Despite the financial challenges that student’s loan pose to many college graduates, this should not deter them from building an investment portfolio that guarantees their financial future. Today, statistics shows per-student debt figure far above $30,000 and the situation is worse among medical and law students whose debt get as high as $100,000. The reality of the financial crunch college graduates are subjected to calls for a well informed approach to edge graduates out of the disturbing trend.
Sending a portfolio must be at a priority, irrespective of how little the amount may be. These few tips will be of immense help.
Start with little drops
Starting small may be a realistic approach for someone who is heavily indebted already. With online platforms like betterment and Acorns, you can get to invest those little drops. Acorn rounds up whatever spent from linked credit and debit card purchases and invest it in six different funds depending on the risk tolerance of the investor. Acorns is best for young investors who want to avoid brokerage houses. On the other hand, Betterment is also an online platform that helps invest money in both stocks and bonds and it is a good way a young investor can get started with just a little monthly investment.
Get the best Employer Matching
Getting the free money offered by jobs that offer 401(k) employer match is the way to go by ensuring requirements are met to get full match. A 401(k) or individual retirement account (IRA) is the way to go for a investment savvy young worker. As much as paying off debt is important, the future at retirement is also important. If this is done early, with the multiplicity that comes with compound interest, $50 a month can get you $1 million at retirement.
Be Frugal and Invest your Savings
Frugality comes in different shades, big and small decisions can save you some cash. One of it is your location. You end up spending more despite your high earning in cities like New York or San Francisco because more than 75% of your earning goes into rent. Take a look at Austin, Texas that takes just 36% of your earnings in rent. You would have freed up money with that decision and these can be applied to different areas of your finances.
Get Educated in investment
The internet offers you great resources at little or no cost in investment education. A young grad may not be able to hire a reputable financial advisor but he/she can read his blog to tap into the knowledge such professional offers. A one-time meeting can also help to set the right financial goals and help to take a holistic look at your financial predicament offering needed advice. The one-time appointment with a financial professional can help in creating a strong long-term financial plan. A regular consultation with such professional may not be affordable at this stage, but a one-time appointment should be given consideration.
