Different Age Groups, Different Investment Plans
Last Modified on
At different stages of life, people have different goals, savings, investments, and expenses. They also have a different appetite for risk. Financial planning is a dynamic activity and it becomes necessary to invest only after researching well about investment plans and strategies that are best suited for one’s age.
If you reflect back on your life, you will realize how different your financial planning is now as opposed to when you started your career.
Things to consider while picking up Investment Plans as per Age
1. Understand your life and financial goals
To pick out the right investment plan, you should have a clear understanding of your life goals and financial standing. Your wants and needs are likely to change every few years. As a rule of thumb, you should review and revise your financial goals every 7 years. When you review your goals, you can scrape off the things you have already accomplished and be prepared with saving for the next phase of life. You can use a calculator every few years to know how much you should be saving.
2. Know your current and future expenses
You must understand your current and future financial state. Having an idea of your current income and expenses is good, but you must also know what they will look like in the next few years. This will help you to assess your risk appetite so you can pick the right investment plan for yourself.
3. Have an investment plan in place
Apart from setting your financial goals, it is also important to understand the methods that will get you to these goals. Depending on your age, you should ask yourself what you need, before picking a suitable investment vehicle for yourself:
- I want quick returns, even if that means taking a bit of risk.
- My goals are ambitious, and I am ready to work extra and take risks.
- I am not in a hurry and only want to invest in good deals.
- I want to keep my money in a savings account.
- I want to invest in a long-term plan.
- I want to make sure that whatever I am investing in has no risks at all. I want to play it safe and small.
Most youngsters are likely to relate to the first two points, but people over 40 may find better reason in the last three.
How to pick out an ideal Investment Plan
There are several types of investments available in the market. Some offer quick returns and easy accessibility, while others can come with more risks. Also, not all investments are taxed in the same manner. Your age and stance in your career play a huge role in picking out the right investment. If you are financially secure with no pending debts or loans, you can consider investing in shares that have high risks. However, if you already have mortgage, car loans, etc. to pay off, consider traditional methods like 401 (K)s or Roth IRAs.
Your income too plays an important role in deciding the right investment plan. With every pay hike or promotion that you get, your financial goals and strategies need to be amended accordingly.
While youngsters today may be more spontaneous and prefer e-tools and online trading to invest, people in their 40s or 50s are more likely to invest in real estate or consult professional financial advisors and back their investments with research.
To sum it up:
The investment world has a lot of opportunities and plans for people to explore. It is all about finding the plan that helps your money grow the fastest in the most suitable manner. As you grow in your career, learn to alter your plans and goals too. Being dynamic and adapting to the changing times is the best way to keep yourself ahead with your finances.
Are your investment plans ideal for your age? Consult financial Advisors to identify the best plan suited for your needs and goals.