Young Investors


You’re now in your 30’s and enjoying life. Business is steady but debt is still a problem. Between credit card and loan payments, even as a young professional, you’re living from month to month. So, you probably think that financial planning and investments should be left for later on in life — but that is not so. The sooner you begin to develop savings and investment habits, the better off you’ll be. Property investment is a valuable financial growth option that was once reserved for established individuals who had already built diverse portfolios. A changing real estate market and the development of innovative investment techniques has allowed young people to become investment property owners. Here are some valuable tips that you can use when you’re considering an investment property purchase.

Asian business man working on a laptop

Time is on your side

The fact is, as you get older you have less free time because you will probably have more obligations like children, a career, loans and other expenses. Unless you plan on waiting until you are retired to start investing, you are never going to have “more time”. Don’t use “I’m too busy” as an excuse not to invest. You can’t afford to wait. You’ve heard about compounding interest. It means that a dollar invested in your 30’s generates more income than a dollar invested in your 50’s. Assuming you re-invest the income in each case, the dollar from your 20s has 30 extra years of income-generating power. That’s one way of saying that when you’re young, time is on your side. You’ll have time to decide if the demands of income property fit your personality and skills. If not, you’ll be able to move to other things at less of a cost than if you were older.

You can earn more income

Once you’ve bought property and found tenants, you’ll soon get a steady stream of rental payments. If you selected your property well, payments from rent should cover the property’s insurance, maintenance and mortgage (principal and interest) while leaving extra funds for reinvestment. Don’t spend this money frivolously; you’ll need it for upgrades to your existing properties and investment into new ones. Many young people are discovering that the key to being a successful landlord is also being a tenant at the same time. You might not have the money to purchase both a personal property and an investment property. Investment properties yield income in the present while also allowing you to secure a substantial asset for the future, so it’s worth considering buying only an investment property. Remember that you’re not necessarily going to be a tenant forever. You’re young, and your financial resources are probably limited. Investing in real estate now could even be your ticket to saving for a deposit on your first personal property purchase in the future.

Consider a shared investment

Are your family members interested in becoming property investors? You should consider asking them if they’d like to make a joint purchase. This is especially beneficial when both parties are unable to invest alone. You can pool your resources to become investment property owners without taking on more debt than you can handle. Many investors also find they are able to qualify for lower interest payments on a mortgage when using this technique. A contract should be written up to outline the rights and responsibilities of each party in regards to the investment. You can determine the terms that you’d like to establish before you ask about joint investments to make sure that you’re not compromising conditions that are necessary to make you comfortable in regards to the arrangement.

You will learn to save

Once you decide to invest in property, your lifestyle immediately changes. You will need to start putting money aside to make the first investment. After that, your planning expands beyond day-to-day living by necessity. You will learn to manage your cash flow to have funds available for lump-sum payments such as insurance. It’s good training for life and business.

Start early to reap the rewards

Investing, by nature, involves risk. However, a smart investor knows how to invest with careful criteria and sound judgment, minimising risk and maximising financial gain. This, again, is true at any age. No one wants to lose when it comes to investing. But consider this, who is at the greater disadvantage when it comes to risk? Someone who wants to retire in five years or in twenty years? Clearly, the younger you start, the more time you have to make mistakes, recover and reap the rewards.

At AIA we can help you to find an investment approach that fits your financial goal and risk appetite by combining innovative products with expert advice. AIA understands that each of you have unique financial goals, therefore AIA has designed a line of investment linked plans that offer you smart solutions to satisfy your portfolio needs by delivering consistent performance. Investment linked plans offer you the opportunity to participate in investment opportunities while ensuring you have financial protection through life insurance. You can benefit from investment opportunities in developed and emerging markets, and in different ranges of risk/return profiles.

This article was published in the September 2015 issue of Inspire Living Magazine. Download it here!

This advice for young investors is made possible with support from