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Top Investing Tips for Young Adults | Financial Planning Tips

Top Investing Tips for Young Adults

No matter how strong the economy gets, it cannot be trusted to stay the same throughout time. You would not want to be caught off guard at the last minute when it crumbles and you being left with almost nothing to speak of. The following are some viable investments for young adults that even older generations can try out.

Saving

Everyone knows the importance of saving up for a rainy day. Rather than using old-fashioned piggy banks, a smarter move would to allow your savings to earn. Open a savings account with reputable banks. Though smaller banks tend to offer higher interest rates, larger ones are more stable and reliable not to go belly up.

Treasury Bonds

You can also opt to buy government treasury bonds. You can purchase bonds at a lower price than the amount denominated on its face and expect it to earn about 5n five years. The catch here is that you should hold on to your bonds for five years. You have to let the bonds mature before you can get your investment back, unlike a simple cash deposit in a bank. You can think of this to work like a time-deposit. The advantage with this option is that you are dealing with the government which means you will not have to worry about it declaring bankruptcy unlike banks.

Bullion

Investing in bullion can be both fun and profitable. These are available in silver, gold and platinum. Starters purchase coins as these are the smallest pieces, move to nuggets and eventually to bars. Putting all your money in bullion is not wise as the market is subject to drastic fluctuations. One good thing about investing in bullion is you will not receive a mere piece of paper as proof of investment but you will be holding on to the tangible objects themselves. The best part is that no matter where you are in the world, it will hold some value. Unlike currencies that are subject to both the economic and political situation.

Stocks

Several hundred dollars saved can get you shares of stocks with the biggest corporations in the country. You can opt to invest in already established corporations or try a new one that you truly believe to grow in the future. Some big corporations like Revlon and TiVo allow investors to purchase one share at a time.

Roth IRA

The brainchild of Senator Roth from Delaware, the individual retirement account is one of the best things any young adult can put their money into. Gambling your retirement on the program from your employer is never a good thing as there are a lot of things that can make you unqualified to receive retirement benefits. Think of it as a forced savings that you can only use until you retire. Because of compounded interest, a $2,000 yearly contribution for 45 years will give you over $1.2 million when you retire. For more information on Roth IRA and Traditional IRA click here.

The recent financial crisis is not impossible to happen again. Everyone is highly encouraged to be prepared. Even if the economy does not falter, a comfortable retirement is hard to attain if you do not prepare for it as early as you can.

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