Many people in their 20s are either saddled with high debt or are stuck in a menial low paying job with little opportunity for wage increases despite their best efforts. For 20 year olds with the high debt and the menial low paying job, making a financially secure future seem like an impossible dream. However, there are steps you can take in your 20s to plan for a better financial future down the road. Keep these ideas in mind as you navigate through young adulthood.

Health

Virgil once said, “The greatest wealth, is health.” Keep a healthy lifestyle. Eat well and exercise daily. Health Insurance is now mandatory for all adults under the Affordable Care Act. Many plans offer free gym membership or subsidized sessions. If your plan does not have a wellness program look for exercise classes in local community centers, like the YMCA or neighborhood Yoga clubs, which offer free or inexpensive classes. If you don’t have health insurance in 2015, you may have to pay a penalty when you file your 2016 federal taxes. Contact an insurance broker pronto for insurance quotes online, and to review the requirements for your state.

Crowdfunding

Crowdfunding is the process of raising money to support an idea or business venture from multiple donors for a profit. The top three crowdfunding sites are Gofundme, Kickstarter, and Indiegogo. You review a campaign or business venture and decide to invest in the idea or business. If the entrepreneur fails to obtain their funding goal, many your money may be returned, so your investment is safe and secure.
Old School Retirement Investments

401k

Listen to the parental units or Suze Orman, employer funded retirement plans, such as a 401k, allow you to save pre-tax dollars. Many companies match your contribution up to 100%. If you leave your company, you are able to roll your retirement funds over to your next company’s 401k plan. In the event you lose your job, you can also roll over your 401k plan into your own plan at a brokerage firm like Fidelity or Charles Schwab. An added benefit is that parents will be ecstatic to see their child listening to them and saving for the future.

Preferred Stocks and Bond

Another option is purchasing preferred stocks on the stock market or bonds. When purchasing stocks, make sure you choose stable large companies with stocks or bonds that are easy to sell without a broker charging fees to sell them.

Renter’s Insurance

Natural disasters, forest fires, floods, hurricanes, and tornados can strike at any time. Housing is the single largest expense in anyone’s monthly budget, especially those under the age of thirty. Many of you will need to double or triple up on roommates when moving out of your parents’ home and into your own rental for the first time. Well, this is true if you want a nice place to live. Renting for the first time can come with many surprises, including the surprise that renters should consider different types of insurance.

Many landlords require renters to carry insurance as a condition of their lease. If you do not have renter’s insurance contact a renter’s insurance broker for a quote on cheap renters’ insurance – it’s really inexpensive and provides protection for your valuables. For many young people, besides a car, electronic equipment is the most expense thing they own. Laptops, tablets, and phones can be expensive to replace, but luckily many phone carriers provide insurance as part of their coverage. However, for extra security, look at your rental insurance policy and see if your electronic items are covered. If so, you may be able to drop the excess coverage on your phone plan.

Microfinance Organizations

If crowdfunding is not your thing, consider microfinance organizations. In these schemes you lend money to an entrepreneur in an emerging market to build or expand a business. When your loan is repaid you can elect to cash out or reinvest it in another business.

Vice Hobbies

In moderation, there is tremendous value in investing in vices, like tobacco, wine, and whiskey. Rare and hard to find wines and spirits are sold on Wine Stock Exchanges. As years go by excellent wine vintages and spirits increase in value and scarcity, drawing buyers from all over the world to buy these wines. The same thing happens with whiskey. The buyer’s market is no longer limited to your neighborhood – you have the potential for an international clientele when selling wine and other liquors.

Similarly, cigars become collectible after a period of time because they are said to become a ‘better smoke,’ and may become more difficult to find. If you like to drink wine, invest in three fine bottles and hold on to them to sell at a later date. There is huge potential for a lucrative profit, years down the road. Wine is usually sold in lots of threes, but cigars are sold individually or in boxes. Invest in boxes of cigars and a good humidor to protect your investment.

 

By: Vincent Stokes