The pandemic that’s been raging on for over a year now shone the light on the economic vulnerability of even the world’s superpowers. The crisis likewise made it clear that things can go bad financially-wise almost overnight. It’s not too much to say that millions, even billions, of people worldwide were caught by surprise just how disruptive and devastating the COVID-19 pandemic would turn out to be.
For sure, you’ve witnessed or experienced first-hand the financial and emotional toll that the ongoing crisis has brought to people. If what you’ve seen or experienced has made you worry about your financial future, you should not see it as a sign of weakness but an indication of maturity. The only logical thing for you to do right now is to find ways to put your financial dealings in order and start making some wise investments to protect your financial future.
Here are five excellent investments you should be starting right now while you’re still young:
Look forward to your retirement.
While it may seem a premature move, you should actually begin planning for retirement once you start earning money — such as right now. You have to realize that the money you’ll be spending during your retirement is not a small amount since you’ll have to take care of several expenses such as hospitalization, food, medicine, and several other things. In short, you must build-up a retirement fund and begin laying down the foundations for a hassle-free retirement period.
To do this, you should seek help from a licensed financial planner who specializes in handling retirement plans for clients. Your adviser will help you answer critical questions that will determine how your personal retirement plan will look like, including your savings strategy and timeline.
Get a home.
For many Americans, owning a home is among the biggest achievements they could possibly make. With the high price tags of rents in cities and suburban areas, living in a place that one owns without worrying about eviction or being homeless is a simple joy especially if a person already has a family.
As such, be sure to gradually save up or apply for a home mortgage when your financial status already allows it. This is one investment that will work to your advantage since you can have a ready place to start a family. If life turns out to have a different plan for you, you can always turn your home into a rental property or put it on the market. In short, it’s an investment that has a lot of positive sides to it, which makes it worthwhile.
Pay off your debts.
Back in 2019, the average student debt was pegged at close to $33,000. Additionally, young people have other outstanding debts to their names: car loans and credit card debts among the common ones. If you happen to have some debts of your own, you may consider it as a form of investment to gradually settle all your outstanding debts regardless of how big or small they are.
Remember that debts and loans have running interests that won’t magically go away. This means that the longer it takes you to settle your outstanding payments, the longer you will have to pay off all the ongoing interests of your financial obligations. So, the wise thing to do is to just find ways to become debt-free the soonest time you can.
Invest in index funds.
If you’re not too knowledgeable about how the stock market works and you just want something to invest some of your earnings in, index funds would be excellent. These are prepackaged stock bundles that offer assistance to inexperienced investors in an investment portfolio that tracks the S & P 500 — considered as a barometer of the US’ economic health.
With this kind of investment, you’ll only need to pay minimal fees when compared to other mutual funds that are handled by several financial advisors and investors. In short, index funds are pretty low-risk, low-capital, and uncomplicated investments that even non-technical investors can make.
A 401(k) is essentially a retirement plan that you gradually pay for while employed, with the company contributing a counterpart amount. 401(k)s are tax-deferred, which means that you’ll only pay taxes when you start withdrawing the money you’ve put into them.
The beauty of getting a part of your monthly income to a 401(k) is that should you change employers, those contributions are easily transferable into an IRA through a process called a rollover. Take note, though, that companies are not required to offer 401(k)s nor are they obligated to make a matching contribution. So, be sure to first inquire with your company about this investment option.
Just choose from these options the ones you can handle financially and capacity-wise. Whichever you choose, it’s already a great move since you’re taking your money into an investment that you could benefit greatly from.