As a person gets into their 30’s, they will often look to begin increasing their wealth. People in their 30’s are often in their peak earning years and are therefore most likely able to invest a lot of their income in assets that can help them build wealth and retire. For those in their 30’s looking to invest, there are many options that they should consider in order to reach their unique financial goals.

When you get into your 30’s, it will be wise to begin or continue investing in assets such as 401K plans and IRA’s. You will want to invest in assets that can generate income such as dividend stocks, bonds and annuities. Along with these types of assets, people in their 30’s will also benefit by investing in things such as precious metals, cryptocurrencies, index funds and real estate investment trusts. With a diversified portfolio, those in their 30’s will be in position to establish long term financial security.

CONTINUE WITH YOUR 401K PLAN

Most people who begin working at a traditional job will have the option to invest in a 401K plan. This is a retirement plan in which a person invests a portion of their paycheck into an account that grows over time. As you get into your 30’s, it is wise to continue investing in your 401K plan in order to make progress towards your long term financial goals.

There are some people in their 30’s who have yet to invest their money. While this may be overwhelming for some, there is still plenty of time to begin saving and investing. If you have a full time job, inquire about a 401K plan and begin distributing funds into the plan as soon as you begin working at your current job.

MAXIMIZE YOUR ROTH IRA CONTRIBUTIONS

Another one of the most common types of assets that people invest in is an IRA. An individual retirement account is one of the best ways to build wealth through investing. Those in their 30’s will want to continue investing in this type of account so that they can grow their wealth over time.

When investing in an IRA, continue investing in it by maximizing your contributions. You will want to invest in a Roth IRA which is the most beneficial. By maximizing the contribution to your Roth IRA, you will increase your wealth and avoid tax liabilities at the same time.

ACQUIRE DIVIDEND STOCKS

As you approach your 30’s, it is a good idea to focus on generating an income as well as increasing your total fortune. A good way to establish a source of income from investing is to acquire dividend stocks. These stocks allow you to receive a portion of the profits from a company during each year.

Investing in dividend stocks, helps diversify your portfolio as well as allowing you to earn money from the stocks that you already invested in. When you get into your 30’s, look into buying these types of stocks on a regular basis so that you can be financially stable once you retire.

INVEST IN BONDS

As well as investing in stocks, it is also beneficial to invest your money in bonds. A bond is an investment that generates income just like dividend stocks. You receive funds when the bond matures and gets paid back to you.

With bonds, you can invest in one of the safest securities available. By having lots of bonds in your portfolio, you can get steady payments over time and supplement the amount you earn in dividend stocks. Once you reach your 30’s, it is a good idea to begin making conservative investments in order to reach your financial goals.

CONSIDER ANNUITIES

Along with dividend stocks and bonds, you should consider annuities. This is a type of investment where you invest in an insurance policy that provides you with an income. Getting annuities can help supplement your income once you retire.

Compared to stocks and bonds, annuities can be a little risky. However, with careful consideration and a consultation with a financial advisor, you can learn more about annuities and how to avoid the risks that are associated with this asset. By getting annuities, you can add a valuable asset to your portfolio in the future.

INDEX FUNDS

An index fund is a collection of stocks that you can invest in to grow your wealth. By having a variety of different stocks in a fund, you will be able to maximize your returns each year. These index funds usually provide a consistent return, so that you can get steady gains in your portfolio each year.

The best way to get the most out of index funds is to invest in stocks of different companies and of various sizes. It is also a good idea to invest in index funds made up of stocks in a variety of industries. When you are in your 30’s investing in index funds will help you get good returns and help you make progress towards building your long term wealth.

BUY PRECIOUS METALS

While most investment options consist of financial securities such as stocks and bonds, you will also want to consider investing in precious metals. These are items such as gold and silver. You can purchase coins and bars that are made up of these materials.

One of the best things about precious metals is that they retain their value over time as well as increase in their overall value. Precious metals are an excellent hedge against inflation which allows you to possess a valuable asset in case the value of the dollar declines. When it comes to precious metals, you will need to make sure that they are in a safe place since they are physical assets instead of financial securities.

REAL ESTATE & INVESTMENT TRUSTS

Another great thing to invest in once you reach your 30’s is real estate. One of the ways in which you can invest in real estate is to purchase rental properties and receive a monthly income from the property. As well as investing in properties and receiving a rental income, you can invest in real estate investment trusts which gives you a financial interest for multiple properties.

When you reach your 30’s you will begin to get closer to middle age and focus on increasing your wealth. As you get into this age range, you will want to consider investing in many assets that can help you grow your savings and provide you with a stable income. With careful consideration and diversification, your 30’s will be one of the best times for you to invest.

The post Long Term Investment Advice For People In Their 30’s appeared first on Investor Relations Summit.

Many people delay investing because they think it is complicated. Nothing coupled be further from the truth. The basics of investing are simple enough for everyone to understand.

Before You Invest

It is important to build a strong foundation before you start investing. These 3 steps will make investing easier in the long run.

1. Spend Less Than You Earn

I know this is a very basic concept, but it is essential. The goal of investing is to win with money. You will never win with money if you spend more than you earn.

There is no reason to even think about investing until you prove that you can consistently live within your mean.

2. Get Out of Debt

If you have credit card debt or any other high-interest debt, tackle that first.

The average interest rate on a credit card is around 16%. That makes paying off a credit card similar to a 16% return on investment. A return that big is very hard to come by.

3. Emergency Fund

Before you start investing, it is a great idea to have an emergency fund with at least 3–6 months of expenses. If you are exceptionally risk-averse, you can make your emergency fund bigger.

There are two main goals of an emergency fund.

• Make financial emergencies feel more like minor inconveniences.
• Help you sleep better at night.

The safety of an emergency fund will make the ups and downs of investing easier to tolerate.

Investing Principles

Having a set of core principles makes investing a lot easier. If you have core principles that you follow, every decision becomes easier.

If a decision goes against one of your principles, don’t do it. If the decision follows all of your principles, go for it.

1. Invest for the Long Term

“We have long felt that the only value of stock forecasters is to make fortune-tellers look good.”
Warren Buffett

There is a reason most financial experts warn against timing the market. It simply does not work.

You will be much better off investing with a long-term mindset than trying to buy and sell regularly. Trying to time the best times to buy and sell is a waste of time and energy. It’s also very likely to cost you money in the long run.

2. Don’t Get Emotional

We all make bad decisions when we are emotional. No matter what you invest in, there will be ups and downs. You have to be ready for this fact so that a downturn doesn’t affect your decision making.

If you let big gains go to your head, you will get overconfident and careless. If you let big losses scare you, you will panic and make bad decisions. Only make important decisions when you are feeling neutral.

3. Investing Should Be Boring

“Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.”
Paul Samuelson

I know it sounds weird, but good investing should be boring.

4. Investing Should Not Take a Lot of Time

The best part of investing is that it allows you to generate passive income. Don’t make the mistake of spending so much time on your investments that it feels like a full-time job.

Read enough to stay informed about financial markets. But don’t overthink it.

Investment Strategy

Once you get the basics down, it’s time to start investing. Don’t worry. People make it seems a lot harder than it really is.

Diversification

“In choosing a portfolio, investors should seek broad diversification, Further, they should understand that equities - and corporate bonds also - involve risk; that markets inevitably fluctuate; and their portfolio should be such that they are willing to ride out the bad as well as the good times.”
Harry Markowitz

Diversification just means investing in many different things. Not having all your eggs in one basket, so to speak.

Having too much invested in one place is great if that investment works. But, it will completely wipe out your entire portfolio if the investment goes bad.

Diversification is important because for several reasons.

• It drastically reduces the risk of losing everything.
• It gives you more opportunities for positive returns.
• It reduces volatility. (ups and downs)

Here are the three easiest ways to diversify.

1. Index Funds

Index funds are an investment that tracks a certain index. The most popular is the S&P 500. The S&P 500 is a collection of the top 500 companies in America.

An Index Fund that tracks the S&P is one of the most recommended investments because of its proven track record. Since it is made up of the top companies in the country, it increases as the economy grows.

It is also simple and great for diversification. One investment gets you a piece of 500 different companies.

2. Bond Funds

Bonds are loans to businesses. If you are heavily invested in stocks, adding bonds to your portfolio is a great move.

The only problem is that individual bonds are time-consuming to invest in.

A bond fund is much easier. A bond fund is a fund that owns many different bonds. It is basically an Index Fund with bonds instead of stocks.

3. REIT

The two things that have produced the most wealth in history are the stock market and real estate.

The problem is that real estate is a difficult investment for beginners. Investing in real estate takes a lot of start-up money and is very time-consuming.

REIT stands for Real Estate Investment Trust. A REIT is a trust that owns many different properties and pays out at least 90 % of its profits to the shareholders.

They are great because they allow you to get into real estate for little money without the hassle of being a landlord.

Dollar-Cost Averaging

Don’t worry. This is another one of those fancy investing words that are not as complicated as they sound.

Dollar-Cost Averaging is investing a set amount on a schedule. For example, investing 100 per month, every month. This means investing consistently, no matter what the market is doing.

There are two big advantages to this strategy.

Forced Savings

Returns are only one part of successful investing. Consistency is the other, more important, part. The longer you invest consistently, the more success you will have.

Dollar-Cost averaging forces you to be consistent.

Cheap During Downturns

When your investments go down, they are cheaper to buy. Investing when the market is low is essentially buying stocks at a discount.

Investing consistently will ensure that at least some of the time, you are investing at a discount.

Final Thoughts

Investing can be complicated, but it doesn’t have to be.

Master the basics outlined above. Then, you can get more complicated if you want.

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