There are some kids that know the value of the piggy bank. They put money away assiduously, work out how best to put it to good use and use it wisely. These are the kids that will grow up to be people who build good portfolios.
So how can we be more like them?
It’s Never Too Soon
Investment is something that seems like only real grown-ups think about. People with big salaries and two cars invest. It’s an idea that can undermine out future financial security, especially if we delay investing until we hit our thirties and ‘get serious’.
Looking at investing as soon as we get out first full-time job, or even putting aside a little from part-time work in our very early twenties could make all the difference a couple of decades down the track.
Build Investment Knowledge
By the time we come out of school, chances are we know how to do a tax return. We understand the concept of saving money from part-time work, or the idea that we need to put aside a certain amount of money each week to gain a desired product or experience. But, with no personal finance aspects in school curriculum, we’re probably at a loss as to how to run our financial lives as adults.
In a time when we could begin to invest, we are instead struggling to balance rent, groceries and our meager incomes. Learning as much as you can from an early age will set you up well when you want to start investing. Read financial papers. Talk to older relatives. Set yourself a comprehensive budget and start out your independent financial life on the right foot.
Know Your Short, Medium and Long Terms
It’s a big ask for young people, working out what they want in the near and distant future. It’s also an essential part of financial success. Working out what you want to achieve financially gives you a pretty good idea of what you need to start doing now to get there.
Live Within Your Means, Manage Your Debt
Once you’re salaried, it’s easy to get majorly over-excited. It’s a whole lot of money compared to the pay from Kmart but it isn’t hard to make it all disappear very quickly.
The key to investing solidly in your financial future is to manage your money properly, allowing a margin for saving. Keeping a tight lid on your debt will also improve your chances of investing early and successfully.
It doesn’t matter how small the amount it, put it aside first and invest it. It doesn’t have to be anything huge, over time, any savings will build up to something significant. Don’t tell yourself that you’ll invest some money if there’s anything left over at the end of the week. Save first and you’ll find ways to make the rest of the money stretch.
Invest According To Your Goals
Do you want to own your own home, or start your own business?
Are you concerned about retirement and want to bolster that aspect of your finances before all others? Talk to an advisor about how best to invest your money according to what your long-term goals are. Diversifying your assets is key, so make sure you get some good advice about where best to place your hard-earned dollars.