Young people should take advantage of time, and start investing now for the long-term. When doing so, they should consider these actions:
- Make use of low-cost mutual funds, exchange-traded funds and index funds to minimize administrative costs, transaction fees and commissions.
- Take advantage of tax-deferred retirement programs, which will allow them to invest pre-tax dollars to lower their current tax bill. Employers may match retirement fund contributions.
- Don’t avoid risk by emphasizing conservative investments. Taking on more aggressive investments creates greater potential for higher, long-term returns.
- Effectively manage risk with fixed index annuities, fixed annuities, and market linked CDs. Dollar-cost averaging allows for obtaining more shares at a lower cost during market downturns.
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- Have students talk to others for suggested investment actions to take.
- Have students conduct online research regarding the best investments for their life situation.
- What factors might a person consider when selecting investments for their life situation?
- Describe actions people might take to increase the funds they have available for long-term savings goals.