4 Smart Ways to Invest While You’re Young

By Chris Grasso
Chris Grasso
Chris Grasso
Chris is a freelance writer who also enjoy going fishing. He enjoys the sunshine and all kinds of outdoor activities. Email Chris at chrisgrasso88@gmail.com
August 6, 2013 Updated: April 24, 2016

Young people generally get so wrapped up in starting a career and earning a living that they tend to neglect making smart investments. However, the best time for a person to invest is when they’re young. 

What are some smart ways that young people can invest their money?

Buy a Home

Trulia.com lists seven financial benefits to homeownership. Most of the benefits are better long-term for your wallet than short-term, which is why buying a home when you’re young is such a smart move. One of the benefits is that with every monthly payment you make you build equity, so making those payments is, as it says in the cited article, “like a forced savings plan.” Plus, over the course of the years, buying works out cheaper than being a perpetual renter.

While long-term benefits dominate, there are also shorter term benefits to homeownership. Interest on mortgage payments and property taxes are both tax-deductible. In addition, you can also use equity on your home to pay for other expenses you and your family might meet along the way.

Buy Stocks

If you’re not a pro in the business/finance industry, you might feel intimidated by the prospect of investing in stocks. You might think it’s too risky or too confusing. One tip at budgeting.thenest.com suggests that you stick to investing in what you know. Don’t put your money in companies that you know nothing about. Think about companies that you like, companies whose products you use, and companies that seem likely to thrive.

If you still aren’t absolutely sure about your investments, it’s a good idea to get in touch with the pros and take advantage of the insight that they have in the financial industry. Whatever investments you’re considering, the right financial adviser can go a long way toward making your money work for you. Looking into backgrounds of professionals is a good idea to see their experience, a good example is to learn more about Peter Briger who is well-known in the business/finance industry.

Buy a CD

Money.usnews.com recommends a CD as a smart investment.  A certificate of deposit, or CD, is a high-yield savings account in which you squirrel away your money for a set period of time, during which it will earn more interest than if it were in a regular savings account. CDs vary in length, and there are usually penalties for early withdrawal.

If you want to benefit from the higher interest rates of five-year CDs but don’t want to part with a large portion of your money for that long, nerdwallet.com suggests using a CD ladder. Follow the link in this paragraph for more details. Basically, a CD ladder eventually works out to the point where you have a five-year CD maturing every year.

Invest In Your 401(k)

A rocky economy means that many people are shying away from investing in their 401(k), but resist the urge to stop or cut your contributions. In fact, consider boosting your contributions. Even though it does take a little more money from you now, chances are that it’ll pay off in the long run.

Young adults live in the moment, but keep your eyes on the future by making smart investments now. 

Chris Grasso
Chris Grasso
Chris is a freelance writer who also enjoy going fishing. He enjoys the sunshine and all kinds of outdoor activities. Email Chris at chrisgrasso88@gmail.com