It’s hard trying to figure out how to invest when you’re young, but that’s a good problem to have. Being willing to invest your hard-earned money so early on in your adult life shows that you know how to enjoy the moment and plan for the future. Few young adults have such foresight, but all of those qualities don’t make investment decisions any easier. Keep reading to get some ideas that will help you to make wise investments.
Build Up An Emergency Fund
One of the best investments you can make is to start a savings account designated for life’s many unexpected crises. As the saying goes, “Hope for the best and prepare for the worst.” There’s nothing like a huge hurdle popping up in your life, especially when it’s one that can be solved with money you don’t have. The only solution to that problem is to have money for those moments. The rule of thumb is that you should have living expenses for three months in your emergency fund. You also need to protect your income in case an injury or sickness forces you out of work. Find the best income protection insurance so you’ll be covered if you’re unwell and can’t cover your cost of living.
Don’t Keep Up With The Crowd
When you’re young, it’s only natural to want to keep up with the current trends. The only problem with that is that it’s one of the main enemies of your financial future. Having the latest phone and fashions will do nothing for your investment portfolio but hurt it. There’s nothing wrong with rewarding yourself, but you should never make a purchase just because a particular item is the “must-have” of the season.
Start Your Own Business
The surest investment you can make is in yourself. There are few things that give you the satisfaction that having your own business does. You should still keep your day job until your business is able to at least pay for itself and your family.
If you do quit your day job, you won’t have group health insurance coverage from your employer any longer. Cheap income protection insurance is a sound investment that will help you pay bills and stay afloat if you get hurt or sick and are unable to work. Don’t find out the hard way that it’s better to have insurance and not need it than to need it and not have it.
Part of being an entrepreneur is investing in what you’ll need to provide your customers with the best possible service. A great tool that helps you do just that is inbound call center software. It gives you the ability to provide customers with solutions around the clock when they reach out to you. Communication is the key to great customer service, and great customer service is the key to building a great business.
When you think of investing, you have to have your eyes on the future. You should always have a plan to care for yourself financially if you become unable to work or just don’t want to anymore. Annuities are a great idea if one of your primary concerns is how you will live when you retire.
Annuities guarantee that you’ll receive income regardless of what’s going on in the market and they come in two forms—term and life. A term annuity is one that makes set payments to you for a certain number of years, and a life annuity pays you for the rest of your life.
Learning how to trade individual stocks is time-consuming and confusing. If you want to get into the stock market but don’t know anything about it, then you should start off simpler. Exchange-traded funds (ETFs) are like bundles of stocks from different companies. It’s a bit like a hedge fund but without the minimum investment requirement—which makes them a great idea for new or young investors. Once you buy a share from an ETF, you instantly become a holder in some of the best-known corporations in the world.