Simple Steps to Young Financial Security
Become financially secure at a young age so you can afford to participate in memorable
life experiences and enjoy the comfort of knowing that you are financially secure.
A recent study by the Government Accountability Office (GAO) predicts that one out of every three workers will have nothing ($0) saved in a 401k style account by 2050.
This statistic is supported by the National Association of State Boards of Education's
report that states 'most workers aren't participating sufficiently enough to allow
comfortable retirement'.
Many people are aware that they need to start saving for their future; however most
people have no idea where to start or how much they will need. With uncertain economic
times it is now more important than ever that today's youth start investing young.
That means giving practical financial education skills to young adults early in
life so they can achieve financial security.
Plan for Financial Security while Your Young.
Retirement is a long way off for people under 30; however this is a critical time
to secure your financial future. The sooner young adults invest the easier it will
be for them to achieve financial security. This frees them so they can experience
life more fully. These simple lessons will have you on the road financial security
and, as equally important, will allow you to fully enjoy life now.
1) Invest early - The earlier you get your money working for you the sooner and
easier you will have financial security. By investing young you are able to harness
the power of compounding interest.
'Compounding interest' is simply earning money from the profits of your investments.
So you're making money off money you did not have to work for. This offers young
adults a tremendous advantage. In fact, investing as little as $100 per month starting
at age 18 could make you a millionaire well before you reach retirement age. Plus
it will give you the ability to afford and fully experience life during the process.
2) Investment consistency - Investing on a consistent basis will allow you to generate
long-term gains over time. For most, simplicity equals consistency; and consistency
over time leads to financial security. Start to follow a consistent investment plan
now; then as your investment knowledge grows you can add other forms of high-return
investments.
3) Diversification - Diversification lowers risk. If you have all your money invested
in the stock market, and the market crashes, you could potentially loose a lot of
money. Now if you had a portion of your money invested in stocks, some in real estate,
some in businesses and some in other alternative investments - if any one of the
markets corrects itself, you wouldn't get hit as hard since you're diversified.
4) Tax benefit vehicles - Use investment vehicles that give you tax benefits. Many
people don't realize about 40% of your income goes to pay taxes. So by choosing
an investment vehicle like an IRA may help to keep more money in your pocket.
So the key to young adult financial security is following simple, consistent investment
strategies starting at a young age. Being diversified and using investment vehicles
that provide tax benefits will help to supercharge your returns. Get started now
because you'll be able to afford the things you want now and in the future.
Vince Shorb, creator of the multi-media course 'Financially Free by 30' and young
America's success coach, provides young adults with real world money advice so they
can achieve financial security at a young age. Visit http://www.FreeBy30.com for his exclusive free video course.
