Long Term Investment Advice For People In Their 30’s

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INVESTING IN YOUR 30’S

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.

Gold Vs Silver For An Investment

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In the early 1990s, the price of gold ranged from $25, and we saw it rise to about $450 an ounce. In fact, in one decade, we saw a difference of about $170, which was incredible. In fact, a move of even $40 to $50 in a single year was a huge gain.

Now, we sometimes see such movement in a single day. As of September 2005, we’ve seen gold on an incredible rise. It has gone from $450 an ounce to $1,800 an ounce in 2011 and now at around $1,650.

Most mainstream investors didn’t think much of the change in the first decade, but by 2005, gold was at an all-time high. So when it crossed the $1,000 mark in 2009, investors started taking note.

Gold, once only watched by central banks and gold miners, was now mainstream. In fact, gold can be bigger than many tech stocks. Many people are looking into gold IRAs for investments…here is a list of the best gold IRA companies if you are interested.

What’s Up with Silver?

Siver has also had a good run, and the price is up and may even have a long upward run than gold in the next few months and years.

How’s The Market for Each

Silver had a huge run in the early part of the century and went up from about $7 per troy ounce to about $35. When you look at the percentage, it is on an even bigger upward trend than gold.

Consider The Demand

Silver has many industrial and commercial uses. Traditionally, we used it in the film industry. Still, it continues to be used in technology and cell phone manufacturing, musical instrument making, jewelry, medical instruments, and many other areas.

Silver is used in electrical appliances and electronics because it has low resistivity and is used to convert solar power into electrical power. Thus there is a growing need for it in the solar energy process. It is also used for its antibacterial properties and as a means for water purification and food hygiene.

Uses for Gold

Gold does not have as many industrial uses. Of course, jewelry accounts for about two-thirds of the gold demand. It is also used in medical applications, but that is about it. So the question arises, at what point will the demand start to go down, simply because it is too expensive. After all, there comes a time when even luxury items become too expensive.

Financial Stress

Most investors see gold as an investment. They see gold as stability and a good purchasing option in an overly unstable climate. Gold has risen in value over the last decade, and the U.S. dollar keeps going down. This is because the U.S. government has had to inject so much money into the declining economy. And because countries like China hold trillions of U.S. bonds and too much money invested in dollars. So many investors swap their dollar investments for gold.

Gold is a preferred vehicle and is thought to be a protection against risk. However, precious metals like platinum, palladium, and silver are also on the rise because of the stress caused by the world’s financial issues. Gold may still appeal to investors as a haven to store capital. Still, silver is also becoming easier and more people are taking advantage of adding it to their investment portfolios.

The Ratio

Investors use a variety of different methods to estimate the trends. They use the price to earnings ratio to help them get a view of the estimated growth and the value of the metal compared to something else.

Many years ago, a gold dealer named Franklin Sanders was determined to work out the average gold price compared to silver. He took his research as far back as 1792 and found that gold was about 16 times more than silver. In the last 100 years, that ratio has been as high as 96, but today the gold-silver ratio is about 51.

Traders believe the financial ratio has a historical pattern, and at today’s gold price, the price of silver needs to rise to about $58 per ounce, almost double what it is not to return to the normal 27% ratio.
Investment Options

In the old days, to own silver or gold, you had to purchase it physically, and you can still do that. Silver bars weigh about 6.8 pounds, and you can store them in a safe. However, in physical shape, coins are the most common investment vehicle.

Exchange-Traded Funds

The ETF’s started in the 21st century and track prices of commodities like natural gas, crude oil, gold, and silver, among other things. If you have a stock brokerage account where you trade stocks, you can trade for silver in iShares Silver Trust or the ETFs Silver Trust, listed under SIVR. Buying and selling silver and gold gives you the option of buying when low and selling when high without actually holding the metal itself.

Another option is to purchase shares of a company that mines silver or gold. You can buy shares in companies like Silver Wheaton (SLW), and these companies rise as the price of metals rise.

Final Word

Gold and silver can be great investments, but they are also very volatile, so it is not an investment for people who don’t like risk. You can’t trade these products today, and there are large price swings that can be quite scary.

Is Gold A Worthwhile Investment?

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Over the decades, in and out of different economic seasons, gold has maintained its value over many decades. Gold is the most valuable metal globally, which people trust very much and keep as wealth insurance during tough times. Gold has a unique appearance, and it serves various purposes, and it influences people’s social status. Many people have invested in gold following its stability in the past years. Research shows that gold prices will always go up. True to its nature, gold is the only metal of its kind, and people have put a lot of faith in it. Below are some insights about the gold investments that revolve in the gold industry useful in making the gold investment decision from GoldIRAInvestmentCompanies.org

1. Holding value

Since the ancient days, gold preserves wealth. Gold is also a form of wealth used to pass on an inheritance. Due to its unique features, non-corrosive and melting quickly, gold has gained popularity as the only metal that has survived against the economic tests and upheld its value over a long time. Unlike notes and coins, gold has stood unshaken by the financial crisis that has hit the world economy severally.

2. Prices of Gold

The U.S. dollar has been one of the reserve currencies in the world for ages. Nevertheless, the dollar has risen and fallen in the past, and maybe right that history may repeat itself. Between 2008 and 2012, when the U.S. dollar weakened against other currencies, many people went to buy gold, which led to a rise in gold prices due to its demand. The fluctuations in the value of the U.S. dollar lead people to use gold as a reserve metal. It is an assured investment that you can never sell at a loss.

3. Inflation and deflation Hedge

Inflation has the potential to bring down any strong economy following a rise in the costs of living. Gold does not suffer the effect of inflation; instead, when inflation begins to wear down economies, people invest and begin to buy gold to preserve their wealth. Gold is a stable store of wealth, especially in cases where inflation is predictable. In the event of a price drop of commodities and the purchasing power goes up, gold prices are not affected. The trade of gold remains stable enough and preserves its value.

4. Scarcity

Gold production has been on the decrease since 2000. Gold mining takes a lot of time to begin the mining process and successfully produce gold for the market. In 2019 gold production reduced by one percent, and this decrease may go on in the coming years. When production decreases, the demand unsettled. Unsatisfied demand results in a price increase of the gold circulating in the market, which increases returns.

5. Demand

Gold will always be on-demand, and mostly, the need is continually rising. An increase in demand for commodities amongst different investors results in an increased demand for gold. Consumer habits like jewelry demand result in increased demand for gold. For example, every year in October, when India has many weddings going on, there is a rise in gold consumption, boosting gold prices. Other investors who buy gold for saving purposes may contribute to the high demand for the gold. For example, in China, gold bars are a form of savings and more savings results in high demand for gold bars.

6. Correlation to other financial investments

Investors have used gold to complement their investment in stocks and bonds because they negatively correlate. The nature of their relations results in a reduced risk of investment. Practically, when the stock value depreciates, the investor can bank on the gold value to rise, and when stocks appreciate, the investor will remain on the safer side.

7. Intrinsic value

Since ancient times, the intrinsic value of gold has been unshakable. Its current intrinsic value is not comparable to the market value because it is a non-cash flow. Coins and notes can artificially undergo adjustments, but gold’s inherent value is constant in the assumption that people will always accept gold without digging into its value.

8. Gold and market liquidity

Gold is a liquid asset, and because it is accepted globally, so it is effortless to convert to cash anywhere in the world. Any investor can also buy and sell gold anywhere in the world as they desire. This liquidity gives investors the platform to exchange money for gold and vice versa as preferred.

9. Gold insures investors against political decisions.

There may be many conspiracy theories around why governments freeze bank accounts and cut cash flows for some people, especially when an investor is undergoing investigations. An investor can alleviate the impact of this by selling off a portion of their gold. There have been incidents where the governments of different states pass laws that may impact their money value. In cases such as this, gold will stand the harsh political decisions test regardless of the investor’s location.

10. Gold is easy to store and maintain

Gold is non-reactive in the open air, and this makes its maintenance even more straightforward. Gold’s value can be in a small bar and be placed within the house or in a safe box, unlike having stacks of money in your safe box. You will save on space and the value of your asset. Investors do not require special techniques to take care of gold.

Gold has protected investors’ wealth by maintaining its value, and due to the enormous returns the investors get, they can stabilize their wealth. Gold value is not artificially adjustable, and so people have used it to get a status quo and demonstrate power. The higher the amount of gold possession one has, the higher the power. Gold’s influence on power and social status applies to different countries and also people categorically. Investors can use gold as a form of trade instead of dealing with bulky cash transactions, and in other cases, gold can be used as security to acquire other assets. Looking into these insights, an investor can measure the worthiness of the investment and its risks.

Investment Tips For Beginners

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Investing is an important step towards financial freedom. Even if you don’t want to be rich, you want financial freedom. Life gets better when you are in a position to not stress about money.

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.

A Fun Exercise About Silver and Gold

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We’re on a mission to find and learn about current strategies that will help us grow our investment portfolios, and sharing them with readers. We are quite certain that we’re not the only ones who wonder, “Is gold a good investment anymore?” or “What about buying silver even though it’s not worth as much as gold?” I thought we might have a little fun today, and talk about gold and silver.

A quick little anecdote for you before we dive in. We’ve been hoarding sterling silver for years. I know that it’s only worth whatever spot prices are on any given day. For example, just go to google and type in something like “silver spot price today” and a chart will immediately show up in the search results and give you the day’s price and that will give you an idea of what it’s worth in “scrap value.”

So, at the time of my writing this post, for silver, it’s showing up for me in ounces – just over $27/ounce today; in grams – about .88/gram today; and in kilos – just over $877/kilo today. I happen to have about 8-10 pounds of sterling silver scattered throughout, which, today would mean that it would be worth about $3,000-4,000 give or take. To figure that out, you would take however much sterling silver you have, and then multiply THAT in ounces x .925 (because sterling is not 100% silver – it’s 92.5% silver).

Of course your next issue would be to find someone willing to pay you that for your collection! Most dealers aren’t likely to pay spot – they’re in it to MAKE money.

Would I prefer to have 8-10 pounds of 14K gold? Yup! But it’s a little harder for me to find these days. But, for giggles, let’s say I did have 8 pounds!

Google “gold spot price today” – and as of this writing, the numbers are: in ounces, gold is approximately $1970/ounce or roughly $62/gram. Let’s do the math. 8 pounds = 128 ounces. Remember that 14K gold is only about 58% gold ( Divide 14K by 24 [24K would be pure], then you’ll see your percentage) – so, 14k/24k = 0.583. This equals about 58%. So, now I multiply my “whole ounces” (128) by 0.583 (the actual purity I’ve got) and that will equal my “tradable” gold in ounces. So, in this case 128 x 0.583 = 74.624. Multiply 74.624 x today’s spot price per ounce of $1970 = just over $147,000! Bring it on!

Anyway, a person can dream, right?