Contrary to what many might think, it’s never too early to start investing. Don’t be put off by the assumption that it’s only for ‘math people’ and those with money – it’s not. Everyone can invest. And the earlier you start, the sooner you could reach your financial goal. As a new investor, you may turn to your parents to model your investment portfolio on, but it’s important to remember that there are different investment strategies for each stage in your life, so what your parents do now, won’t necessarily be beneficial to you. So what route should you take? This article will help you answer just that by taking a look at what investing as an under 30 means.
Learning the Basics
The first step to take is to make sure you know the basics of saving and investing. With access at your fingertips to thousands of resources, learning about investing has never been easier. We believe in the power of learning so much that we teamed up with the Open University to provide three short and FREE online courses to teach the average Joe about personal finance.
What are You Investing For?
Even if your outgoings are high and earnings are low, it’s important to start thinking about where any spare cash will go. Most people in this age group will choose between saving for a property or pension as generally, they have don’t have enough cash to do both. There are products currently on the market that are specifically aimed at those people looking to save for a deposit for a property, which are proving to be popular. However, it is worth noting that accounts such as a Stocks & Shares ISA can be valuable to have as the cash invested into these can be used towards any financial goal and can potentially give you a higher rate of return than Cash ISAs. Not only this, but with True Potential Investor, you can open an account for just £50 and top up your investment with as little as £1 whenever you want. This makes our Stocks & Shares ISA obtainable for any client.
A Head Start on Retirement Planning
It is important to not disregard pension planning entirely at this point as the earlier you start, the better you could be financially in the future. Many of us see retirement as a stage in our lives that is many years away, however if you start putting a little away for it now, you could have less to put away each month in the long run. Many people believe that you should take your age, half it, and that is the percentage of your salary you should be putting away each month for your retirement. For many this can seem impossible, which is why it is so important to start now.
In 2012 we saw the introduction of the government’s auto enrolment programme which has proven to be a huge success. This means that all employees who fall under certain criteria must be auto enrolled onto a workplace pension scheme, putting them onto that first step of investing for their future.
Many people choose to open a Stocks & Shares ISA or Personal Pension alongside any other savings or investment accounts they may have, but they may be invested into a portfolio that is not necessarily best suited to them. For example, younger investors saving for retirement may feel comfortable investing in more aggressive funds with a higher potential for growth but greater risk, because they have plenty of time to ride out any dips in the market whilst seeking better long-term growth.
Investing when you’re under 30 can be just as important as any other time in your life. Starting early means that you could be one step closer to reaching your financial goal.Open a Stocks & Shares ISA Open a Personal Pension
Your capital is at risk. Investments can fluctuate in value and you may not get back the amount you invest. Past performance is not a guide to future performance. Tax rules can change at any time.