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5 Best Investment Options For Young People

  • September 27, 2018

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5 Best Investment Options For Young People

Face it:

The whole idea of investing and choosing smart investment options can be quite intimidating when you’ve just joined the workforce.

You already have enough on your plate, from student loans to your new life, to think about the stock market or other similar investments.

However, anyone can invest regardless of the number of years you’ve been working.

In this article, we look at 5 investment options and tips you can consider after you get your first job along with some of the best investments to make money.

Start With an Emergency Fund

The first investment you need to consider after you get your first job is to create a cushion for emergency situations.

Venturing into other investments early in life is great but it is important to load your savings account with an emergency fund.

Create a cash buffer for emergency situations. Financial experts recommend saving at least three to nine months worth of your regular expenses before you start thinking of investing.

Related: 6 Best Tips For Starting Your Emergency Fund & Save Money

Take Care of Debts

It is also important to invest in your financial freedom by tackling your debts before you consider investment options such as stocks and other assets.

If you are like most young people, you are entering the job market with the burden of student loans and a host of consumer debts accumulated in your college life. This is the time to take care of those debts and achieve some form of financial freedom.

Prioritize your debts and create a repayment plan. List down all your debts and set your repayment schedule. If paying the debts looks like it’s going to be a struggle, re-evaluate your needs to find a practical way to pay them off.

Remember, you can always get a payday loan online if an emergency crops up even if you’re currently unemployed. Take care of your big debts and you’ll later have enough to invest in other ventures.

Related: Pay Off Debt And Save Money In 2019

Save for Retirement

Most people don’t consider retirement benefits as a sound investment but it is actually one of the best investments you can make. The earlier you start to save for retirement, the better your future will be.

Ask your employer about the company’s retirement benefits. Do they match your contributions to a 401(k)? This is like free money despite being too far off in the future.

Just think of how much you can save if you only invested $50 every month. The sooner you start saving for your retirement, the easier it will be.

Another related investment worth looking at is the Roth IRA. This type of investment allows you to withdraw your savings and earnings tax-free when you attain the age of 59 and a half years. It is an attractive retirement savings option.

Related: How Much Money Should I Save for Retirement? A Look at Savings Goals by Age

Invest in Insurance

The biggest mistake you can make when you start working is to choose to intentionally forego insurance.

Buy renter’s insurance if you are still renting to cover for break-ins and severe weather or fire damage. Your renter’s insurance will also cover items lost if your car is broken into.

Get health, disability, and auto insurance covers too as the future is never certain. If you already own a home, get a home insurance cover too. The insurance cover may later on turn out to be the wisest decision you ever made.

Related: 3 Tips for Changing Your Coverage Or Getting New Car Insurance

Short-Term Investment Options and Mutual Funds

Once you’ve taken care of your debts, set aside an emergency fund, and made plans to save for your retirement, it is time to put your money to work for you.

It may be quite challenging to know where to start but experts recommend investing your money in safe short-term instruments. Good examples include bank deposits, Treasury Bills, Money Market Funds (MMFs), Commercial Paper (CP), Short-Term Bond Funds, and Certificates of Deposits just to mention a few.

Short-term instruments provide a better option than simply letting your money idle in the bank. You can also invest in good mutual funds.

All these options will gradually help to grow your funds over the years. If you can’t make head or tail of sound financial investments, you can always the valuable advice of a professional fund manager.

Related: 4 Golden Rules That Will Take Your Investments To The Next Level


You’ll generally be bombarded by numerous investment options when you join the workforce. The most important thing to remember is that your investment efforts may turn out to be another cause for stress if you are not well prepared or informed.

Take care of your debts and plan for your retirement before you put your money to work. The earlier you start saving, the easier it will be to invest for the long term.

By learning how to invest young, you will be well on your way to making money with your investments down the road.