For many young people, the thought of investing scares them. We live in a time where many people don’t have a significant amount of savings, and instead live paycheck to paycheck. Here at Guardian Financial Group, our financial planners will work with you to fully understand your financial situation and target areas that can be improved so that you can make wise decisions for your financial future. Once you get to this point, you’re going to need something to invest in order to start seeing consistent and relevant returns. In this blog, we’re going to talk about a few of these investments.
If you’re a young person looking to make investments, there’s no better place to start than with yourself. That doesn’t mean you should go out and drop all your money on gifts for yourself, however. Instead, you need to invest in ways that will allow you to see returns later in life. Think of it this way: you are your greatest asset. But that asset isn’t fixed in stone, its value can go up depending on how much you invest in it. The most obvious way to invest in yourself is through education. Our financial planners are experts in education planning and education funding.
Individual Retirement Accounts
An Individual Retirement Account or IRA is set up through a financial institution or brokerage firm. After putting money into an IRA account you can use it to purchase things like mutual funds and individual stocks, all of which are held inside the account. At a certain age, the money can be removed to fund your retirement. Although there are many types of IRAs, there are two most common ones: traditional IRAs and Roth IRAs. The traditional IRA is best if you believe your current tax rate is greater than what you’ll have in retirement. The Roth IRA should be used if the opposite is the case.
Investing in peer-to-peer loans is a good short-term investment as opposed to IRAs which you need to be invested in for the long term. The best peer to peer lenders learn to invest in many different loans rather than one large loan. This way, if one of the loans fails, you still have many others that could see returns. Not only will you see steady returns with this method, but you’ll get paid monthly and should have enough money to invest in more loans within a couple of months.
Checking And Savings Accounts
One of the simplest ways for young people to invest is through online checking and savings accounts. These accounts are safe because they’re insured by the FDIC up to $250,000 and you won’t have to worry about losing interest when you remove money.
Contact Guardian Financial Group
Whether you’re experiencing financial troubles or you want to start making bigger investments, every financial decision you make should start with a plan. Contact our financial advisors today to learn more about our education funding, education planning, and financial planning services.