This is an important time to begin your investing strategy and commitment.
Steps for investors age 22 – 35
- Start contributing to your employers 401(k) plan – This means that some companies will match up to X% which provides a quick return on your investment. For example they may indicated a match up to 6% so any money invested up to 6% of your annual salary is matched at 100% (or another %) by the employer. This would be a 100% return on your basic investment guaranteed.
- Become debt free – Before things about jumping into investing it’s good to make sure you have a strong foundational budget and an emergency fund. Additionally you should consider paying down high interest debt (credit cards, store cards, personal loans, etc) and then begin investing.
- Start small and increase when you get raises – Investing at first can be a daunting task but if you start small ($50 or $100) a month an increase it every time you get a raise will prove successful in the long run.
- Setup a budget – Develop a budget that allocates money to both investing and debt reduction while controlling for your daily expenses.
- Develop a diversified portfolio – This may sound harder than it is. By utilizing low cost index funds or “life-cycle funds” you can infuse instant diversification into your retirement portfolio.