Saving can help someone tide over when money is tight, but it’s investing that creates wealth. But with it, timing is also everything. This makes the thirties the best period to start building and diversifying one’s portfolio.
By then, you already have a more stable job (and even receive a few promotions), so you can be more consistent with putting money for investment. Second, hopefully, you’ve already created an emergency fund and, thus, now have extra cash for investing.
Third, you are likely to be much wiser with handling money. You have a better idea of how much goes in and out, so you can also plan your budget well. Lastly, at this age, you may already be halfway through paying your student loans or smarter in controlling your credit card debt.
The question is, which of the many investment options are ideal to begin with?
1. Real Estate
Even in places like Australia, where many areas remain unoccupied, real estate is a premium investment. The closest you are to urban areas, the more both land and home appreciate fast.
In the country, however, finding affordable real estate is challenging. The average home price is already over $800,000 as of the last quarter of 2020. In Sydney, it could cost a lot more. Here in the capital city, buyers spent an average of $1.2 million during the same period.
Melbourne came in second with many houses costing around $930,000, but there’s some good news. Certain types of houses and land in the west of Melbourne can still be worth less than $200,000 the average price.
It could be because these developments are still in progress and homes are still under construction. While you cannot move into the property now, you can buy it at a cheaper rate and allow it to appreciate as quickly as the other homes in the surrounding areas.
2. Stock Investing
Investing in stocks has become extremely popular among millennials in Australia, based on recent data. The number of active online investors in the country reached 1.2 million over the past year. Meanwhile, nearly half of them were first-time traders.
Two factors are driving the demand for stock investments. Besides the COVID-19 pandemic, which gave many young people enough time to learn about the market, several are trying Robinhood investing.
This can refer to the app or the kind of investment strategy that allows someone to participate in the market without paying any fee or commission. Instead, they may buy a subscription.
The report suggested that of the 40 percent of millennials between 26 and 40 who traded for the first time, around 30 percent used a micro-investing app like Robinhood.
Keep in mind, though, that stock investing isn’t for everyone. Even if the returns are huge, the risks can also be high. That includes placing one’s money on apps like Robinhood.
Stock investing may not be ideal for those with a conservative risk profile. But if you’re willing to lose a few hundred, you may want to invest in it now since you will have more time to recover.
3. Cryptocurrency
If the stock market doesn’t appeal to you, then perhaps cryptocurrency exchange will. Cryptocurrency is a digital asset wherein transactions come with security features and are maintained and verified using a decentralized system.
Some popular cryptocurrencies are Ethereum and Bitcoin, but dogecoins, which others call a joke currency, are also gaining traction. Some blockchain platforms may also use tokens instead of coins.
You also have many ways to earn coins. Besides traditional trading (selling and buying of coins), you may get them when you participate in any part of the process, such as verifying transactions or mining. Some crypto-based apps like Bitrefill will let you receive these digital assets as cashbacks.
The cryptocurrency market is set to grow by at least $1.5 billion in 2021 and over $2 billion within five years. If you want to join the industry, now is the perfect time as currencies are more “affordable,” and you can give it more time to grow.
You also have access to other ways of generating cryptocurrencies or investing in other digital assets known as non-fungible tokens. But like stocks, cryptocurrencies can be prone to wild fluctuations. To minimize the losses, think long-term.
Investing is one of the best ways to grow your money many times over. But contrary to popular belief, it is not as passive as you like it to be. It still requires studying the market, knowing how much you’re willing to lose, and monitoring your growth. Fortunately, because you’re still young, you can do all these more confidently.
