Let’s say you’re one of the millions of American young people who have a job, but not a particularly impressive career. You work hard, enjoy what you do, but you still bring in less $40k a year. There’s nothing to be ashamed of if you’re in the scenario (I am too). But you know that you’ve got to make some serious investments in your 20’s and onward if you hope to have more than Social Security to fall back on when you retire. Life is expensive. Let’s say you have $500 max that you can spare as savings/investments each month. That’s just enough to max out an IRA every year, leaving you little else in the bank account to cover more than the basics of life. Retirement investments are sensible, and you almost surely won’t regret them, especially as time goes by. But are there alternative methods to prepare for your future, rather than the longterm mutual fund/ETF strategy so many use with retirement brokerage accounts? Here are 3 alternatives that a lot of people use, sometimes without even realizing they are making viable strategy.
- Invest in Your Education. Many people get through college not knowing what they want to do with their life. They haven’t entered a good career path and now, a few years later, they realize what they missed in college. For people like this, it may be time to go back to school. You have more life experience, and you how more about your natural faculties, your drive, your intelligence. Perhaps getting a two-year degree or, heck, going to medical school, is something you could handle now that you simply couldn’t as an undergrad. Education is expensive, but if you make it pay off in a real career after you graduate, you can pay for it many times over. Don’t let a wasted college experience keep you off of education for the rest of your life. If school can change your life financially more than steady retirement investments, feel free to forego investing in your 20’s for furthering your education.
- Invest in Your Experiences. There are facets of life that can’t be tabulated according to finances. If you haven’t been anywhere or done anything outside of your normal life, take a risk. Move to the city you’ve always wondered about. Leave your job to try to find something more challenging and engaging. Move overseas for a couple of years and learn a new language well, teaching or doing something else to pay your way. Even if you are older than the age people usually do these things, it can be worth it to you by expanding your options for the future. Experience is like that. It pays unpredictable dividends, and you might wind up with a better future than if you invested all your spare resources conservatively.
- All of the Above. Some people make living life a priority, all the while saving for their future. These people usually have to work extra hard, putting in long hours, and making sure they prioritize travel and other goals. But it can be done. Don’t let what most people do with regard to their future define what you Take classes at night. Find excuses to travel and always be looking for deals. Create a side hustle that earns you the money you need to invest every month. Basically, make it work. You’ll be a hero to your friends, and you’ll feel proud of yourself. It’s not a bad way to live.