Home Finance 5 Investment Strategies for Gen Y to Achieve Financial Independence

5 Investment Strategies for Gen Y to Achieve Financial Independence

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Generation Y has a lot of advantages over the Baby Boomers when it comes to saving money. There are a lot of investment tools and criteria that the Baby Boomers lacked in their generation. Thus, most of the baby boomers were not able to save enough to secure their future. They had to work even after their retirement to survive. They didn’t have enough savings for their retirement days. They only depended on the social security benefit and pension.

Unfortunately, now the social security and pension are not sufficient due to the sky-high cost of living. So, people are more inclined towards achieving financial independence and retiring early. They don’t want to depend on social security since the benefit becomes uncertain. People are now saving money consciously instead of living an extravagant life.

They are also making good investments to achieve financial independence. They don’t want to stretch their work life. They love to save more so that they can stretch their retirement life to enjoy their golden age more blissfully.

They know the right investment can be one of the options to save more for their future.

So, here are some investment strategies that generation Y can follow to achieve financial independence and early retirement easily.

1. Take advantage of different investment vehicles to grow your money

  • Stock investment

Stocks are the part of a corporation or a company which people can buy. Thus, when you by the stock of any particular company you own a part of that company. There are basically two types of shares – preferred shares and common shares. People those who invest in preferred shares generally have higher standing than the people investing their money in common shares. Stock investments can provide you high profits.

  • Real estate investment

You can also invest in real estate to clear the debt. So, if you have real estate properties, you can invest in that by renting it out or give it out for lease. You can also buy and sell properties if you have good knowledge of the real estate market. There are again various kinds of real estate investments like the Real Estate Investment Trust (REIT), investing with the investment groups, trading and renting.

  • Gold investment

Gold investment is another such investment type that can help you earn good money. Gold is a precious metal and the price of gold is increasing day by day. Thus, if you invest in gold you may be able to earn good profits which you can use later to pay off your bills. You can invest your money in gold bars and coins, gold mining stocks, and gold accounts, etc.

  • Investment in Forex trading

Investing in Forex trading is gradually becoming a favorite of the investors because of the numerous benefits it offers. Forex trading involves the exchange of currency of one country with that of the other. The business is thriving internationally as it is not based on any physical boundary. Moreover, Forex trading goes on for 24 hours.

  • Invest in retirement plans

The 401k considered as a good retirement investment option that can help you save money for that time when you won’t be able to have a regular stream of income. You should start investing money in 401(K) or ROTH IRA to maximize the return. Make sure, you don’t withdraw money from your retirement investment. Otherwise, you will unnecessarily end up losing more. so, you need to reconsider the options before starting to invest in the 401k retirement fund as of now.

Investment Strategies

2. Pay of your existing debt with forex

To achieve financial freedom, you have to get out of your current debts as soon as possible. To do so, you can take help of various debt relief options like debt consolidation, settlement, management. But, if you opt to pay off the debts through any of these debt relief options, you will need money. So, try to earn this money through forex trading.

Forex is the market where the exchange of currencies takes place and you can make money on that. But forex market depends on various factors just like the stock market and so you can even suffer losses. Just as forex trading helps you to earn good amount of money, you can even lose huge money to this trading. Trading in this market can get a bit tricky at times. Thus, you should consider the expert’s opinion or help.

3. Get tax benefits with property investment

If you invest in property, you can get a number of deductions on your tax return. These include the interest you are paying on your loan, maintenance and repair, insurance, rates and taxes, fees of the agent and so on. You may even get tax deductions for negative gearing. This is basically the situation when the cost of keeping the property which you have invested in exceeds the income that you generate from it.

4. Consider safe investment

Investments that run a low risk are always popular with amateur investors who are investing just for a financial backup and not as a profession.

For example,

If you invest in property then your returns per year may even reach 10% in some country areas. Even if you buy a property in a metropolitan area, the high price of purchase will soon be compensated by the rental income you will generate.

5. Be educated about the investment market

You should try to make yourself more educated before you make an investment. This will help you know more about the right investment so that you can earn more return. Another thing that you need to remember is that Forex, stock and gold investments are riskier investments in comparison to real estate investment. So, if you are not confident enough about investing in stocks and the Forex market, it is better to try real estate investment.

Lastly, many of you are making an investment to achieve financial freedom and early retirement. But, you should understand that making the investment is not enough, the right investment will give you the best return.

Also, you should try to stay away from debt to avoid losing money on the high-interest rate debt.

If you are already in debt, then you should try to get out of the debt first before making the investment.

2 COMMENTS

  1. Good tips for millennials to start investing, it’s crucial that an investment strategy results in a diversified portfolio and even between stocks, REITs and precious metals as mentioned, this begins to take shape.

    Shared.

  2. […] Another great way to generate extra income is investing your money in different investment vehicles. However, you should be aware of some investment strategies. Investments can help you to grow your money fast. Thus, you can achieve many financial goals. If your investment works great, then you can achieve financial independence as well. […]

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