As a young adult, you are probably just getting the hang of handling money. However, the sooner you can get a good handle on your finances, the sooner you can start making your money work for you—and let’s be honest, that’s when the fun really begins. After all, who doesn’t enjoy passive income and a bulging savings account?
By following the tips below, you will begin to see your money grow and expand into more than you probably even considered at the start of your financial journey.
Create a Financial Plan
Before your money can really begin to work for you, you must have a solid financial plan in place. Set goals for yourself, and do the math to understand which steps must be taken to meet those goals.
Consider how much you are currently making, what kinds of assets you would like to have, and what you would like your savings account to look like. See a financial advisor if necessary, but do what you have to do to get a good plan in place.
A good plan should include:
- A budget.
- A set amount to be contributed to savings.
- A set amount to be sent to your retirement fund and other investments.
- A plan for any left-over funds.
It could also include plans for making additional income and moving up the ranks in your career.
Make Savings a Priority
This is high on our list for a reason.
Having and contributing to a high-interest emergency savings account is a very important part of a secure financial future. Without it, any work you do—along with any plan you put into place for your money—can come tumbling down at any moment.
For this reason, it is important to always remember that life happens. Things just come up sometimes, and occasionally you’ll need funds outside of what your regular budget allows. Having an emergency savings account to pay for any incidents will allow you to leave your investments in place and continue moving forward with your plan, even when setbacks occur.
Begin Making Safe Investments
Investments are a bit confusing for beginners. However, there is plenty of material to be found—both online and in books—that will help you learn the ropes to safe investing. If you still feel unsure of yourself after doing your own research, a financial advisor may be able to help you.
However you go about it, now is the time to begin investing.
Get Into Real Estate
One of the very best investments a person can make is in real estate. Once you are in an excellent place financially, it is time to look into purchasing an investment property.
If you choose wisely, a good investment property should return your investment with plenty of profit to put into a second property. Continue investing in new properties and up your real estate game, always using the return on your current investments to do so. This is one of the best ways to grow your money relatively quickly and with little risk.
Contribute to a Retirement Account
Everyone wants to have the ability to retire someday. Some people even set goals to retire by 35 or 40 years old, something that was unheard of for the generation before you.
If you have any desire to sit back and relax as you grow older, now is the time to start investing in a retirement account. Contribute regularly, and be sure to include your goal amount and how much you must contribute in order to reach that amount in your financial plan.
Find Money to Invest and Save
Of course, investing sounds great until you have to come up with the money to do so. The best thing to do if you are having problems finding money to invest is to take on the mindset that no amount is too small. There are plenty of ways to save money in your day-to-day life, and by implementing these tactics and including them in your financial plan, you will be able to set money aside specifically for investing.
Start a Side Business
In order to see your money grow faster, you might consider starting a side business to bring in extra money that is purely for investments.
Whether you enjoy working with your hands or working on the web, there is likely a business opportunity just waiting for you to grab it. Your side business can start out small, and there are plenty of opportunities to start businesses with little to no overhead.
As your business grows, you might find that it is best to a) hire someone to do some of the work for you, or b) if it’s making a lot of profit, make the business your full-time job.
Always Invest Extra Funds
From the money Grandma handed you on your birthday to the returns from your very first real estate property, it is important to invest (or save) ALL extra funds. This includes bonus money and/or money from raises as well.
If you have money that is not accounted for in your budget, don’t blow it on unnecessary things; make that money work for you! You’ll be glad you did.
Broaden Your Horizons
Many young people find and settle into jobs that keep them comfortable, without much thought for the future. However, doing this is just asking to be stuck in a dead-end job.
Instead of settling in at a job that’s only acceptable at best, it’s important to keep an open mind, be on the lookout for new opportunities, and broaden your horizons when it comes to your career path. You never know when an unexpected opportunity may present itself!
Always Look Ahead
In the same vein as the tip above, it is important to always be looking towards the future.
Consider every move you make, every opportunity you accept or decline, and every connection you make (or bridge you burn) in terms of what that action might mean for your future. Always be thinking about where you are headed next and avoid getting stuck in the past. After all, how can you move onto tomorrow if you are still thinking about yesterday?
These are some of our very favorite bits of advice for building a strong financial foundation. By following these tips, we are certain you will be moving on up in no time.
Would you like to learn more about handling your money in a smart and efficient way? Please contact us at Passport Income for more information.