Youngsters are more focused on spending than saving. It has often seen that many young people do not plan their investments in the first few years of their careers. Instead of planning their retirements, they enjoy spending money on unnecessary things that they don’t actually need, just wish to have it! But, it is normal and shouldn’t be blamed as when we’re young and at the start of our career, retirement or investment are likely the last things in our mind.
How did we end up here?
Not all people start investing in the early stage of their career. Sometimes, unexpected life events that set us back and prevented from investing and earning more. Some people struggled in their career and bounced around various jobs due to low wages. In short, there are plenty of reasons, but the point still remains the same: You simply couldn’t save and invest until now.
While you might be regretting not starting to invest sooner, but don’t worry! You’re not alone who hasn’t made any investment in his/her 30s. In fact, a lot of people are late starters. Yes, it would be recommendable to start earlier but getting started in your 30s isn’t bad either. But, it would be strictly recommendable to don’t wait until it’s too late. Put it off too long and before you know you’ll have only a few short years left to benefit from the compounding. Ultimately, you’ll have nothing to save for your golden years.
The most challenging thing in investing late in the 30s is that 30s is typically filled with a lot of expensive life events. You just paid for your wedding and now waiting for the children to come as well. In addition to it, you have to think about your retirement. It’s overwhelming to do all these things while fulfilling other obligations. Just when you start to earn a little more, all these life events are coming back at you at a time.
What we can do now?
One of the most important thing you can do to ensure your financial security is to start investing – now! Since you’re in your 30s, you’ve established yourself in your career, making a decent salary to spare some part of your paycheck to savings and investing. However, you’ve to be more cautious in picking the investment vehicle that not only meets your risk tolerance and time horizon but also helps you build a wealth that fulfils your financial goals in time. Apart from this, you must have a good understanding of your goals and start being real with yourself.
Define your Goals & Start being real with yourself
Undoubtedly, you’re a late starter! But, it doesn’t mean there is nothing left to do! But, you gotta start being real with yourself. For starters, what are your financial goals? – Is it to build a corpus via a long-term investment? – Because if it is, then you must take care of a few things prior to making any investment such as short-term emergency funds, life cover, etc. It is because no amount of wealth will do any good if you just going to leave them screwed in case of any unfortunate event of life or death.
You also need to ensure you are financially organized and keep tracks of your expenses and savings. Once you have done it all, you can finally begin your investments as per your financial goals, time horizon and risk appetite. Keep in mind, you started late so you would require more to achieve the same goal than in your 20s. You will need to save more money to receive the interest that can help you build wealth comparable to investments made in the 20s. While doing so, you need to select an investment portfolio allocation that matches your risk profile.
You can opt for investment options such as equities, equity mutual funds, ETFs, and other asset-class that offers higher returns than fixed-income investment options. As you invest your portfolio, make sure to diversify your portfolio to mitigate risk and receive good returns. Remember, the portfolio created in your 30s will not be the same as the portfolio made in your 20s. However, once you have done, you should stick to your portfolio until you achieve your financial goals. Getting started in your 30s is challenging and mind-boggling. After all, you have to save more, earn more, and invest way more to achieve the same financial goals in starting late. Honestly, it will be like battling uphill in every aspect of life. However, it is important that you continue this fight. Because the only way out is through within.