Being young and living solo have many perks. The seemingly infinite energy and time on your hands allow you to do many things.
When it comes to investments, it is better to start while you are young. While you might not be earning your full potential yet, you only have yourself to take care of. This leaves you with larger savings that you can invest in for your future.
When you invest early, you have a better fighting chance against inflation as your investment accumulates interest or grows over time.
Here are some investments that you must begin as soon as possible.
Save For Your Retirement.
Your retirement might be far off from your mind. However, the younger you are when you start investing for your retirement, the more beneficial it will be for you. You have time and compound interest as your ally when you start young. In your 20s, you have around 40 years to grow your retirement investment.
You can place your investment in high-risk, high-return vehicles, such as stocks and mutual funds. You can also invest in real estate, where you can grow your capital over time. Once you retire, you will thank your younger self for the foresight of saving earlier. A more than sufficient retirement fund can give you an enjoyable and comfortable retirement life.
Invest In Real Estate.
If you see yourself staying where you are now for years to come, you can start saving for a home. Of course, buying a home will depend on your financial situation, the current real estate market, and preference. For some, renting can be convenient, especially if they keep moving from place to place.
You can also consider buying a condo or a flat. Whatever real estate you choose, make sure it has undergone building commissioning to ensure your safety and convenience.
Real estate can grow your capital as the years go by. You also have the option to convert it to rental property should you decide to move in the future.
Invest In Yourself.
You are your greatest investment. Your knowledge and skills contribute to your earning power. With so many people holding a bachelor’s degree, you need to invest in higher education if you want to stand out.
If you are looking to climb the corporate ladder, a Master’s degree can help you, especially if you are vying for a promotion. Pursuing higher education while you are young and living solo will be much easier than pursuing it when you are older and have a family to take care of. You will also qualify for posts with higher compensation if you have higher educational qualifications.
You can also read books, enroll in online courses, and learn new skills that you can use not just in your current work but also in your personal development.
Buy Life Insurance.
For most young professionals, buying life insurance is not an urgent need. However, life insurance can cover many financial needs. You might think that you don’t need it because you don’t have dependents yet. However, getting insurance in the latter years of your life can be more expensive. You will be paying higher premiums by the time you already have dependents to take care of.
Save For Your Emergency Fund.
Whatever your age, you will need an accessible fund for unexpected emergencies. You should set aside at least three months to one year of your expenses. You can use it for sudden repairs or in the unfortunate event that you lose your job. Having an emergency fund will save you from having to make costly loans. You can start setting aside at least 10% of your savings each month.
Your financial decisions now will echo to the rest of your life. You will reap what you sow, and you only have yourself to thank for in the future.