This post is featured on behalf of Stacey White.
The younger your start, the easier it is to build up a sizeable nest egg that will allow you to meet all of your life goals and retire within a reasonable amount of time. If you’re in your twenties, it’s a great start to think about your investing strategy. I mean, if you start investing just $10,000 when you’re 25, and you continue to do that every year for forty years, you could be sitting on $1.9 million by the time you retire, assuming a 6.5 percent yield from your portfolio!
Does that sound desireable? Here are the common-sense investment ideas you should be paying attention to right now:
1. Your 401(k)
If you have access to a 401(k) then it is a total no-brainer to start saving for your retirement. Deposits to your 401(k) come out pre-tax so you’ll hardly notice a difference in your paycheck. If your company does 401(k), matching, don’t miss out on the free money!
2. A Stock Portfolio
When you’re young, you can afford to be a lot more aggressive with your stock portfolio than you can when you’re reaching retirement age. Take a look at this source to find out about investing in commodities, bone up on the stock market and check out T-Bills. Plow as much of your disposable income into them as you feel comfortable with and it will almost certainly stand you in good stead, even if every investment doesn’t work out.
3. Passive Index Funds
When it comes to investing your hard earned money, you should keep the amount of fees you have to pay low by investing in passive index funds. This is a sure way to maximize the returns you see on your investments over the years because you’ll be paying less for holding them.
4. Get an IRA
If you have a Roth IRA, you can contribute up to $5,500 each year. There are many benefits to having an IRA, so be sure to discusses this with a financial planner.
5. Start Saving
Of course, you should also be saving into an account for those essentials in life such as a downpayment on a house in a general savings account. Ideally, you should put at least 10 percent of your annual income into general savings each year, so you can earn a little interest and build up a nest egg that will be there when you need it.
If you aren’t investing your money right now, ask yourself what’s holding you back. Is it fear of the unknown? Is it a potential lack of funds? Finding the best investment option for you is the way to go because investing is a strategy that pays off.