By Steve Onwuka
You’ve graduated from school, you’re working full-time, and you may even have your own place (or share one with roommates who aren’t your parents). Regardless of the fact that you’ve been technically an adult since the day you turned 18, many young adults don’t truly feel like they’re “adulting” until they begin investing their money.
Unfortunately, the reality is that most young adults would like to begin investing and saving for retirement but have no idea where to start. We’ve created a crash course to help young investors make the most out of their money.
Tip #1: Invest in yourself:
Regardless of what turns the global market takes, there is one aspect of your life where you have total control; that is the investments you make in yourself. When you invest in yourself, you can never lose.
If you’re in your 20’s, then this is the best time to return to class, earn an essential certification that could propel your career, or start over in an industry you’ve always appreciated.
Tip #2: Unleash the Power of Compound Interest by investing early:
Online checking and savings accounts are standouts amongst the best short term investments for a few reasons. Compound interest is the sort of interest you collect when the interest you gain on your funds or investments starts to compound on itself.
“Compound interest is the most dominant power known to man,” says financial planner Jude Wilson of Wilson Group Financial. However, note that its power comes with time – time you’ll squander in the event that you don’t begin investing when you’re youthful.
If you want to be financially free in the future, you need to tackle this power and set it to work. In the event that you don’t, you’ll pass up increases you can never get back.
Tip #3: Buying a Land:
Traditional financial wisdom has normally dictated that real estate is one of the best investments you can make. Many grown-ups who rent properties believe that they should purchase a home as quickly as time permits. All things considered, if the price of rent and a monthly mortgage are comparable, why not own the property? Unfortunately, the rent vs buy banter is about something beyond the monthly mortgage price—owning a house is a significant investment and one that ought not to be toyed with. One thing to remember is that real estate appreciates not depreciates.
Tip #4: Debt elimination
Debt does nothing to support your financial circumstance—and whenever left unchecked, gathering interest can cause those owing debts to pay at times twice their main principal when the debt is repaid. On the off chance that you have a student loan, an outstanding student loan, or an unpaid credit card balance, paying it off can set you up to viably meeting your investment objectives.
The best guide for youths is for them to invest less energy agonizing over the following hot stock and more time worrying over crucial ways of spending habits, debt, savings, and budgeting.
While repaying your debts isn’t an investment in the traditional sense, eliminating your debts will set you up to be in the best possible position to spare more later on.
The best investment choice that you can make as a youthful grown-up is to save frequently and early, and to figure out how to live within your means. Securing more cash now and finding out about your investment alternatives will balance you for a financially related achievement later on.
What you invest in matters less than the fact that you have decided to invest. The right investments for you are going to depend largely upon your personal investment objectives, risk tolerance, and time horizon.
Steve Onwuka is the Community Manager at Korapay.