How Should Your Investing Approach & Goals Differ By Age?

How Should Your Investing Approach & Goals Differ By Age?

Are you planning for retirement? Saving for your children’s tuition fees? Or looking to grow your wealth in general?

Let’s look at some of the most common approaches for investors and some strategies to consider based on your age.

Investing at 20-29: Invest in Yourself

Investing is one of the most important things you can do for your future. But where should you invest? If you are in your 20s, it’s time to think about investing in yourself.

When you are in your twenties, starting investing little by little to build your investment portfolio.

Investing early is important because it gives you more years to compound interest and grow your money, before life gets too busy to think about saving.

It also creates good habits from a young age which carry over into adulthood as well.

Leverage time, and remember the power of compounding. Small habits over time will yield significant results.

Investing at 30-39: Keep Things Simple

The thirties often mean that there will be additional responsibilities. The average 29-year-old is married and planning a family. This, of course, means you are planning for your future but also have more expenses.  

A common strategy for those in their 30s is to invest a portion of their income into equity investments that have the potential to grow while still ensuring some protection from the loss of more conservative holdings.

People in this age group often face “a dilemma” because they are finally on track with saving and investing but may be unsure whether to remain invested in stocks or buy more conservative assets.

Some people may decide that they want a bit of both — like buying both shares and bonds, for a diversified investment plan that helps mitigate risk.

Investing at 40-49: Diversify

In your 40s, you want to set up emergency funds and diversify your investments. A diversified portfolio is vital for both financial security and peace of mind. Investing in bonds, shares, or a combination of both is critical for this age group because you want to ensure there will be money coming in when you retire, even if your investment options go down. 

You may also decide to invest in low-risk funds or exchange-traded funds (ETFs) to have steady returns.

Investing at 50-59: Strategize and Maximize

Retirement age is all about strategizing how to maximize your retirement income and plan for the future. You’re likely to spend more time at home with your family and not need work income. The challenge is balancing those financial goals between enjoying life today without worrying about tomorrow.

Build your retirement income portfolio in a way that allows you to ride out future market volatility. You can start by developing sources of retirement income that won’t drop if the stock market crashes, such as fixed income assets like bonds.

If you’re already on track for retirement, you can continue doing what you’ve been doing in earlier decades. The closer you are to your retirement date, the more likely you’ll want lower risk in your investments. You’ll probably consider lowering your stock market exposure and increasing the focus of your investment plan on bonds and cash which are less volatile.

Final Thoughts:

Regardless of your age, a long-term investment strategy is an intricate and delicate process that requires careful planning. A simpler solution for smoother, easier investing is to invest in a fully-diversified investment plan that balances different asset classes in a way that suits your risk tolerance levels.

SmartWealth by NBK Capital will help you plan your investments while considering the constantly evolving market so you can look forward to retirement as it should be: enjoyable!

Sign up with SmartWealth for an investment plan that suits your needs and preferences at any age.

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