We’ve all heard it before, save $50 a month and when you hit 65… But with the advent of online brokerage firms, a stock and options market available to everyone and easier than ever to fund and manage . On your own, statements like this take on a whole new meaning.
I’m not advocating a life of strict savings or car deposits, I’d like to bring to light a little-known investment vehicle that every 20-something can and should take full advantage of: the options market. If giving up your coffee every morning or spending the night with your candy isn’t your idea of growing your savings account, you’ve come to the right place.
When it comes to growing your savings account, there are two prevailing notions, one old-fashioned and one new; work hard and save money mercifully or learn how to invest so that your money will make you money. Can you guess which is which?
A new era of savings has arrived, investing and managing your own money has become easier now than ever and for that reason every twentysomething should be familiar with it.
It’s a well-known fact that when it comes to savings, it’s not the amount of money you save that makes the biggest difference, but the amount of time you allow your account to grow. With this in mind, every 20-something who doesn’t let time work for them is making a mistake they can’t right. Of course, this applies to everyone, but when you’re in your twenties you live in the sweet spot between easy living and true responsibility. It’s a rare time, your twenties, when it’s still acceptable, if not expected, for you to live on the lowest possible budget or even financial aid while “getting under you” and building your savings and work experience. Also, the costs of home ownership, children, car payments, health insurance, etc. it has not been fully established and for these reasons, failing to start your investing life now is a mistake destined to leave a resounding impact on the rest of your life.
Keeping in mind that the longer you wait to begin this inevitable quest, the less time you have on your side when you finally do, remember that every day that passes is another day that you can’t. let it work for you.
There will come a day when you will seriously consider investing, a few years from now when you have all the responsibilities listed above, but that day will be too late to let time work in your favor. I repeat, the price of not starting now is a loss you will never recover.
At a minimum, open a managed Roth IRA, set up an automatic deposit, and forget about it. However, for those of you who prefer to take charge of your financial future, learn an invaluable skill, and very likely generate a higher return, consider delving into one of the many financial markets. If being in charge of your finances interests you, follow these steps:
First, spend a few days developing an interest in the financial markets. After learning about the mind-blowing potential, spend five or six weeks gobbling up information on the many financial markets to help you decide which one is the most exciting and interesting for you, has the steepest learning curve, and best suits your personal financial goals. From there, take the next step: invest in a class, buy some books on trading strategies, open a paper merchant account, and set aside some money to start investing once you feel confident enough to do so.
Worst of cases? You emerge six weeks later with a head full of knowledge that is sure to help you one day. better box? You change the direction of your financial life and begin a journey that you will surely thank yourself for many years to come. The return on investment of this type of knowledge search is limitless, you will learn a skill set that probably pays for itself countless times. You can even change your professional interests.
Why be late for this life changing game? Do yourself a favor with dividends, start this quest in your twenties.
Visit http://www.tradersgateway.com to learn more personal finance and investing techniques geared toward beginning investors.