Is it crypto? Or a specific stock? Or maybe real estate? While these could work long term with smart investments and lots of research, they all come with far more risk than the options below!
The first and easiest option is to simply put money into your company 401k! As long as your company offers a 401k plan, there also is commonly a matching policy as well. Be sure to understand yours! Many plans offer 100% matches up to a certain amount, immediately doubling your retirement savings, even if you don’t invest in anything (although I recommend you do!).
Other plans offer a variety of other matches, that may not be 100%, but it’s still guaranteed money! For example, my employer offers a 100% match up to 3% of our salaries, and then a 50% match up to 6% after the first 3%. This comes out to paying 4.5% of our salaries for free! To put it into actual numbers: if your salary is $60,000, and you put in 6% (or more) of your salary, your employer will provide an extra $2,700 towards your retirement! So even if you are nowhere near the $22,500 maximum contribution towards your 401k, be sure to at least meet the requirements for your employer match to avoid losing out on that extra cash!
The second option, albeit challenging and time consuming, is to go to some form of college. The most common college choice is getting a standard undergraduate degree. According to the Association of Public and Land-Grant Universities, the median income of recent bachelors degree graduates was nearly 60% higher than that of high school graduates between the ages of 22 and 27 ($52,000 vs $30,000). If you are focused on maximizing your financial return, I would highly recommend going into some sort of STEM major. For example: according to Forbes, the average projected starting salaries for engineering and computer science graduates was $73,922 and $75,900, respectively (more than double the high school graduate income from APLU!). However, for a humanities degree, this number drops all the way to $50,681. Of course, if you truly love something, it makes sense to pursue it, but make sure to understand the finances as well! Additionally, considering cheaper state schools can help save money as well, rather than private colleges.
But getting an undergraduate degree isn’t the only way to improve your finances through education! Trade school is also an amazing opportunity, and takes less time and money upfront generally! The top 10% of electricians make over $99,800 per year! (3) And there are even higher paying trade school educations, such as dental hygienist, electrical line worker, and many more! Be sure to look beyond just a Bachelor’s degree for further education if you are into maximizing your financial goals while finding a job you enjoy! (or at least can put up with)
And you can always try to learn something new everyday through reading books, doing your own research, reading a blog (hint hint :)), or any other way of gaining knowledge!
To summarize, while maxing out your 401k and gaining further education are far from the most exciting ways to invest money, both are proven to be able to potentially double your money!
Each method comes with some caveats (put simply):
401K
- Need to have an employer who offers a 401k
- Understand the match the employer offers
- Make the minimum contribution to receive the full possible match
Higher Education
- Understand the finances behind education (student loans, private vs public, trade vs undergraduate, etc.)
- Find a career you can survive in (mental health wise as well!) while also achieving your financial goals
https://www.forbes.com/advisor/student-loans/average-salary-college-graduates/