What Brexit Means for the Average Millennial

Brexit.  The term has been all over the media for the past few days.  Brexit is the affectionate term for British voters voting in favor of leaving the European Union which took place Friday, June 24th.  Although it may take 2 years for Britain to officially leave the European Union, there has been speculation about the immediate and long term effects.  If you are like me, you may be wondering what Brexit means to you.  Don’t worry, I’ll tell you.

What Brexit Means for the AverageMillennial

 

Your Retirement

Have you looked at your 401k or IRA accounts since Friday? If not, I would wait a few weeks.  On Friday, the Dow Jones fell 611.21 points or 3.39% and the S&P 500 lost 76.2 points or 3.6%.  That means there is a good chance that your retirement account may have taken a dip as well.

The good news is that as millennials we have 30+ years until retirement.  The market took an even larger dive after September 11, 2001, and recovered. The first day the market opened after 9/11, the Dow Jones dropped 684 points or a 7.1% decline.  No more than one month after that decline, the market was back to pre-September 11 levels.  Therefore, stay the course and focusing on investing regularly and for the long term.

Investments

Have you been waiting for the right time to invest in mutual funds or stocks?  If so, it is a great time to invest new money in to the market.  Too often people take their money out when a big drop happens due to fear of losing even more money.  When the market isn’t doing as well, it is like getting a sale on certain stocks and mutual funds.

However, before you go investing your life savings keep a few things in mind:

  • Make sure you only invest money that you won’t need for a while (3 years at minimum) and that you aren’t afraid to lose.  Investing in the market is not FDIC insured like your savings or checking account most likely is.
  • Before you start invest, ensure that you have a fully funded emergency fund.  In case of an emergency, you will need liquid assets.
  • Do plenty of research before diving in to the market.  Just because a stock or mutual fund is down, doesn’t mean it is a good buy for the future or your specific situation.  Look at stocks that have good future promise and/or a product that you use regular and will be glad to hold stock in.  If you work with a financial adviser, talk to him or her about potential companies.

Mortgage

There is speculation that Brexit could push interest rates to “historic lows.”  Good news if you are in the market for a new home or are considering re-financing your home.  In the past month alone, 30-year fixed mortgage rates have fallen to around 3.7% which is nearly a 3 year low.  Many economists have speculated that Brexit will drive rates even lower.

Travel

You are in luck if you have a trip planned to London in the next few months.  The pound has fallen to its lowest level in more than 30 years which means the U.S. dollar will go a lot further.  Some travel enthusiasts have even suggested converting some U.S. Dollars to Pounds for upcoming trips in the event the pound rebounds sooner than later.  Right now, United has posted a 3-day sale to Europe with as low as $550 round trip flights.   So keep your eyes peeled on the #1 flight search engine for similar deals.  Websites like airfarewatchdog have cited a 54% increase in searches for flights to Europe from the U.S..  Keep that in mind as flight deals to Europe won’t last long!

The verdict is still out as to if the effects will be longer term.  Many stocks of airline companies have taken a tumble which may be a good sign of lower flights longer. 

What Brexit Means for theAverage Millennial

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30 comments

    1. No problem ! Hopefully it’s helpful if you’re in the market for refinancing or a new purchase.

  1. That’s really good news about mortgage rates. The housing market has skyrocketed in Nashville but this gives me hope that we’ll be able to afford a home soon.

    1. Good luck on your home buying process! It is def good news for anyone in the market for a new place.

  2. Wow you’re right the pound is so low and so is the euro. This would be the perfect summer to go to Europe! I remember the last time I went I exchanged $100 and got 50E back, I lost half my money!

  3. It’s funny how something thousands of miles away can effect us here. This is where you just have to trust God to take care of you.

  4. Very interesting! I’d be happy to see the interest rates drop since I’m starting to house hunt! I hope overall this ends up being a good thing though.

  5. This is a wonderful break down of how Brexit will affect millennials financially. You did a terrific job covering all the necessary areas of finance!

  6. Once I heard of the Brexit, I automatically thought travel and investments. It’s crazy how low the pound and Euro are now.

  7. I can’t believe the pound is that low right now. I’d love to just hop on a plane and fly to London…

  8. Well thank you for the break down. You really have no idea how things affect you individually unless someone tells you.

  9. This is a great reminder that even though countries are miles apart, we’re still inter-connected.

  10. Honestly, I didn’t even consider how this might effect me. London is one of my favorite cities so I definitely need to consider getting some pounds now and saving them for my next visit! Thanks so much for sharing this.

    LiveLifeWell,
    Allison

    1. Yes! I read an article recently that many currency exchange services in the US are running out of pounds due to Brexit.

  11. It’s crazy how something in Britain could effect things here in the US as well. The advantages it would bring are something to look forward to and pray the rest works out.

  12. I was wondering about all of this and my friend that I normally make expalin stuff like this to me is on vacay. Thank you. I hope the mortgage rates to drop if only for a minute so i can sell my house that is on the market and possibly refinance the other. I’d really be winning!!!

  13. A coworker is traveling to London this weekend. She’ll have fun. I took advantage of mortgage rates dropping some years ago…love saving money.

    1. That is awesome that your coworker is traveling to London now. It is prime time to take advantage of the exchange rate.

  14. Mortgage rates will go down, wow, who knew? It’s kind of relieving since we’ll be looking to buy in the next few years. Hopefully rates will be in our favor by then.

  15. I certainly had my eye on mortgage rates, they were actually pretty good before all of this. The lower interest rates were good, but they will be even better now. I totally plan to take advantage since we were looking anyway.

  16. These are all good points. Looks like I need to plan a trip soon. I’ve always wanted to visit London. ? Thanks for sharing.

  17. Nice overview. I think Brexit overall will be a positive thing for most millennials (if we are talking on a global scale). I honestly think the stock market will “correct” itself relatively quickly and even people who are nearing retirement have nothing to worry about as far as lost investment value.

  18. To be honest the only thing about the Brexit situation that resonated with me was the strength of the American dollar if I visit London. Thats cool but I guess I will be excited once I visit…I dont have a planned trip for there this year.

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