Investing is a process that changes as you age. You will be served well by starting on the investing process as soon as you can. Even if you just save $10 out of each paycheck, that’s still a start. Just get into the habit. Remember that it’s never too late to get started.
Your goals determine the manner in which you invest your money. If you don’t need the return very soon, long-term investments allow you to tolerate more risk. The earnings could drop drastically, but you may keep your money invested because the earnings will rise again by the time you need to take your money out of the investment. You want less risk and more liquidity in short-term investments like saving to purchase a home.
The different stages of life make you change your investing strategies. A person with a child will need to balance his investments with the additional expenses of the child. Another situation may require that you supplement your income with an income-producing investment.
There are many life milestones that will make you re-examine your investment strategy. When you first get a real job, you will want to start a savings account to build up a reserve of cash and open up a retirement fund that you constantly accumulate wealth. When you receive a pay raise, you’ll want to increase the contributions you make to the company-sponsored retirement account and increase your contributions to the cash reserves you’re building up.
When you finally marry the love of our life, you’ll need to determine new investment allocations and contributions that take the combined expenses and income into account. When you decide to buy a house, you’ll need to invest some non-retirement funds into short-term investments that will fund the closing, down payment and costs of moving.
When a baby arrives, you’ll need to increase your reserves of cash and your insurance policies and begin amassing a college fund. Changing jobs means you’ll need to reassess your strategies. The kids moving out means boosting retirement savings. Every major life event should cause you to reassess your investments.
Investing in education
The most important investment you can make is in your education. Going back to school to earn online masters in accounting or secondary education is a great way to add value to what you can offer employers.
A post-graduate degree can substantially increase your earning potential over the long-term. If you set up your investments in the right way, you may even be able to offset the costs of earning the degree so that it does not drastically affect your lifestyle.
Investing should be a fluid enterprise. It is a practice that should be done to accomplish clear goals. You should always have a reason for investing in a particular area. As you age, your goals will change and your investing strategies will need to be re-evaluated.
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