Investing is ingrained in our brains even as young as childhood.
They — referring to the adults in our lives like parents and teachers — tell us things like, “A penny saved is a penny earned,” and “You have to spend money to make money.”
Those old investing proverbs, as cliche as they may seem, are often our first valuable lessons when it comes to saving money and building wealth.
These are lessons that we can take with us into our teenage and young adult years, particularly when the time comes to start seriously thinking about our futures — and the role investing plays in our financial success.
In this blog, we’re going to run a quick refresher course on how to get started with high return investments at a young age, including what you should know, which products you should consider, and who you can trust.
The first thing you need to know when you get started investing is to understand the various intricacies of interest rates.
For example, you may initially be intrigued when you learn that your savings account earns interest over time. However, those interest rates are so miniscule — typically less than one percent — that your money generally doesn’t see much growth. It’s not always a bad thing to have your money sitting safely and securely in the bank, but if you are planning on growing your wealth and adding to your savings, then you need to know which products have high, advantageous interest rates.
One lesson that you may learn early on as well is about compound interest, and how it helps you accumulate and grow savings at a reasonably fast pace. Compounding interest is a lot like pushing a cartoon snowball down a hill. As the snowball rolls down the hill, it gets bigger, and bigger, and bigger, and bigger. This is what happens with your money when you compound your investments.
Annuities are typically one of the best places to look when it comes to that. Often times, annuities feature fixed interest at decent rates, and you can always choose to compound your returns rather than receiving your monthly payments.
Learn more about fixed annuity interest rates from Tactical Wealth.
Learn The Lingo
Too often, we see investors young and old who simply don’t understand the terminology associated with investing. That’s no fault of their own, of course, as the industry was designed by and for those in the already in that realm.
The best thing you can do to set yourself up for success while investing at a young age is to get associated with some of the most common jargon.
To help you with this, we wrote a blog titled “Investing Terms You Should Know.” Check it out when you get a chance.
Don’t Get Fooled
When it comes to investing, many of the big brokers and firms will try to trick people into making investments based on the potential for growth, rather than real, firm data.
For example, some annuities will offer you interest rates as high as seven to eight percent, which appears to be unbeatable and extremely advantageous. And it is, when you can get it. However, what they don’t tell you is that these rates are entirely dependent on the stock market. Any fluctuation in the market could result in a dip in not only your rates, but your overall annuity value.
When it comes to investing, it’s best that you start as soon as possible. Whether it’s through a simple savings account, or an individual retirement account (IRA or 401K), the sooner you can start setting money aside, the better off you will be.
Remember: investing is about more than just stocks and bonds. There are other reliable high return investments out there which can help set you up for financial security and peace of mind throughout your life.
At Tactical Wealth, we want you to be as well-informed as you can be. Contact us today to learn more about getting started with high return investments like our fixed income fund today.