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Best Investments for Young Adults

Best Investments for Young Adults

| October 29, 2019
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Best Investments for Young Adults

For many young adults, they’ve likely been told about how to save money most of their lives, but investing is another matter. With many young adults lacking in investment knowledge, taking time to delve into investing in your 20s can have extreme benefits later in life.

 Like with most things, the earlier you start, the better off you’ll be and investing in no different. However, before you can find the best investments for young adults, it’s important to evaluate all your options when it comes to investing in your 20s.

With not saving for retirement early enough the biggest financial regret among Americans, you don’t want to make the same mistakes past generations have made.

Source: BankRate


To help determine the best investments for young adults, we’ve gathered our best ideas to help recent college graduates learn where they can invest their extra income. 

Start Thinking About Retirement Now

The best investments for young adults are generally linked to retirement. Most people would prefer not to work their entire lives and opening a retirement account is the first critical step. 

The earlier you can start investing for retirement means you can better take advantage of savings and tax deferrals. Now that you’ve finished college and are starting your career, make sure to enroll in your employer’s 401(k) plan.

In addition to opening a 401(k) plan with your employer, make sure to check if the company will match any of your contributions and try to maximize the percentage that they match. When a company is willing to match your contributions, you’re basically turning down free money if you opt out.

An IRA (Individual Retirement Account) is another retirement account where you can contribute to at an early age and watch it grow while also enjoying tax-deductible contributions. Another IRA account is a Roth IRA which allows for tax-free withdrawals after the age of 59½ years.

Retirement may seem like a long way away for young adults now, but procrastinating will only add delays to your retirement. To help develop a retirement strategy for young adults, consulting with a financial advisor can help ensure your retirement goals are achievable.

Take Advantage of Growth Opportunities Now

When investing in your 20s, long-term growth should be your focus. You have decades of investing in front of you and compounding interest is something you can take advantage of. 

With the S&P 500 Index having an average rate of return of 10% since 1926, seeing a profitable rate of return for three decades can help achieve retirement goals.  Keep in mind that the 10% rate of return was the average and there will certainly be positive and negative swings in the decades to come. But investing in your 20s can help offset any potential losses along the way.

Don’t Just Invest in Stocks

While the stock market can certainly yield positive results, the best investments for young adults include a diversified set of financial strategies.

Another investment that has potential for growth over the long term is real estate. Even most properties that lost tons of value during the mid-2000s housing crisis have regained their value, which helps young investors compensate for any short-term losses. 

In addition to the traditional forms of real estate investments like buying a home or rental property, young adults should consider investing in a real estate investment trust or REIT. This provides investors with an opportunity to possess a portfolio of commercial real estate to help provide more diversification to your investment portfolio.

While not investing early is a big financial regret, there’s no need to compound it by delaying your investing. For those who have experienced a financial regret, 25% say they have no plans to find a solution.

Source: BankRate

Regardless of your long-term goals, financial mistakes are bound to occur when dealing with finances and it’s best to consult with a financial advisor to ensure you are on the path most aligned with your financial lifestyle. 

Matt Logan is experienced with retirement planning strategies and developing financial solutions for his clients. If you need help finding the best investments for young adults, reach out to Matt Logan today and see how he can enhance your retirement planning. Give a call today at 336-540-9700.

Note: Investments in real estate and REITS may be affected by adverse economic and regulatory changes.  Properties that incur vacancies may be difficult to sell or release.  Non-traded REITs may have certain risks, including possible illiquidity of the investment and should be considered a long-term investment.  Past performance does not guarantee future performance.  When you sell your shares and/or units, they could be worth less than what you paid for them

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