As an investor, you are faced with a multitude of different ways in which you can invest your money, which can often seem overwhelming. However, with the help of the digital web, you can educate yourself on the different types of investments.

Professional financial advisors will often suggest that you should start investing in your future as early as possible, and for good reasons. Investing at a younger age requires less money every week, improves your quality of life later on and investments simply need a long time to grow. You must also know your investment goals and the different options you can choose from.

Short-Term vs. Long-Term Investing:

Before choosing where and when to invest your money, the most important thing you must do is consider your risk tolerance. The idea of calculating risk versus reward is predominant to clever and successful investing. You also must understand your investing goals, whether that may be long-term or short-term.

For short-term investing, some options you should consider include high-yield savings accounts, structured notes, short-term bond funds, CD ladders and money market accounts, and fixed income funds. Although keeping money in a secure type of investment such as bonds is reassuring, it often results in very little gains, deeming bonds as an inadequate long-term investment. Instead, for those who have a few years before they will need their cash, some of the best long term investments include index funds and ETF’s, 401(k) plans and IRAs, and 529 plans.

Long term investors also often choose to invest their money in stock market equities for several reasons. This is because the majority of “bear-markets” often last between 8 and 16 months, indicating that a long-term investor can afford a higher risk during down market times since it is probable that their investment rebounds before they need their capital. That being said, it is wise to start investing as early as possible after you perform some extensive research and familiarize yourself with the different ways in which you can invest. Below is a list of the 5 investments you must make before your 30th birthday

Stock Market:

The stock market is an excellent place to begin investing while you’re young for many reasons. For example, the S&P 500, a stock market index that calculates the performance of 500 of the biggest companies that are listed on the stock exchange, consistently provides nearly 10% return each year. Although this is a promising fact, the stock market also has some risk such as volatility. If you invest with long-term goals however, your investment is very well capable of rebounding after a down market. Investing in the stock market is quite simple. First, you must choose how you want to invest in the stock market, meaning how “hands-on” you’d want to be when picking the stocks to invest in. Next, you will need to open an investing account with a reputable online broker such as TD-Ameritrade, E-Trade or Merrill. After opening an account, just set a budget and start investing.

Physical Commodities:

Physical commodities are simply investments that you physically own, such as precious metals like gold or silver. With this type of investment, you would simply order the commodity online from a reputable company such as Goldstacker for example, and get them delivered right to you. This is an excellent indemnity during difficult economic times.

Index Funds:

This investment type is perhaps the easiest and safest way to enter the stock market. Index funds buy stocks of every firm that is listed on the index to imitate the entire index’s performance. Index funds are typically very safe, have little to no fees and are a good way to lower the investment risks.

Bonds: 

Bonds are simply loans that you provide to the government or a company, and receive an interest in return over time. They are typically safer than stocks but also offer much fewer returns. You receive your interest typically once or twice per year until the bond’s maturity date.

Mutual Funds:

Mutual funds enable people to buy an allotment of stocks with a single transaction. These funds gather and collect money from many other investors and employ a manager who invests that money in bonds, stocks or other assets.

Investing while you are young is one of the best financial decisions you can make. It is also equally as important to diversify your investment portfolio and educate yourself as much as possible.