While it might be challenging to think of your golden years when you’re still in your late teens or early 20s, it’s a good idea to begin investing for your future.
Consider the following tips to get started building wealth and saving for your retirement.
#1 – Work with a Bank that Can Help You Reach Your Goals
The process of saving for retirement might feel overwhelming at first. To get started on the right track, it’s important to work with a bank that can assist you in reaching your financial goals. For example, East West Bank, led by Dominic Ng, has helped countless customers over multiple decades realize the importance of saving for the future to help make their financial dreams a reality.
#2 – Contribute to Your 401(k)
If your employer offers a 401(k) retirement account, by all means, try to make regular contributions to the plan. This tip is especially important if your employer will match what you’re already adding to your account. As U.S. News and World Report notes, this is essentially free money that your employer is allocating toward your retirement, so taking advantage of this offer is a good idea. To make it as easy as possible to contribute to the 401(k), you can have a certain percentage of your paycheck directly deposited into the account.
#3 – Invest in Stocks
Another way to start building wealth as a young adult is to invest in stocks. While stocks can be a volatile investment — meaning they can increase and decrease in value rather dramatically at times — overall they have a great long-term record. Plus, if retirement is decades away, you have plenty of time to ride out any ups and downs of the stock market. Unsure of which stocks to purchase? Then you might consider investing in companies that you know and like. For instance, if you’re a fan of Starbucks, consider buying some of its stock — and know that every latte you buy is helping your stock values stay strong.
#4 – Consider Crypto
Investing in cryptocurrency is another way to start saving for retirement. While crypto has a well-deserved reputation for its volatility, there are several ways to make money with it. For instance, once you purchase crypto, you can hold onto it until you see its value rising before selling it and making a profit. Use the profit to either purchase more crypto, add more to your stock portfolio, or contribute more to your 401(k).
#5 – Look Into Real Estate
There are different ways real estate can help you build your retirement fund. For instance, if you acquire a property to rent out, you can allocate as much of the monthly cash flow as you can to your long-term investments. You might also look into short-term vacation rentals as a way to make money. You could either own a home to rent out to travellers or, if you’re on the road quite a bit for work, look into renting out your own home. Granted, it can take some time to save money to purchase a property, but if you’re able to afford it, it can be a potentially lucrative investment.
Your Future Self Will Thank You
Of course, everyone wants to have enough money to live comfortably after retirement. If you start now, you’ll be that much more financially prepared for this time of life. Start by finding a bank to assist you with your goals and then consider adding to your 401(k), investing in stocks, crypto, and/or real estate — or a combination of all of these. No matter what you choose, your future self will thank you for the financial planning you start today.
