Investing in your 30s: It’s Never too Late

It’s a proven fact that fewer millennials are investing than previous generations. As your 20s come to an end, financial security becomes a more pressing concern. You may be asking yourself, “Is it too late to start investing in your 30s?” The short answer is that it’s never too late. Even if you are a latecomer to the investing game, you still have many years of earning potential ahead of you. Thanks to compound interest, it is within your power to build a strong retirement portfolio. Here are a few things to consider for first-time investors in their 30s.

Set Realistic Investing Goals

One of the most challenging aspects of investing in your 30s is that this stage of life is riddled with major changes. Paychecks have to cover huge expenses of school, weddings, children, mortgage payments, medical care, debt, and daily living. It can be extremely difficult to allocate large amounts to your retirement fund.

Your investing strategy needs to maintain a financial balance with the other aspects of your life. The best way to achieve this is by setting realistic and attainable goals. For many people this includes having enough for immediate expenses, providing for your family, saving for the future, and setting aside emergency funds for unforeseen events.

Assess your Risk Tolerance

The most difficult question when you start investing is how much you need to begin. This answer varies greatly depending on your financial goals and risk tolerance. In order to get good returns from your investments, you need a portfolio that reflects how much risk you are willing to take.

If you are more conservative with your investing strategy, more funds will be allocated into traditional, low-risk stocks and bonds. If you feel more comfortable with market fluctuations, your investments will include more real estate and international exposure. Aggressive investors may see higher returns, but they also have the potential to lose it all.

Your risk tolerance is a vital question that you need to answer before jumping in feet first. It requires serious reflection on your future goals and open communication. Include your partner in the discussion and don’t be afraid to ask for help.

Meet with a Financial Advisor

If you are still feeling uncertain of taking the first step alone, contact a financial advisor to guide you through it. Just like your income, your financial needs grow and change over time. There are several types of advisors, so you should choose someone that understands your goals and financial situation. There also needs to be a certain level of trust since you will need to share private information about your life plans.

However, the beauty of the digital age is that technology presents other alternatives. If you want to focus solely on investing, there are many robo-advisors available to you. These online platforms can handle  your asset allocations, portfolio rebalancing, and investment calculations automatically. Just be aware that robo-advisors are only a tool, not a holistic investing strategy.  Please also be aware that robo-advisors won’t necessarily do any due diligence.  You’ll need to do the research on your own.  Incidentally a good place to start might be checking insider buys and sells, that will tell you if company management is dumping their shares or not.

The Next Step for Investing in your 30s

Investing in your 30s is a lot more complicated than in your 20s because you have more responsibilities. However, don’t get discouraged or beat yourself up for not starting sooner. The bottom line is that you have time, but you need to start somewhere. Hindsight is perfect, but don’t dwell in the past. Get moving and start building towards a more secure future.

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Why Aren’t Millennials Investing?

millennials investing

Why aren’t millennials investing?

Millennials investing seems to be a scarcity in this decade, but it doesn’t mean they shouldn’t. So what’s the problem? Why aren’t we millennials investing more?

I can’t speak for everyone, but I know personally, my top reasons for not investing in earlier years are as follows:


  • Lack of funds. When I first graduated college in 2009, I was feeling the recession along with many other freshly graduated college students.
  • Lack of knowledge. I never felt confidently enough to invest. I thought the risk was much too large and that the return would reflect this.
  • Lack of skill. I did not create a steady budget for myself nor did I have any type of savings. My personal finance skills were nonexistent.

Over the years, I’ve educated myself and learned the importance of investing. I’ve also improved my personal finances by taking the time to grow my savings and seek out financial opportunities. But, despite the improvement of the economy over the years, the rate of millennials investing is still low. Why is this?

Various studies show similar reasons as mentioned above as to why the amount of individuals that dedicate time to invest is lower than in previous generations. If parents were not encouraging or enforcing the investing, it seems to have rarely happened on its own. Or rather, it takes longer for it to happen on its own.

We need answers.

While this age group tends to be stereotyped as self-centered and entitled folk who are focused on instant gratification and all things digital, these studies portray a different (and more accurate) light. In addition to simply a lack of investing confidence, Merrill Lynch’s Private Banking and Investment Group’s survey on millennials and money shows that this generation is very careful in making investment choices. They want to be “shown the math.”

We want more control.

Merrill Lynch’s survey also found that trust is a big issue for millennials investing. In fact, 72% of the 153 young Americans surveyed stated that they are “self-directed in their investing.” We’d rather be the ones making the decisions than having an adviser we don’t trust working with our cash. We want to invest with people or resources we personally trust rather than just any certified professional.

We’re more conservative (when it comes to investing).

Millennials, in terms of money, have been compared to post-Great Depression era. We not only watched what happened to our parents in the early 2000’s due to the stock market crash and recession, many of us experienced it ourselves after college. Jobs were harder to come by, and therefore, our focus has shifted. We are just as concerned about our parents and their future as  they are with us. UBS Investment Bank’s 2014 survey confirms this notion. We do our research and are much less willing to take high risks with our money. Although high risk investments do often yield high returns, we are typically holding more than half of our assets in cash, according to the research.

Surprisingly, the results of these surveys show that it is more about being careful and not as much about student debt. We are still feeling the effects of the financial crisis, and this generation needs more education on the topic in order to confidently create a diversified financial portfolio. Millennials tend to have more short-term investments instead of long-term, and we also tend to care more about life experiences than substantial wealth.

The good news is that there are more online tools and resources to help educate and guide millennials on investing. WiseBanyan and Acorns are just a couple of examples of investing sites to get a beginner started. Additionally, if nothing else, young Americans should at least focus on a retirement account as their form of investing, whether it be a workplace 401(k) plan or a Roth IRA.

Knowing the importance of investing is the first step in this process, and it’s one that we need to know we can truly benefit from with the right tools and knowledge.

Are you a millennial who invests? What routes do you take?