Making good financial decisions in your mid-twenties (when you are earning a regular income) can come a long way, making your long-term financial goals of buying your own home or saving a decent retirement fund much more feasible.
You may argue that you are just not left with enough money at the end of the month to save up anything, but believe us, you can go ask anyone if they ‘can’ save and you’ll see most of them say no. Waiting for a time where you think you will be earning enough is a dream that never comes true. Chances are you might earn more but your liabilities will be even more.
Saving and investing during later years is as difficult as it would be when you are younger so your best bet would be to invest early! Your Mid-twenties are really golden years to begin investing.
Here are 5 investing tips for the 25-year-olds.
1) Explore the various retirement schemes and consider investing in them
Thinking about your retirement is probably the last thing you might want to do when you’re a 25 year old. But believe us, you will thank yourself later for doing this. Many people who ignored saving or investing and have lived it all in their twenties and thirties rather live like penurious wreckage in their old age. To avoid that, it is best you start investing in retirement schemes. If you start saving for your retirement early enough, ‘compounding’ can truly work wonders for you!
2) Invest in equities
Keeping aside a cut of your regular income for saving in bank deposits can be the first step towards achieving your personal finance goals. But the dropping interest rates offered by the banks in Ireland makes this a bad option, leaving you only with less income in the form of interest earned. What’s your next best option then? – Investing in equities. There are hundreds of equity stocks you can invest in. Typically, equity stock market investments are recommended to be invested over a time horizon of four to five years. As a general rule, the longer you remain invested, the lesser the chances of making losses.
3) Choose Multi-asset funds
Investing in Multi-asset funds allows the investors to allocate their investments across a diverse stream of asset types, including equities, bonds, and alternative assets. It comes under the category of ‘managed funds’, so you can rest assured about your investments while the asset management companies will plan the best assortment of investments you can make.
In Ireland, Irish Life, Standard Life and Zurich Life are some of the best players in the game. Each firm has a different approach to getting multi-asset fund investing right, and you should research deeply before choosing one of them.
4) The approach of ‘averaging in’ is still an undoubtedly safe way of investing
If you are a person who likes to play it safe, rather than going all guns with your investing, then, ‘averaging in’ approach will work best for you. You allocate a certain sum of money each month to an investment fund. This is a less risky approach because it doesn’t require you to put in all your money into the market at one go. Thus, you will be buying at different prices every month, meaning your portfolio has greater chances of smoothing down the ups and downs of equity prices in the market.
5) Investing in Property funds can never be old-school
Investing in properties has been one of the most commonly approached ways for making a fortune by hundreds of top successful investors in the world. You don’t necessarily have to invest in commercial real estate with full involvement and the leg work. The REITs (Real Estate Investment Trusts can be a go-to for you. They manage your deposits and keep you posted about all the developments on the money you’ve invested.