Don’t delay, start investing today

Post by: Amina Isakovic

Here we are, in our early twenties, about to graduate from a prestige school and be thrown into the “real world”. What’s your plan after graduation? What will you do with that bonus ABC company offered you? Are you going to spend it on a new car, a new Dolce & Gabbana bag, or put it in a Roth IRA? Is it too early to think about retirement? The best time to invest and be aggressive is when you are young. Would you believe me if I told you that you could net at $3.5 million at age 72 if you invested $5000 in the market at age 18 and left it alone? See for yourself here.

There are so many excuses as to why not to invest early. From “I don’t make enough to put anything away,” to “I still have college loan debt.” But these excises are huge mistakes. With the social security fund quickly running out money, the personal retirement 401(k) fund, will be the main source of income for most people, and most certainly for our generation.
So where do you start? There are a few steps you can do today as a young college graduate, to ensure a large fund in the future. Besides having a balance sheet for your personal financial record keeping, and putting away as much money a year as possible, once you have a position with a company, here are the things you should do:

1) Be aware of all your tax-related benefits
2) If you’re getting a tax refund this year, use the money to fund an IRA
3) Think about using a so-called target-date retirement fund in your 401(k)
4) Take full advantage of the company matching contributions
5) Use any annual raises to add to your 401(k)

More detail to these points can be found here.

Now that you know a little bit more about the opportunities of saving at a young age, what’s your next move?