Monday, October 26, 2015

What are the Top Investments after Graduating College?

Top Investments by jonah engler

According to a survey conducted by Adecco Staffing US, recent college graduates don’t place confidence in their future retirements. Specifically, merely 19% of study participants believe Social Security will even exist by the time these twenty-somethings retire, and just 46% believe their personal savings will completely finance their retirement lifestyle(s). If worrying “what’s next” fills your thoughts, perhaps these ideas can sooth or solace:

1. Open A Corporate-Sponsored 401(k)

To be blunt, the 401(k) may be the best investment option. Many professional youngsters automatically begin putting their futures in peril by not contributing to retirement plans offered through their job. A lot of companies offer “safe harbor” and similar programs. Such programs give employees free money. For those without the vocab, safe harbor contributions are funds paid by your company permanently attributed to the employee at the moment of contribution. Even after parting ways with the company after only weeks, the safe harbor funds are owned by the “employee.” Match programs are just as they sound; your company matches your 401(k) contribution, dollar for dollar, usually with a maximum from the company, but still, it’s free money.

There are many companies willing to do this for various percentages. The easiest way to find out about a company’s retirement plan, visit the HR department to discuss details. The sooner a 401(k) starts, the larger the benefits to reap at retirement.

2. If 401(k) is Not Your Style, Try a Roth IRA

Unfortunately (literally) some companies don’t offer a 401(k) employee benefit. But fear not, because there’s still hope.

Liz Pulliam Weston reported on just $3,000 invested annually in an IRA from ages 22 to 32 alone yields $550,000 by the age of 65 (assuming 8% average annual return). By contrast, if you until after working 10 years after college to begin an IRA with the $3k annual contribution, an IRA only grows to $437,000.

3. Consider a Government Consolidation Loan

Any credit card obtained during college days can transfer to a low-rate card. Liz Pulliam Weston of reports the average college student presently graduates over $20,000 in debt, with the average entry job salary at $30,000. Sallie Mae found many college grads now owe the greater sum of this debt to credit card debt. In their report, undergraduates carry a record high credit card balance, averaging $3,173.

“You’ll see huge savings by transferring your balance from a high-rate student credit card,” explains Charles Tran, research director of the consumer credit card comparison site CreditDonkey. “For example, if you have a student credit card with a 23 percent APR and a $3,173 balance, you will pay $2,783 in interest and will take 13 years to pay off the balance when making the minimum payments.”

Tran continues: “By simply transferring that balance to a low-rate card with an 11 percent APR, you will save $1,878 in interest, and it will shave almost four years off your payment schedule.” The advantage is minimum monthly payments are not required while reducing credit card debt.

4. Invest in Yourself

Too often recent grads go straight from college to financial investments and insomnia. Remember what education was originally intended to accomplish. Heuristic education or self-administered continuing education greatly increases future income potential. Take time to research and study new career development opportunities through webinars, workshops, extension courses, certification programs, or even just a few nights a week with a good book to discover a new way to synthesize formerly disparate talents into a new, innovative self, outdoing anything otherwise planned.

Investing time and money in self-development, both in skill and mind, helps catch a superior’s eye as he or she is looking to promote. Job opportunities leading to higher pay and quicker ascent become more visible to you than the majority of professionals, who focus only on their career while they work their youth away. Whichever investment seems best now, it’s never too late to grow.

Jonah Engler is a financial expert who loves to invest in risky stocks.

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