Regardless of the fact whether you’ve landed your first job or are just wrapping things up with college, your 20s are an intensely exciting time as this is the time when you are starting to get paid and see some cash roll in. It is the beginning of your life as an adult and you finally have control over your money. This is the beginning of a very delicate time in terms of your financial life as your wealth in your thirties will be largely dependant on the financial decisions that you make right after you finish college and have control over your finance.
At that time, most of us are investment rookies, so in the hopes that you avoid early investing pitfalls, we gathered some tips to shed light on some of the most common mistakes you should avoid making in your youth regarding money investments.
Not investing at all
One of the biggest mistakes that many people make when they’re just starting their careers, is entirely taking themselves out of any investment plan. Not signing up for an employer-matched 401(k) basically means turning down free money, thus giving up the chance for your money to grow while you’re still young. Many millennials get overwhelmed by all the investment choices they face and instead of grabbing the opportunity, they put it off.
Not contributing to a retirement account
A 401(k) is the ideal way to start investing, but it is not the only way to secure your future. In Australia, one of the most popular ways to save for your golden age is to invest in an SMSF and to follow the Self Managed Super Fund rules to ensure success. It is a superannuation trust structure which offers financial remuneration to the members it consists of (who are also its trustees) in retirement. The Self Managed Super Fund rules should be followed and respected in order for it to function legally. It is regulated by the ATO and it can have between 1-4 members. One of its biggest benefits is the level of control that the members have in terms of tailoring the fund in a way that it can meet their individual needs.
Not being consistent with your contributions
Regardless of the type of fund you’re investing in, consistency is a beneficial early strategy. To encourage this sort to say habit, the simplest method is setting up automatic deposits in your investment account. Start as young as possible and be consistent. It is the ultimate key for success.