If you are currently in your twenties, you might finally have a job that pays more than what you need for rent and buying ramen. You may want to make the most of this influx of capital by investing, but you might not know where to start. If so, here are some tips for you:
1. Consider Being Aggressive in Your Investments
Consider putting your money in equities that carry more risk than you might prefer. When you are in your twenties, you can afford to be aggressive. You can afford to make riskier decisions because if something goes wrong, you have plenty of time before retirement to save up again. If the investment works out, you now are very well-set for the future and will be able to enjoy the fact that time is on your side when it comes to compounding interest.
2. Utilize Software to Help You Manage Your Money
There are many different mobile apps and types of software available to help you manage your money and squeeze as much money as you can out of your budget to go toward investing. There are apps that will automatically round up to whatever dollar amount you spend and add the extra cents to a savings account for you to invest later. There are other apps that allow you to set financial goals and then use a financial planning algorithm to help determine which investment opportunities are the best for you. Take full advantage of the technology that is available to help you get money out of your lifestyle to invest and determine where to invest it. Make sure that you choose apps that have no minimum balance requirement in order to make sure that, should your lifestyle change, you won't be stuck paying a bunch of fees.
3. Invest in Your 401(k)
If you have steady work, invest in your 401(k). Your employer will match whatever you put into the account up to a certain amount, and no one should leave free money lying on the table. Invest in this account up to its specific limit and then move onto a Roth IRA. Be sure that you consult an investment planner before making this jump in order to be sure that you are making the best investment possible.
For more information about how to make great financial choices while you're young, speak with an investment strategist in Lexington, KY or your local area.