Investment Options for Young Professionals

After going through four (or more) years of college and finally getting a job, it’s now time to be financially responsible and think of ways to build your wealth. Saving portions of your hard-earned salary is good enough but if you’re a brave young soul who is willing to take the risk and challenges, then you should consider going to investments. This is something best done while you’re still young and the sooner you start, the bigger the benefits you will reap even before retirement time.

Investing is not for everyone. Not all has the patience and the analytical skills needed to make important decisions. If you decide to venture into it, expect to be intimidated at first. There’s so much to learn about where to invest and how much to spend on it. With practice and perseverance, you will be able to manage your investment and actually make good money from it.

What To Do Before Investing

Before you start placing your money elsewhere, it’s important that you stabilize your finances first. Establish a fund for emergencies first and pay off credit card and other debts you may have. It’s wise to put off your investment plans until you have your finances in order. The idea here is to not spread yourself thin; you will put yourself in financial ruin if you tie up your savings in investment ventures AND pay off credit card debt at the same time. Imagine what will happen in you suddenly become ill, get into an accident, or lose your job. Your life can spiral out of control in a short period of time.

If your finances are already free and clear, you can already start investing. But first, you have to find out the kind of investments that are recommended for young professionals like yourself. Here are some of the possible areas in which you can place your money.

1. Stocks

Investing in stocks is hot right now and is becoming a trend among young professionals. However, there’s a misconception that once you put your cash in it, you will just sit pretty and wait for your cash to grow. Although you can pretty much do it that way, you will not get your money’s worth if you just let your cash sleep in your stocks. Give yourself some time to learn how it works and keep in mind that when it comes to stocks, you win some and you lose some. You will not earn an easy million at this early stage, that’s for certain. If you prefer to keep it conservative, choose stable and solid companies listed under the stock exchange and place your money on them. Your investment will yield a growth of 10% to 15% annually.

Learn the market first before you part with your cash. Consult with a financial advisor or fund manager and ask him everything you need to know to become a smart investor. He will tell you the right type of stocks to invest in when he checks your financial background. If you already feel knowledgeable enough to invest on your own, you can opt not to go through a fund manager and invest in stocks directly.

2. Real estate

With condo buildings being constructed left and right, it’s understandable why many young professionals are considering investing in real estate by buying condominium units. They can buy condos as an investment for the purpose of renting them out or they can use the units as residents and enjoy the convenience and other perks of living in condominiums. Once you find the right space, location, and financing, you can safely put your money in a condo property as a sound real estate investment.

Again, getting sound advice is necessary before investing your money. Find a licensed real estate agent to fill you in with everything you need to know about the real estate market and what you can gain from it as an investor.

3. Life Insurance

Life is very unpredictable and filled with unforeseen situations. How do you prepare yourself for illnesses, accidents, and major emergencies? Putting your savings in life insurance is one way to do it. Your life insurance policy is designed to be your lifeline in times of emergencies. This is also a way to secure your future when retirement comes. The rules are pretty straightforward: you pay a fixed amount in a monthly, quarterly, or annual basis. The insurance company will provide you and your dependents coverage. When the policyholder dies, a specific amount of money will be given to a chosen beneficiary. So if you’re the type who prioritizes security in case of medical emergencies, this is the right investment to make.

Insurance companies now offer more than coverage for emergencies. They also offer to invest your money for you in form of mutual funds. This is the perfect investment of people who want to grow their money while having the peace of mind to be able to deal with life emergencies.

4. Ownership Stake

If you don’t have the time or the skills to establish a business from scratch, the next best thing would be to buy ownership stakes. Unless you’re already rich to begin with, you still need a stable job in order to pull this off since you will need to pay the bank loans you will get for investment. Always keep yourself abreast of the workings of the business and the nature of the market itself to know if your venture will survive and last for the longer term.

At this stage of your life, you must seize every opportunity that comes your way. Take advantage of your youth and establish your financial security, even if it means taking calculated risks. Make good use of the time to do your research and explore your options. It’s hard to recoup money once you already lost it. Don’t hesitate to consult experts to make sure that your hard-earned money is in the right place and earning profits for your future.