CCMP Capital is an extremely successful NY based private equity investment firm. It’s success can largely be attributed to former CEO and President Stephen Murray. Stephen Murray CCMP Capital was a great leader whose unique leadership style allowed CCMP Capital to go beyond the usual benchmarks of efficiency. The firm also happened to hire a number of great professionals during his tenure and the benefits of that move are still being experienced by CCMP Capital. What CCMP Capital learnt from Stephen Murray is working at their best but having contingency plans for the worst.
Here are some things that the professionals of CCMP Capital would like millennials to know –
Savings Accounts Pay Nothing But Retirement Accounts Do – A lot of millennials allow money to collect in their savings account and call it “investment” but CCMP Capital professionals disagree. The interest rate on savings account is so low (often close to 1%) that the money simply does not multiply at the rate that it should. Instead, it is recommended that millennials divert that money to 401(k) or other retirement funds that would earn enough interest. IRA is another good option for millennials to choose.
Millennials Need To Outpace Inflation By Investing – The inflation rate is slightly increasing every year. As such, the money in the bank (and under the mattress) of millennials amounts to less and less every year. This means that these people who are under 25 years need to find an investment solution that would grow their money at a rate faster than the inflation rates.
Any Investment Carries Risk – A lot of millennials think that investing is a bad idea because there is too much risk. Some millennials believe that there are certain options with absolutely no risk. Both these groups are wrong because every investment carries risk but that doesn’t mean that investing should be avoided. One thing CCMP Capital experts say is this – without risk, there would be no growth. Money multiplies because there is a certain amount of risk involved. Higher the risk, higher the returns. Lower the risk, lower the returns. This is why savings accounts pay so little – they carry minimal risk.
Diversification Is Important – It is necessary for millennials to understand that they cannot put all their eggs in one basket, say professionals at CCMP Capital. Their portfolio needs to be diversified in such a way that the millennials are protected against any downward turns of the market. This means that there should be some safe securities, a bunch of medium risk securities and a couple of high risk securities as well.
These tips would help millennials kickstart their investment journey.