People think that life after receiving that diploma is just one big party. It is a time to celebrate your independence, reaching the legal drinking age and having money of your own. Life passes you by and before you know it, you hit thirty and you still have no savings. Your twenties are all about learning about being responsible. Even if you have just recently graduated from college, you should already think about investing for your future. In fact, you should always start as early as possible.
With these investment tips, you will be able to get started in securing the future that you want. With time, hard work, and the right know-how, you will be one step closer to being financially independent.
1 What are your goals?
The first step to securing you’re the financial future that you want is to see yourself in the future. Visualize what that future looks like. Each person has different financial goals in live. For some, it might be early retirement, while for other it means owning a good home. For you it might be having a comfortable lifestyle, yearly vacations, and sending your kids to an Ivy League school. Compute how much that dream will cost you in the future. Work backwards to be able to identify the way you will be able to reach those goals. Work with a financial planner if you have trouble with the numbers.
2 Protect Yourself before You Wreck Yourself
One of the most important things to remember is to protect yourself before you start building your net worth. So often, many of you think that it is not a necessary step while you are still hearty and hale in your twenties. When something unexpected happens, you would probably regret that you didn’t make any moves in protecting yourself. Protection involves purchasing insurance, such as disability or life insurance policies. Your twenties is often the best time to get life insurance because you can choose a longer payment plan. Protection also involves establishing wills or guardianships. After all, death does not choose by age.
You should also have some sort of emergency fund in place. This is money that you can tap into for unexpected events. You should always remember to save for a rainy day so that you won’t have sleepless nights trying to figure out where to get the money.
3 Retirement is closer than you think!
Many companies offer 401(k) or other retirement savings plan. This is part of your benefits and you should not let it go to waste. Even if retirement is far off and you don’t even know if you will be staying with the company for the decades to come, you should still start saving for retirement today. Join your company’s retirement plan. To be able to make the most out of it, ideally your contribution should be enough so that the company gives the maximum match.
4 Crawl before you walk… but you must walk.
Knowledge is power and this has never made so much sense. You should always be in the know when it comes to money matters. You should always be in control of your finances and not just rely on passive investment strategies. Learn about financial planning and what methods suit you. Read up on them. The internet is a wealth of resources. Read books and magazines that will guide you through the various investment vehicles available today. Go to a seminar to learn about topics that you are interested in, say, the stock market. Being knowledgeable will allow you to build your wealth more effectively and avoid being victim to various scams.
5 Be Aggressive, Be More Aggressive!
Since you are still young, you will have decades before you will end up in retirement. You will also have more disposable income since you probably do not have a family of your own right now. You can therefore take more chances with your investment strategies. This is the right time to consider being aggressive since you are more concerned with long term growth and increasing your wealth. If you do take a financial hit, you will have time to build your wealth once more.
How about you? What are your investment tips and tricks for recent college graduates?