Many young people find themselves suffering from an overabundance of advice. People from all different walks of life are telling them the best choice to make, and the decision to follow all or none of these words of wisdom can be headache-inducing.
Alternatively, some young people find themselves with absolutely no knowledge or advice about how to put themselves on firm financial footing. These individuals may have come from a family line that is notoriously poor at managing money, so they find themselves with plenty of examples of what not to do, but no ideas for the proper course of action.
The key to easing your mind about your financial future just may be found in making sound investments. Before you begin googling what “sound investments” are, take a minute to read on and develop a little know-how. Included here are a few investment tips for 20-somethings.
Plan Your Future
From a young age, you were likely planning your future. However, the future you were planning probably entailed something exciting, like a future career as a stunt double or a romantic marriage to a foreign royalty. When in reality, the future you may need to take stock of, is in finances.
Regardless of whether you love it or hate it, everyone has to have some kind of relationship with money. It is best to go into it on a good terms, and the key to this can be through planning your future.
Taking a look at your financial future can be as simple as beginning with checking your account balance. Is your savings account filling up regularly? Or are you a little depressed and disappointed with the contents of your wallet? Look at how much you are spending, saving and investing right now. Is it the best you can do?
After evaluating your current situation, look at where you want to be. Where do you see yourself living? Do you want to be able to support a family? Figuring out a general idea of these costs can help you develop a future financial plan. Knowing what it will take to establish your goals is the first step towards getting your ducks in a row.
Gain Interest in Investing
One of the biggest killers of financial futures is ignorance. Not knowing what options are best and available to you can destroy any hope you have of managing your finances. Begin researching how bonds, stocks, ETFs, and mutual funds work. Knowing the risks and benefits of each investment can help you understand your options.
Once you have researched your investment options, you may find one that is especially appealing or makes sense to you. Begin investing there and be sure to stick out the initial rises and falls of the market. If “buy and hold” doesn’t appeal to you, research other options that offer greater diversity and change.
Focus on the Future
Beginning investors likely do not have a complete grasp on the complicated world of investing and that is okay. A great deal of learning can happen as your investment portfolio develops and you learn through trial and error. The main thing to remember is to be focused on the future. Don’t get involved in narrow or volatile funds while you are just beginning.
Remember, all growth is going to take time, but getting involved in your 20s can give you a great headstart. For a simple beginning, find a discount broker and open an account with an automatic investment plan. Your bank can send the cash straight to your broker and you can get started, sometimes with only as much as $50! Upon reaching $5,000, you will likely need to think about diversifying, but that can wait; investing is all about getting your feet wet and learning as you go.