You are never too late to start investing for your future. No matter if you are in the 20s, in the age which makes you feel your retirement is a bridge too far or you have just landed in 30-somethings, investing in something to grow your money is a smart idea. After all, who doesn’t want to live happily ever after retirement?
You don’t want to work when you hit your 60s right? Therefore, if you live from paycheck to paycheck then you should start investing in the early 30s at least. As 30-somethings is the period when you are likely to witness major things happening in your life such as marriage, a serious career, kids, or a desire for your own house. Additionally, you may also become a victim of Inflation anytime irrespective of your age at any time. In spite of these changes, you should also plan for your retirement as mentioned before. Okay, don’t get overwhelmed. You can lead a happy life after retirement if you plan things right away. This article takes you through 10 best tips for investing in your 30s to not only retire peacefully but also grow your money in simple ways.
Max Out your 401(k)
So, start with your 401(k) plan. All the amount you have in your 401(k) is all free money deposited by your employer. Moreover, this is the tax-free amount safely hidden in the account. The high annual contribution limit of a 401(k) is $19,500. Do some research on how to max out your 401(k), get tax breaks, select low-cost funds, and contribute. Also, shift to a high savings rate and avoid penalties. This way, you can protect and grow your money with zero to the low tax rate.
The more you contribute to your 401(k) the better, but however, this can happen rarely. Still, you can consider contributing when you see a hike in your salary or bonus.
Set Up Emergency Fund
You need to sometimes focus on short-term investments to make it easier for you to invest in the long-run. So, start building an emergency fund that may be useful when you want to buy a house or come across any emergency. As emergencies are uncertain, you can’t skip this. So, start building an emergency fund with your online savings account. Online savings accounts are a better way to save and grow money in a short time. Remember that, brick and mortar banks don’t offer interest rates higher than online financial institutions. However, you need to ensure that the bank you choose is under FDIC guidelines.
Set Up Retirement Fund
While you can still work part-time after retirement to make a living, that is not a smart idea. You can need to financially secure your life after retirement making smart moves in your 30s. So, one of the best options to invest in- opening a Roth IRA account.
As said when discussing 401(k), you can also contribute to Roth IRA to grow your income while escaping the taxes (yes, you can contribute to 401(k) and Roth IRS at the same time until you are in income limits). This way you can make much more money in your account by the time you retire.
You are in your 30-somethings means you have enough time to cover from losses in case you go bankrupt taking risks. So, this period is the perfect time to learn and invest in stocks. So that that you may gain high returns or in a worst-case lose some bucks. However, with proper planning, you can make a pretty penny.
The higher risk you take, the higher you gain. So, find ways to invest your money and think of investing in something short-term and long-term as well.
Ensure you don’t Pay much as Fees
Third-party fees or a Robo-advisor or human advisor fees might seem little now. But as you have more years to go, they pile up with time (be it 10 years or 30, paying more fees is a burden to you). So, ensure you are maxing out your 401(k) timely and avoiding penalties. You might have to invest your time which is worth it.
Do you know there are apps to micro-invest? Read Which apps are the best for micro-investing.
Invest in ETFs
If you want to make a rich life in the long-run, then ETFs (Exchange-Trade Funds) are the best investments. Not only these give you higher returns but also help you reach your long-term goal faster (you can take retirement earlier if you plan properly). However, this is not a get-rich-quick scheme, but investing in the right stock or mutual funds can help you make handsome profits.
Invest in Multiple Stocks
Yes, you need to take risks but also ensure you still have one foot out the door. So, consider investing in multiple smaller stocks that have a bundle of stocks invested already. This way though you risk for some higher rate stocks, you can cover up the loss with smaller stocks if something worst happens.
Life Insurance to Protect your Family
Responsibilities change with your age and you need to fulfill your responsibilities. You have a family that depends on you and your income, so make sure you protect them no matter what. So, get an insurance policy from a trusted provider which also helps you to pay off your debts along with acting as a helping hand for your family.
College Saving Plan
It is better to start a college plan for your kids when you are active and young. There are plans such as 529 plans which allow you to help yourself and your kids from college fees burden.
Pay Off Debts
Well, this might not seem like an investment, in fact, that’s true. But you can’t go far smoothly carrying weights. So, you better clear off higher interest rate debts, if you have any before you start investing. This makes you pressure-free as it might become difficult to contribute to multiple things every month or quarterly. However, you can keep lower-paying debts which save you money.
There are both long-term and short-term investments to consider in your 30s. Hope the above tips will help you plan your financial future in a great way. As each individual has unique family conditions, career, financial status, and responsibilities, you will not find a single answer to plan your investments. So, sit down, take time, take this article as a guide, and jot down how much you can invest for your future at this point in time. It doesn’t matter how much you invest, just start investing to shape your financial future perfectly.