5. There are creative ways to get aggressive about investing, but you need to be well-informed.
According to Jane, many people get themselves into trouble by investing without having a full understanding of the financial choices they’re making. She also says, “For young people who want to learn how to invest directly in companies, implementation of Title III of the JOBS Act earlier this year enabled individual investors to participate in equity crowdfunding and fundraising for private companies through registered websites.” If you are interested in exploring (relatively new) investing route, Jane stresses the importance of consulting a lawyer (who is familiar with corporate law) beforehand to ensure your investment is compliant with applicable laws.
6. You can’t just choose any IRA option. You need to know the differences between Roth and traditional, at the very least.
Your choice between a Roth IRA and a traditional IRA is at least partially contigent on how much you’re bringing in now, and when/on what sum you want to pay taxes. Many experts have offered different opinions on which to opt for, but Jane says if you are making significantly more now than you will be when retired, a traditional IRA may be a good choice.
For a traditional IRA, Jane says “you make a tax-deductible contribution today while you’re in a higher tax bracket, and then pay less in taxes when you’re in a lower tax bracket while you’re retired. A Roth IRA operates in reverse. You pay your taxes upfront, but in return, your distributions during retirement are not taxed. If you expect to have high taxable income during your retirement years, a Roth IRA may be the way to go.”
7. Your 20s and 30s is the only period in your investing life when time is really on your side.
Jane presents a down-to-earth way of looking at investing in your early career years:
“When you’re in your 20s and 30s, time is on your side. It takes more time than people expect to accumulate the kind of financial arsenal that allows us to be comfortable in our golden years. However, it would also be false to believe that time somehow ensures investing success. It doesn’t. More years only means that you’ll have opportunities to try again. Investing inherently means you are taking a risk. I would embrace the uncertainty.”
This article was originally published by Forbes on October 24, 2016