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In Your 30s? This is How You Should Be Investing Your Money

By the age of 30, most people are out of college and well into their careers. Many have already experienced a job change, maybe a few promotions, and are finally feeling like they have extra cash to put into investments. But with so many investment options, where do you even start?

middle age man looking at stock chart on laptop

Your investment strategies should change throughout your life, depending on your needs and financial status. It’s just getting started that seems to be the biggest hurdle.Here are six of the best investment strategies for 30-somethings:
  1. Pay Off Debt.
While initially it might not seem like an investment strategy, your first step should be evaluating any debt you may have. Paying off debt and interest can hold you back from meaningfully contributing to investments, because this is cash you could be using to grow an investment portfolio. Focus on paying off your high-interest debt, like credit cards, as quickly as possible in your 30s. Then work your way down to the debt with the second-highest interest and pay that off, and so on.
  1. Revisit Your 401(k).
Most companies offer a 401(k) investment option as part of their benefits package for employees. You probably enrolled in your company’s 401(k) plan in your 20s, but have you revisited it since? If you’ve earned raises since you started, you might have more money to put toward your employee percentage. And make sure you’re contributing enough to get your company match. Might as well take full advantage of this company perk!
Now’s also a good time to roll over any 401(k) accounts you may have from previous jobs, and place them all into one account.
  1. Open An IRA For Retirement Investing.
In your 30s, you might want to bolster your retirement savings with an Individual Retirement Account (IRA). There are two types of IRAs:
  • Traditional IRA:
    • Contribute pre- or post-tax dollars
    • Funds grow tax-deferred
    • Withdrawals are taxed
  • Roth IRA:
    • Contribute after-tax dollars
    • Funds grow tax-free
    • You can make tax-free withdrawals after age 59½
While both options are great investing strategies for people in their 30s, a traditional IRA might be best suited for shorter-term investing, while a Roth IRA might be better for the longer term.

Read more about How to Start Saving for Retirement. 
  1. Seek Diversification.
There’s one investing strategy that everyone should remember, no matter their age: Diversify your assets to minimize risk and maximize rewards. Consider purchasing a mix of stocks, bonds, and CDs to grow your investment portfolio. Learn how to capitalize on CD's with CD Laddering. 

Stocks represent ownership of companies, and their value can fluctuate drastically with the market over time. Bonds, on the other hand, stay relatively steady, but typically yield less return. Make it a goal to have a variety of assets so you can offset losses in the long run.
  1. Contribute to a Mutual Fund.
Consider contributing to a mutual fund. A mutual fund is a company that pools money from many investors and puts it in a wide variety of stocks, bonds and other securities (this helps you accomplish strategy #4, diversification). Investors have access to a diversified, professionally managed portfolio for a small fee. Mutual funds provide competitive yields with relative safety, and are one of the best investment strategies for 30-somethings who want to save for a large expense other than retirement.
  1. Don’t Lose Sight Of Your Investment Goals.
Regardless of how you start investing, keep in mind why you’re investing. Remember, while investing is the easiest way to save for retirement, it’s also a great way to build extra cash for any kind of large expense. Maybe you want to plan an international vacation for your 40th birthday. Perhaps you want to start saving for your kids’ college funds, or for a new car.
Or maybe you want to build your dream home one day. These are all perfect reasons to start investing in your 30s — and they help you stay focused and keep your eyes on the prize.
First National Bank and Trust can support your investment goals at every age. For more information about investment strategies in your 30s, contact one of our financial advisors. They’ll be a great resource as you start your portfolio. Find a branch near you, or contact us to explore more investment strategies for 30 somethings.
Investments are:
• Not FDIC/NCUSIF insured
• May lose value
• Not financial institution guaranteed
• Not a deposit
• Not insured by any federal government agency