Are you in your 30’s and have not started investing yet? Or you are to enter in your 30’s and have no investment plan? If yes? You are at the right place.
In this article, we’ll enlighten you about the benefits of investment and how to start it in your 30’s.
Investment is the tool which has the potential to build wealth and secure your future. There is no particular time to start investing but when you start early, you get a better result in the future. As it is important to start it at the right time, in the same way, selecting the right investment plan also plays an important role.
The fact is, starting investing in your 30s isn’t that bad. But, it would have been great to start in your 20’s. Never mind you are not that late.
In 30’s, things in life start to change dramatically. Your responsibility increases as most of us start our family life in 30’s. This is the right time to start investing as your responsibilities are minimum which will grow with time. When your responsibility is less you can save and invest more, which is not possible in your late 40’s. Opt for the investment plan which has a minimum risk with more coverage and returns.
Understanding Your Goals
Understanding your goals is the most important thing, but one should be realistic with themselves at the same time.
So, a question arises here – how to figure out your goals? And how to know it is realistic or not? And how to achieve it?
What Your Goals Should Be?
- The first thing to consider while determining your goal should be taking care of your immediate needs first.
- Make sure you can take care of your family
- Save for emergency
- Plan for big events
Have a Life Insurance
Life Insurance has the potential to replace your income if you die. It provides cover to your family, so your family doesn’t become helpless when you are not there.
Disability Insurance – Most people don’t consider this or forget about it. But have you thought- what happens if you get into a road accident and can’t work? God forbid but Disability can happen anytime due to many reasons. Having disability insurance can replace your income so that you and your family can live without any financial issue.
Pay Off your High-Interest Debts
Before you start investing, you should have a plan to pay off all your debts in your 30s. Before you plan to invest your money and get returns, you should use your money to pay debts first. Once you clear all your high-interest debt then you can totally concentrate on savings and investment. But, this doesn’t mean you have to wait to start investing until all your debts are paid off. Your first priority should be to clear your high- interest debt as low-interest debt doesn’t eat your money as a high-interest debt does.
How Much Should You Invest?
How much do you should save and invest in your 30s totally depends on your income and your goals.
When you start to invest in your 30s takes more money to achieve the same goal, than it would have taken in your 20’s. For a secure future, your monthly savings and investment should be a total of 40% of your monthly income.
Where to Invest?
Buy a House
Buying a home is a dream to everyone and is one of the biggest financial commitments. Start saving for the down payment as early as you can and thanks to the home loan which is always there to help you buy a new home. Choose a property (house) which has high-growth potential to maximize the appreciation value its value in the future. Always go for a fixed-rate mortgage for your home loan with a substantial down payment.
Stocks are the share of ownership in a company. The price of the stock varies on the basis of investor’s evaluation and on the company’s performance. It also depends on the ownership change, new product releases and on company’s profit.
Generally, Companies sell stock to the public to raise money to grow or pay off debt.
Bonds are a kind of loan to a company which agrees to pay you back in a certain time period. In the meantime, you get interest on it.
Bonds are comparatively less risky than stocks as you know exactly when you’ll be paid back and how much you will get.
Mutual funds are one of the best ways to grow your money. When you invest, you don’t choose any particular stocks; the mutual fund does this all for you. Mutual funds make things less risky than individual stocks.
Mutual funds include index funds, which follow the performance of a particular stock market index, and money market funds, which invest in short-term, low-risk assets as well.
Starting investing in your 30s is harder than getting started in your 20s as you have more of life to deal with in your 30’s. But never mind, you are not much late. Keep the above-mentioned points in mind and start investing for a better future.