Investment Tips: Best Investments To Make Before Age 40

Today we’re talking investment tips. If you’re still in your 20s, you might think it’s too early to worry about investing. But nothing could be further from the truth. The younger you are when you start investing, the better, because the closest friend to investing is time. If you take advantage of the best investments to make before age 40, time becomes your friend, too.

Investment Tips: Why Should You Start Young?

The main answer to this question is {once again} time. Young adults have a long while before retirement, and that equals a long while to build wealth. Add to that the natural growth of money when paired with compounding interest, and a young person has the capacity to grow wealthy over time. For example, a single investment of 10k at age 20 can expand to over 70k at age 60 with a simple 5% interest rate.

Best Investments To Make Before Age 40

Retirement Savings

The sooner you start saving for retirement, the more money you’ll have stashed away when the time comes. It’s much better to be on the side of too much money, than not enough! Read up on our 10 Tips for Retirement Planning {even if you’re 20-something}.

Home

The predominant thought about buying a home is that it’s still a great investment–with one caveat. If you plan to live in the same area for more than 5 years, it’s definitely an investment to consider making. It generally requires 5-7 years of living in the same home to generate enough equity to pay off if you sell. If your living situation is more temporary, it’s probably cheaper to rent until your living situation stabilizes.

 

Short-Term Investments

 

Short-term investments include money market accounts, CDs, and savings. Each of these options has the ability to give you a safe spot for your extra cash to grow. Most financial experts suggest saving 3-6 months worth of living expenses.

Investment Tips To Keep In Mind

The most important of these investment tips {no matter your age!} is to establish a regular habit of saving money. It’s most important to save–no matter what investments you choose.