Help Get You Through the Open Enrollment Jungle at WorkWondering how to survive open enrollment this year? Arm yourself with these tools to cut through the process and get the best workplace benefits for you.
-
Seven Moves for High-Net-Worth People to Make Before End of 2025, From a Financial PlannerIt's time to focus on how they can potentially reduce their taxes, align their finances with family goals and build their financial confidence for the new year.
-
I'm a Financial Planner: These Are the Seven Tiers of Retirement Well-BeingLet's apply Maslow's hierarchy of needs to financial planning to create a guide for ranking financial priorities.
-
Why More Americans Are Redefining Retirement, Just Like I DidRetirement readiness requires more than just money. You have a lot of decisions to make about what kind of life you want to live and how to make it happen.
-
A Compelling Case for Why Property Investing Reigns Supreme, From a Real Estate Investing ProInvestment data show real estate's superior risk-adjusted returns and unprecedented tax advantages through strategies like 1031 exchanges and opportunity zones.
-
Are You Retired? Here's How to Drop the Guilt and Spend Your Nest EggTransitioning from a lifetime of diligent saving to enjoying your wealth in retirement tends to be riddled with guilt, but it doesn't have to be that way.
