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How can millennials create a healthy financial portfolio?

Oftentimes the term “financial portfolio” is used by professionals and experts in the field, but the average person probably wouldn’t be able to tell you what a financial portfolio is or what it consists of. Frankly, everyone has a financial portfolio, whether they know it or not. It’s simply a collection of all your assets that range from stocks, bonds (government and corporate), mutual funds, cash, your car and real estate. In essence, it is the sum of your assets, which are anything that adds to your net worth. Pretty simple.

The good thing about a financial portfolio is that, no matter your economic status in life, it is important to continue building on it. For millennials, we all have a dream about our lives and where we want to go. Most of us know where we want to live, what we want to drive and the kind of life we want for our family. But most millennials haven’t stopped to calculate exactly what it would cost in financial terms, to achieve that desired lifestyle.

So, let’s find out what’s in your financial portfolio:

Take out a pen, and make a list of everything you own. List all of your assets, but include their dollar value. Once that is done, write down everything you owe. These are called your liabilities. They include things like student loans, credit card debt, car loans and other consumer loans. You must be brutally honest with yourself and don’t keep anything off the list because you think it isn’t a liability. After you have done this you can determine your net worth by adding all of your assets and then simply subtracting all of the liabilities. Once that information is calculated precisely, here are three essentials to creating a healthy financial portfolio.

Firstly, remember why you decided to find out the health of your financial portfolio. Your reasoning for creating a healthy financial portfolio is very personal and should only be shared with an accredited financial planner or advisor who is objective and places your goals first. It could be to help your wife, children and in the future your grandchildren. It could also be to travel and enjoy a comfortable and worry-free retirement or even launch a new career or your own business.

Secondly, you must ensure that your portfolio is very diverse. Don’t make the classic mistake of buying all of the same kind of investment products. So mix it up and purchase a small percentage of stocks in different companies, like those in the utilities, financial or energy sectors. By adding diversification, you reduce the risk. After that, investing in a relatively safe investment product like a mutual fund would be ideal. It’s like the age-old saying, ‘Don’t put all of your eggs in one basket’. One of the safest and most reliable investments has always been real estate. The problem facing most millennials in The Bahamas now is the cost of quality real estate. Most millennials are priced out of the market and won’t be able to place this kind of investment in their portfolio without parental assistance or through a combined investment in the form of a marriage.

Lastly, stay the course. This is sometimes the hardest thing to do with creating a financial portfolio, but the key to success is making intelligent decisions and sticking to the three essentials of creating a financial portfolio. There is nothing magical about wealth building. It is achieved through a culmination of small and disciplined choices. A good portfolio fits your own style and taste, which is unique to every person. A wise man once said you must keep your mind on the bigger goal to protect your true wants from your casual desires.


  • Quinton C. Lightbourne is a certified financial planner with the Chartered Institute of Bankers in Scotland and presently works with the investment and financial services team of a local law firm.


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