While all people share and are governed by a similar economic and investment climate, age groups experience different economic situations, risks and opportunities. Thus, the young and old may vary in terms of financial focus and investment opportunity. Money Magazine’s Peter Freeman gives the following investment pointers for those in their 20s, 30s, 40s, 50s and 60s.
1. The 20s. People from this age group are rookies to the workforce and have just started to generate income. Moreover, they have semi-permanent relationships. The financial focus at this age is to save up for a deposit on a home or to pursue an investment that appeals to one’s lifestyle. Prior to building wealth, they must either control or erase credit card debt. They may also consider investing in equity funds to build deposit.
2. The 30s. At this age, people have either settled down, have children, or bought a home. The main concern is how to secure renovations, reduce mortgage, and acquire or upgrade to a better property. Main threats to this age are downsizing and inflation, so taking out income insurance and saving up for emergencies are recommended. Those who are still single may pursue aggressive investments (geared share funds, portfolio or direct share investments) with extreme care.
3. The 40s: Financial stability during the 40s depends on how well you managed your money during the past decade. As the kids are grown up and education becomes more expensive, budgeting is of extreme importance at this age. High income folks may expand their investment portfolio.
4. The 50s: Establishing your own business is advantageous at this age. Children are married and enjoy financial independence, ergo, reduced expenses. Higher salaries are also enjoyed.
5. The 60s and later: The main focus at this age is how to maximize one’s savings in order to continue generating post retirement income. People usually build investments around allocating or complying pension in order to maximize tax and social security.
