Good Investments at Any Age

It's never to early to start investing or late, if you are Gen X. The other day my mother came over with some exciting news. She committed herself to start investing $200 a month in her brokerage account. My mom is still pretty young, since she had all her kids relatively early. So this was indeed exciting news, since she just finished putting her last kid through college and her money was now truly her money. Like most people, she is middle class, has a descent paying job making X amount of money each year. She has a retirement account, since she is a teacher, so she is one of the few in 2020 that qualifies for a pension, in addition to her 403b. However, like most immigrants, she came to America with the knowledge to work hard, save money and take care of her family. She's been in the U.S since she was 17 and now has spent most of her life in this country. She never knew at 33 years old she would be a widow and raising three girls by herself. Luckily for her, my father had an insurance policy, social security and a nice pension as well, since he too was a teacher. She use to tell me we were actually better off financially now than when he was live. Yikes!

As much was done to prepare us financially with my father's passing, very little was done to prepare us financially overall for life. My mother knew a little bit and did instill in us the power of saving and not living outside of your means, but that was the extent. It wasn't until I went to college and majored in Finance, I began to realize how much information on money I was missing. More importantly, what I should have been doing with those refund checks that I got every semester after my school fees were paid for. However like most things generational, your financial education is one of them that gets passed down to you, whether it's good or not. You learn only what you are taught! I'm sure by the time my son grows up, his mom would be rockstar in the finance world and will give all her tips and tricks to help set him up financially. The truth is my mom learned a lot when she was surviving being a widow and a single parent. She even admitted that my dad never had any savings to his name and it was only because of what he left, that we were able to survive.

So with all that I had to wonder what I would leave behind for my son? After all, isn't that what most parents worry about? What will they leave for their children, if they were to go unexpectedly? Well the good news is that I'm still young and I can afford to invest because I have time on my side. I started looking at the instruments that were available to me and asking myself, what are good investments when you are young?

Investing in your Retirement Account

In today's time, if you have a retirement account and you are not contributing to it, that is not the smartest or safest thing to do financially. I have to say you must fight instant gratification with consistency and patience on this one. I have a girlfriend that was super diligent about investing in her 401K and maxing it out every year. She and her husband now own two houses. One, being her primary residence, and the other one, an investment property. She was able to use some of that money as a first time homeowner and also a loan to get the second property. I'm sure she will be super responsible and pay herself back, but the point is she had the money because she was aggressive with her savings. Also for those who have a company match, please, please, please invest! That is like leaving free money on the table. Every company I've worked for, I've at least invested to the company match. Now I'm looking obviously to max out at my $18,500 max contribution every year, and lower my cost of living to accomplish this.

Real Estate

If I knew what I knew now, I would have been a land lord a long time ago. As the world of home-stays such as Airbnb and Vrbo have take off, this would have a been a ideal investment in my younger days. I'm telling the rest of the millennials and Gen-Zers out there, please invest in real estate if you can. I think it's one of the smartest investments that you can make. Obviously, do your research and make sure the numbers make sense, however if it does, do it! I just didn't know at the time when I was graduating how ideal the market was. I mean when I graduated from college, I would have bought a townhouse or a condo because I had nothing to lose. By now I would have paid it off, rented or sold it for capital gains.

Certification of Deposits (CD)s

CDs provide a safe haven for your money, even in the most radical times of a financial crisis. One thing I've started doing, is saving to create a CD ladder. I freelance graphic design and put every $1,000 I make into a CD. It's like I'm working for free because I want to make sure unless I'm reinvesting in my business, I hold every dollar accountable. I would urge everyone who is young to do a ladder oppose to just a CD. Unless you have $1,000,000 in a CD and you're getting some serious residual, I would say building a ladder is the best for CDs. You get a good amount of interest every quarter, 6-months, or year and then keep renewing your CD when the term has ended.

Investing in Stocks

I have a app called Acorns that I use. It's perfect for investing your change into the market. Say you spent $1.59 on a bottle of Pepsi, it takes the 41 cents and invests it into the market. I really like this app a little better for the convenience oppose to the whole set up of a brokerage account. I use to have a brokerage account and it worked really well, since it was set up through my employer at the time. I would purchase my stock on a monthly basis to add to the account. However I cashed it out to make a down payment on a new car I needed for my son two years ago. I still grapple with that decision because I had the savings at the time, but I wanted to make sure I didn't destroy my liquidity. Oh and by the way, trust me when I say I'll be driving that thing to wheels fall off. I actually hate the whole car buying process and feel like cars are such a waste of money sometimes.

There are obviously more methods that young people