Congratulations on taking your first step towards investment! Starting to invest in real estate might sound tough, but you made it here - and we're definitely going to help you fully prepare to get started.
If you're in your 20s, you could basically stash as much money away as you could afford without giving any real thought to other priorities. But what exactly do you need to prepare before investing, you can check out our Real Estate Investment Guide for "How to Successfully Invest in Real Estate in Your 20s" to know.
In your 30s, you can't do that. You have different priorities. So you have to play the game of financial balance.
Here's a list of life events in your 30s that you'll need to keep in mind to calculate your investment budget before you start investing.
The tough part about getting started investing in your 30s is that your 30s are typically filled with major (and expensive) life events. Some big events include marriage.
The median age for men to get married is 29, and for women are 27. That means a good portion of millennials is getting married in their 30s.
And with the average cost of a wedding at $26,645, that's a big expense to stomach. Many people are waiting to have children as well. The average age at which women are having their first child continues to rise.
Finally, all of these events are typically coming at a time when people are just starting to earn a little more money at work, and have gotten their student loan payments a bit more manageable.
Talking to a financial planner about life events is recommended. The reason? The same financial plan should work during the same period of the life event. For example, if you create a financial plan as a newlywed, the same plan should work for you until you have children.
Whether you currently have children or plan to start a family down the road, it helps to create a savings plan for general expenses as well as longer-term goals such as their school or college tuition. You may work with a financial advisor to build a plan to reach other savings goals associated with your kids.
Not all debt is toxic; student loans tend to have comparatively lower interest rates, so you can feel OK about paying them off slowly while you save for other goals like retirement or homeownership. However, some people prefer to pay down student debt aggressively, which is a good route when you can afford it and feel comfortable making some sacrifices. An undeniable reality for millennials is that many of them are confused about navigating student loan repayments.
Finally, all of these events are typically coming at a time when people are just starting to earn a little more money at work, and have gotten their student loan payments a bit more manageable. So, how do you overcome these major life events while still investing in the future?
Before you make any plans, take a minute to look at your student loan debt. Familiarize yourself with the total balance, your interest rate and the date when your final payment is due. That will give you a better overview of how these loans could impact the other goals you’re trying to achieve. If you want to pay off your debt quickly, consider how much you would need to pay every month to knock out your loans within a few years — and whether you can afford to make such aggressive payments. New graduates who get a well-paying job right out of college or grad school could be in a better position to do this when their cost of living is low.
For those not making a high salary right away, there may be other tradeoffs to consider so you can prioritize paying down your debt, like living with family after graduation. If you take advantage of this opportunity, make a plan to put the money you save toward your loans. Making the minimum payments on your loans can also free up cash in your budget so you can focus on other responsibilities, such as saving for retirement or buying a home.
When student loan debt stresses you out, take a look at your big financial picture and remember that you can still have a good credit score, qualify for a mortgage and start saving for retirement while you chip away at your loans over time. Paying off student loan debt can be a drag, but it doesn’t have to overwhelm your life. Start by making a payoff plan, make sure you have room in your budget to cover your expenses, and then slowly think bigger, setting aside cash for the crisis, and eventually saving for your future dreams.
When you're in your 20s, it doesn't make a lot of sense to meet with a financial advisor. There simply isn't enough they can do for you to make it worth it. However, in your 30s, it can make sense to meet with a financial planner to discuss creating a plan if you don't feel comfortable doing it yourself. A fee-only financial planner is recommended to put together a financial plan for you.
We recommend talking to a financial planner about life events. The reason? The same financial plan should work during the same period of the life event. For example, if you create a financial plan as a newlywed, the same plan should work for you until you have children. Here are some good life events to think about meeting a financial planner:
An alternative to meeting with a financial advisor, if you just want to stick to investing, is to use a Robo-advisor. These are online platforms that do all of the investing "stuff" for you, like setting up an asset allocation and rebalancing your portfolio. While most Robo-advisors can't help you with a holistic financial plan, they are great tools for investing.
Now that you have an idea of the other aspects in your 30s you should consider before starting to invest - you can start investing! Click here to see what you should do next to successfully invest in real estate.
Investing in your 40s doesn’t necessarily mean you need to act overtly cautious. It doesn’t mean you’ve got to be extra adventurous either. It’s all about balance and finding the risk level that’s right for you.
How do you do this, you ask?
Well, you’ll need to ask yourself the right questions. What are your investment goals? How long will you be investing for? And how comfortable are you with risk? If you don’t like the idea of your investments having large swings in value as the markets move, then you may look to choose a low-risk investment strategy.
One thing to note is that by taking less risk to minimize your losses, you’re also limiting your potential for growth. But if you’re less concerned about market movements and are planning on investing for a number of years, then why not consider higher-risk investments like shares or real estate?
Whatever your risk appetite is, try to think about diversifying your portfolio as it could help mitigate risk. By spreading your money across investment types and regions, the likelihood of losing everything should decrease. So, make sure you have a good mix of investments to help spread your investment risk.
Now that you have an idea of the other aspects in your 40s you should consider before starting to invest - you can start investing! Click here to see what you should do next to successfully invest in real estate.
Your fifties are an important decade. You’re near enough to retirement to feel its hot breath on your neck. You are potentially in your peak earning years in your career. If your children are finally on their own, your household expenses may be lighter than they’ve been in decades. Mortgage debt should be declining, if not paid off already.
The first thing to consider is what your priorities are for the money you intend to invest. If you have a timeline in mind that is longer than five years, you are probably going to be more focused on growing the size of your pot. If you are closer to 55, you may be starting to think about winding down a bit on your career and enjoying the fruits of your labour. This means you should probably think more about generating an income from your portfolio, but with some capital growth too.
Any investments that you made in your 30s and 40s were likely put in accounts that were more susceptible to the ebbs and flows of the market. Investments often go up and down in value, and when you were younger, you had more time to make up for potential losses if the cookie crumbled that way. However, this is the time to reconsider where those investments are going – think of the lower risk for more security.
Take some time to review your spending plan. How much each month is required to keep up your lifestyle? How about every year? Factor in regular payments (like phone bills or mortgage payments) as well as day-to-day expenses like groceries, gas, and fun stuff. Your current plan is likely the closest it will be to your retirement spending plan, minus any savings you currently do.
We’ll all need to use credit on occasion, but be careful not to rack up debt. In 2009, one in three Canadian retirees held mortgage or consumer debt. Although retired Canadians carry lower debt than the working population, paying it can take longer – and that means more accumulated interest. The best way to avoid debt is to save. But if you’re currently struggling, create a plan that decreases your expenses.
If any of these questions were hard to answer, consider working with a financial planner to help you get the most out of the final stretch pre-retirement. They’ll also prepare a solid plan for you during retirement.
Now that you have an idea of the other aspects in your 50s you should consider before starting to invest - you can start investing! Click here to see what you should do next to successfully invest in real estate.
This era begins with a plan of your retirement, which is one of the most important phases of your life. Many people furnish everything in order to adorn this stage. If you choose to keep your nest egg within the super system, it’s important to decide how you would like your money invested. For many retirees, capital preservation is a key priority. You may want to shift your super to a more conservative investment strategy as you head into – and through – retirement.
As a retiree, you may be able to claim income support payments such as the age pension. To be eligible for Age Pension you must be 66 or older and meet certain asset and income thresholds.
It’s worth checking your eligibility, which you can do so here. Even a small payment can see you entitled to valuable concessions on a range of costs from car registration to public transport.
After a lifetime in the workforce, retirement is a big step – and the beginning of a new life stage as well. A household budget is a useful tool to help you manage your money. Maintaining social ties is a plus for your mental wellbeing, and raising a hand for volunteer roles can help you stay engaged while supporting your community.
Now that you have an idea of the other aspects in your 60s and above you should consider before starting to invest - you can start investing! Click here to see what you should do next to successfully invest in real estate.
A Chinese proverb says: “The best time to plant a tree was 20 years ago. The second-best time is now.” That attitude is at the heart of investing. No matter how old you are, the best time to start investing was a while ago.
So, it’s always the best idea to start investing from an early age, as you would have more recovery time, you will be able to gather more savings, early age investment will improve your risk-taking abilities, time value of money will increase over a period of time, soon you will have a secured future, even you could turn yourself a creditor and so on.
These sorts of options will create a healthy retirement life for you.
But if you did not manage to start investing from an early age, that does not mean you have lost the business potential. Because there is no age barrier for opening an investment. It's never too late to do something. Just make sure the decisions you make are the right ones for your age — your investment approach should age with you.
It's also a good idea to meet with a qualified financial professional who can tell you where you stand and where you need to go.
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