The Young Person’s Guide to Creating Long Term Wealth
Young people starting out their careers are at a unique point in their life. They can feel like an adult one moment and indulge in carefree youth the other. And that’s perfectly fine, as long as everything is held in the balance of financial prudence, whilst planning for the future.
As a young person, you’re getting used to acting grown-up and responsible not just for yourself, but others too. Maybe you’ve also started earning more now, and after some time of trial and error, you’ve got a better grip of your spending habits.
While all of this is commendable, having financial security demands a little more. You may have your pension all set up, but it’s probably not at a level that will grow fast. You could still be offsetting your student loans and credit cards.
The good thing is that, as a young person, you’ve got one of life’s most valuable resources: time. And depending on how well you utilize it now, you can avoid future financial problems. Setting the foundation for long term success and happiness.
How? Here are a few financial habits of successful people to start aiming for now. Never think it’s too early or too late.
Save for retirement
At this stage in life, your priority should be on long-term savings. It’s one of the greatest habits of financially secure adults today.
Think about it. If you’re in your 20s, it means you have about 40 years to plan your retirement; and if you’re in your 30, that’s three solid decades to adequately spread out your financial objectives.
Financial trends show that real estate and stocks are the most valuable assets to invest in. But for a more diversified portfolio, it’s wise to buy into other assets like mutual funds. Of course, the best place to start is a retirement savings plans – whether a personal pension or an employer-sponsored plan.
Think about buying a home
Buying a home is traditionally the smartest financial decision anyone can make. To what extent depends on a number of variables such as the current state of the housing market, rental prices, your financial situation and the duration of residence.
If you plan to live in one place for less than 5 years, then it’s often best to rent, as it takes an average of 5 to 7 years to gather sufficient equity in a property to make buying one more valuable than renting.
Credit cards help you solve both short and long term financial needs and plan more wisely for the future. But you shouldn’t jump for every credit card that is on offer. Look for one with low interest rates, a modest credit limit, greater flexibility and helpful apps and features to meet your financial goals and flexibility.
The greatest financial decision you can make as a young person, is to start saving early and find a reliable financial partner or institution that genuinely supports your long-term objectives. This way you can insure a lifetime of prosperity.
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