Did You Know You Have to Switch Your Financial Strategies as You Age?
If you’ve thought that financial planning is a single instance affair, allow us to burst that misconceived bubble for you. The fact is that, as you age, thus changing your preferences and needs, you have to reassess your investments. You have to put in the time and patience needed for proper planning before your investments can reap the benefits you’ve been looking forward to.
Categorized according to age slabs, here are certain tips to help maintain your investments effectively.
In Your 20s
– Save Save Save: Always remember that the sooner you start saving, the better for your long term financial health. The average person during this age, having just landed their first big-time job, throws all their money away on useless things. However important it might be to live your youth to its fullest, wasting expenses and following unhealthy financial practices is a highly problematic characteristic. As such, stick to a budgeting strategy and aim to save at least 20% of your income.
– Get into Investing: Investing is another form of saving. Since you have a long career ahead of you, full of revenue gains, you are capable of incurring some short-term risks while chasing long-term gains.
– Emergency Funds: Financial obligations get a kick-start when you get your first big check. Hence, you need to have a rainy day fund because emergencies come announced more often than not, and you need to be prepared.
– Invest in Yourself: We know that partying is all the rage when you’re young but, the more you care for your health, the longer you live, and the better you feel. To that measure, invest in your well-being by joining a gym, eating healthy, and keeping your body disease-free.
In Your 30s
– Keep Investing: At this stage, you still have 30 or so years left to earn, so you can still do with some risky investments and try to gauge as much profit as you can. At the same time, aim to keep your equated monthly installments at a manageable level so you can continue pursuing your investment goals.
– Get Insurance: As you start a family of your own, you’ll realize the importance of stability and financial security. Hence, insurance becomes a must at this age, whether it be for health, assets, or both.
– Children’s Education: You’ll come to realize how important it is to invest in your children’s education if you want them to succeed in life. Try accumulating the funds for it from this time onwards.
In Your 40s to 50s
– Financial Stability: All your investment planning should be aimed at achieving financial stability, with a little to no risk portfolio that can gain the funds needed for a comfortable retirement. Gradually repay all your loans and debts so that a larger chunk of your income can be redirected towards your savings account.
– Focus on Your Health: As you age, diseases are an unavoidable thing. While your insurance is there to back you up, there’s only so much it can do so, make sure you have a fund allocated to health emergencies.
Financial planning and investment management is an ongoing feat, one that keeps changing as you age. Assure that you take the right steps at the right time to grow your wealth and better your financial health.
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