Adulting 101 – 5 Investment Options For Young Adults To Consider

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Adulting 101 – 5 Investment Options For Young Adults To Consider

While travel, parties, and splurging on treats are essential aspects of enjoying your twenties; a certain amount of planning for the future should also be thrown in. Balance these things well; you can enjoy your young adult years while setting yourself up to be financially free in your thirties. From simple savings accounts to some surprising ways to invest in commercial real estate, here are five investment options all young people should consider: Adulting 101 -5 investment options for young adults to consider.

1. High-interest saver accounts

Most modern banks have interest-paying savings accounts. The trick is finding the ones with the best deal. You also need to be consistent with your deposits and set a reminder to check every few months. Whether you’re still getting the best deal on the market.

Though high-interest savings accounts are a good place to start; they generally don’t give you returns sizable enough to combat inflation over the long-term. Once you’ve used your account to develop good saving habits; it’s time to move on to the next options on this list.

2. Investment trusts

Not having the capital needed for lucrative commercial investment opportunities doesn’t preclude you from getting involved. Real Estate Investment Trusts (REITs) are companies that are in charge of commercial real estate investments. Their portfolios can include anything from apartments and hotels to malls, storage facilities, and warehouses.

What’s great about REITs is that you’re investing as a trust, meaning you don’t have to have much capital to get involved. The best REITs are offering large, reliable dividends. However, you need to do your research before investing; as not all REITs (and by extension their dividend payments) are made equal.

3. Index funds

Index funds are great for new investors. These pre-packaged stock bundles offer newbies an easy way to quickly develop a nicely diversified portfolio. You’ll get expert assistance but at a much lower rate than you’d pay with other types of mutual funds.

4. Certificates of deposit

Certificates of deposit (CDs) are brilliant for young investors. As they only tie your money up for a relatively short amount of time. The range is usually anywhere from 90 days to five years. Once the term is up, you can reinvest or move your money elsewhere.

One of the biggest benefits of CDs is that they are FDIC-insured (up to $250,000); meaning they come with a layer of security along with their healthy interest payments. The one big thing to consider before going ahead with a CD; is that you must be able to leave it alone for the full term. There are high penalties for early closures. If you’re someone who’s always dipping into their savings; maybe circle back to tip one and master your high-interest savings account before giving CDs a shot.

5. Retirement fund 

Though the concept of being a white-haired retiree may seem distant and foreign to you right now. IRAs and employer-sponsored retirement funds are a brilliant place to start planning for your financial future. Your employer will usually match your contributions up to a certain percentage. This means that if you’re willing to sacrifice money now, you’ll get more than just the interest – you’ll get additional employer contributions that will help your nest-egg grow. The matched contributions alone can add up to tens of thousands of extra dollars by the time you retire. So, it’s worth doing a bit of research to ensure you’re maximizing the benefits of your fund.

The best thing about the options above is that they require minimal up-front investment while still offering healthy returns. So, there’s no reason you can’t get started today.

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