Investing can be a scary thing when you know very little about it. However, with the right knowledge and some time spent learning, investing doesn’t have to be too daunting of a task.
Here are the best investments for young adults according to experts in order to help you navigate investing your money wisely!
Investments in education:
The earnings of college graduates tend to be higher than that of high school graduates. Student loan repayments are also tax-deductible. The higher up the educational ladder one climbs, the more returns on investment one can expect.
Investments in the stock market:
The average annual return on the stock market is about 10%. Also, the more risk one takes, the higher returns one can expect. For example, if one invests $10,000 and goes for a risky portfolio that yields 5% (20% annualized), at the end of two years, he or she breaks even with only $8,250 in the capital. If he or she does not take risks and sticks to a conservative portfolio of about 70% stocks and 30% bonds yielding 4%, he or she ends up $10,000 ahead with an additional $1,750 ($10K x .04 = $1K + $80 = $11K).
Stocks:
This can be very expensive and time-consuming, with the average stock costing $120 in commissions. However, the more you invest, the more money you can make.
Bonds:
Bonds are best for those who want to get ahead faster. They’re usually a safer investment since they pay a fixed return regardless of how risky the market is. However, they don’t offer extremely high returns and carry higher risk.
Real Estate:
Real estate is a very complex topic that takes many years to learn about but if one learns enough about it and makes smart decisions, this is an extremely rewarding investment option.
Long-term investments:
These are very expensive in terms of the time and effort required to make them work. For example, REAL estate is a long-term investment that takes several years to appreciate.
Here are some other specific options:
Mutual Funds:
There are many different mutual funds out there that offer different investment options such as stock market, money market, etc. The best way to find out what kind of mutual funds you can invest in is by asking your financial adviser or the financial institution you have invested with. They will have a list of all the kinds of mutual funds that they offer and tell you exactly which ones would be best for your situation and why.
Paper Assets:
One paper asset that can be very rewarding is a Certificate of Deposit (CD), as CDs are one-time investments and pay a fixed interest rate. Interest rates on CDs tend to be lower than bonds, but for those who want protection, it’s the best bet because it gives you access to your capital before anyone else can get at it. CDs also come with lower minimum investment requirements than most other investment options. You can also open a CD online.
Investments in a 401k or IRA:
These are retirement accounts that have high potential in terms of return and are good for socially responsible individuals who want to give back to society in retirement.
Investments in a trust fund:
These are the best option for socially responsible individuals who want to use their money to benefit others in society.
Fundraising:
The best way to raise money for charities is by asking friends and relatives to donate. However, fundraising is very time-consuming and most people find it very difficult as well.
Investment in real estate for the elderly:
As most people get older, they start to lose their family members and friends. This will leave social security and other government systems with a lot of people who are not able to work anymore. It is very important that these people should be able to live on their own property without having to worry about paying income taxes as much as they do now, as well as providing them with opportunities that are not available to them now because of the responsibilities they have towards the society. Investments in real estate can be extremely beneficial for this type of senior citizen. Passive income will help them afford their own place to live and provide maintenance for the place, as well as help them pay for all their expenses.
Investments in real estate for the handicapped:
As we get older and our physical condition starts to deteriorate, we start to get physically disabled from suffering from diseases. Investing in real estate can be a very rewarding option for those who can no longer work because of these illnesses and disabilities. These people will live on their real estate property that has been rented out to generate passive income. This can be of great assistance to them especially if they are not able to work because of their health conditions.
Investments by yourself:
No one can do this better than you. The only way you can make the kind of money that you need to live comfortably is through investments by yourself. It’s not as hard as most people think if you do a lot of research, spend a lot of time on it, and take smart steps.
Invest in businesses:
If you have enough time, energy, and money, investing in businesses is one of the most powerful ways of making money. It is all about taking chances, being creative, and being able to think outside the box.
