10 Investments to Make in Your 30s
The way that you manage your money during your thirties can have a huge impact on how the funds will be used in the future. You don’t want to reach your golden years still paying for that lavish vacation that you took several years ago, so it pays to think twice about making any impulsive financial moves.
It’s also important to start investing early so that you can reap more rewards later on. Take a look at these top ten tips on how you can save money and which investments you should make the minute that you reach the big 3-0:
1. Prioritize three or four of your biggest financial goals.
If your thirties is that decade when one major life development happens after another, how are you supposed to juggle it all? Financial experts advise that you prioritize three or four of your biggest obligations. If you use a fire hose to fill up too many buckets, none of them will get full at all. To make things easier for your budget – and yourself – focus on three to four things.
If you’re paying off student loans, credit card debts, paying for a car, a new home and kicking off your retirement fund – which among these should be your priorities? Go for paying off credit card debts and student loans; establishing an emergency fund; and kick starting your retirement savings. Once you have made pretty solid contributions to these, you can start adding funds to other things like buying your ideal house.
2. Make that investment to pay off your debts.
How many credit cards do you own? If it’s two or more, allot more payment towards the card with the highest interest rate. For the others, you can pay the minimum balance. Your student loans should ideally also be paid during your thirties.
If you can’t pay it all off in one go, at least pay down a significant amount, especially if you are paying a high interest rate.
3. Make adjustments to your insurance coverage.
If you’re a thirty-something parent, you should start reassessing your insurance needs. Having dependents would require you to have life insurance. This way, you can give your loved ones that sense of financial security in case something unfortunate happens. Based on the nature of your work, you can also acquire short-term and long-term disability insurance, as well as health insurance for the kids.
4. Continue adding money to your emergency fund.
A good rule of thumb to follow when saving up for an emergency fund is to maintain three to six months’ worth of living expenses in a separate fund. In case of job loss, you would have funds to live on while you are still getting back on your feet financially. Look for a high interest savings account, but since this should be liquid, it is better if it’s in a safe rather than risky financial instrument.
5. Invest at least 15% of your income.
If you’re employed, you're forced to make your 9.5% super contribution. But why not go that little bit further to put a little extra away? this will help you reach your retirement goals early than you think. And if you get promoted or if you have other sources of income, bump up your contributions so that you can work on building a bigger nest egg.
6. Make that investment to improve your credit score.
We unfortunately live in a credit-based society. Even if you’re more than willing to live using cash to pay for things for the rest of your life, having a low credit score or no credit history at all might prevent you from making bigger financial moves – like buying a house.
While you are still young and able, continuously monitor your credit score and work on upgrading it if you have a low score. Look for errors once you receive your free credit report and correct them accordingly, so that you can improve your score.
7. Invest in your kids.
If you have yet to add a new member to your family but are planning to, you can already pool together funds for bringing a baby into this world. Paying for sporting events, a private school education or even planning to assist your kids into the property market are the kinds of events our clients are planning for
8. Consider investing in the stock market.
If you’re pretty good with the money market, consider investing in stocks. It’s a more aggressive way of growing your money although there are risks involved. You can take your pick from blue chip stocks, income stocks, growth stocks, value stocks or international stocks. Of course, you need to learn about the basics of investing in the stock market if you want to maximize the earning potential of your money. The stock market allows you to invest smaller sums of money in a market that allows you to quickly pull funds out, should you need it.
9. Try income producing assets.
If you don’t like the stock market, go for bonds or fixed interest products. They range in many shapes and sizes, but are designed to earn you an income above a normal savings account, while providing more protection than stocks.
10. Also consider investing in real estate
Australians love the real-estate market and have profited greatly from it in the past. Although, with property prices rising, it is becoming harder to buy investment properties and to service the property on an ongoing basis. If you have the cash available and free cash flow, this might be a great investment for you.
Put your money in as many of these investments as possible and by the time you reach your forties, you would more or less have a solid financial future to look forward to.
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