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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