What is the Best Investment Strategy for 35 Year-Old?

We all want to live a great life when we retire. When you are in your mid-30s, there is a likelihood that you are a parent, have a job, or are an entrepreneur. It is not too late to start investing. This is the best time for you to maximize the amount of money that you bring home, save, and also invest. This article looks at investment strategies for 35-year-old.

Tips to Create an Investment Portfolio at 35

To create an investment portfolio at 35, you should follow these steps:

  • Understand your risk tolerance and financial goals: How much risk are you comfortable with? How much money do you need to save for retirement? Once you understand your risk tolerance and financial goals, you can start to choose investment options that are right for you.
  • Choose your investment options: There are many different investment options available, so it is important to do your research and choose options that align with your risk tolerance and financial goals. Some common investment options include stocks, bonds, mutual funds, ETFs, and real estate.
  • Diversify your portfolio: Diversifying your portfolio means investing in a variety of different asset classes to reduce your risk. For example, you could invest in a mix of stocks, bonds, and real estate.
  • Rebalance your portfolio regularly: As your portfolio grows and changes, it is important to rebalance it to ensure that it still aligns with your risk tolerance and financial goals. Rebalancing may involve selling some of your investments and buying others.

Investment Options for 35-Year-Olds: Grow Your Wealth for the Future

At 35 years old, you have a long time horizon ahead of you, which means you can afford to take on more risk with your investments. This is because you have time to recover from any market downturns. Here are some investment options to consider for 35-year-olds:

Invest in the Stock Market for Long-Term Growth

The best place to start investing at 35 is in the stock market. In more than 100 years, investing in stocks has returned more than 10,000%. In fact, most of all people in the Forbes list of the wealthiest people made their fortune in the stock market. Warren Buffett and George Soros have made a fortune by investing solely in the stock market. The same is true with company founders like Bill Gates and Mark Zuckerberg. Most of these people started investing in their early 30s or in their late 20s. To be successful in this, you need to do a few things.

  • Learn about the stock market: There are many books, but we recommend “The Intelligent Investor” by Benjamin Graham, which also features Warren Buffett as a contributor. Another recommendation is “One Up on Wall Street” by Peter Lynch.
  • Start small: Today, with companies like RobinHood, you can start investing with as little as $200. Look up the best stock investment strategies.
  • Invest with a long-term view: In other words, don’t be a day trader but instead, invest in companies you can own for many years.
  • Get immersed in the stock market: This means that you should always be in the know about what is happening in the stock market.
  • Diversify across industries: Also, diversify across the various investment groups like growth, income, and value.

Diversify Your Investment Portfolio: We recommend that you do the following to create a diversified portfolio:

  • Invest in mutual funds: These are funds made up of a collection of many companies. Examples of mutual funds are those created by Vanguard and Blackrock. For example, Vanguard’s Total Stock Market fund has returned an average of 15% in the past five years.
  • Invest in ETFS: Exchange Traded Funds are similar to mutual funds. They are made up of many companies. For example, the VanEck Vectors gold miners ETF is made up of the biggest gold mining companies.
  • Invest in index funds: These are funds that track a particular group of stocks. For example, the S&P technologies index tracks the technology companies in the S&P 500.
  • Invest in Robo-investing platforms: These are relatively new companies that allocate your funds automatically across the various assets. Examples of these robo-advisors are Betterment and Wealthfront.

Invest in Peer to Peer Lending

A relatively new way of securing your future is to invest in peer to peer lending. This is a strategy in which you lend money to people on the internet using p2p lending platforms. The best peer to peer lending companies for investors are Prosper, Kiva, and Upstart. The average returns on some of these peer to peer lending platforms is about 9%. Therefore, if you decide to invest $10,000 in such companies when you are 35, you will be earning at least $900 every year. By the time you are 50 years, your original $10,000 investment will be more than $25,000.

A word of advice: this approach should mostly be used for diversifying only. It should not be your primary source of retirement money because the P2P industry is significantly new and risky. You could also use the cash flow from these investments to reinvest in stocks or real estate.

Invest in Real Estate

When you are 35-years old, your goal is to have a better life for you and your family. It is also your goal to be thinking about retirement. In this, one of the best places you can invest your money is in real estate. The beauty of this is that when you have your own apartment or townhouse that you are leasing out, you are assured of having money at the end of every month. The challenge for investing in real estate is that it requires a lot of money. To do this, we recommend the following:

  • Use the online real estate platforms: They give you an opportunity to invest in real estate from as little as $1000.
  • Start small: You don’t need to start by building an entire apartment block. Instead, you can start by building a small house and selling it. You can also buy an old building and flip it.
  • Combine with friends: You don’t have to go it alone because you can partner with your close friends and invest in real estate. Remember, it is always better to own 10% of a small thing than 100% of nothing.

Maximize Your 401(k) Contributions

Another way to grow your wealth is by maxing out your 401(k). In 2023, the maximum 401(k) contribution limit for employees under the age of 50 is $20,500. For employees age 50 or older, the catch-up contribution limit is an additional $6,500, for a total of $27,000. All this does not include your employer’s match.

For example, if you are a typical 35-year-old making $85k a year, and you contribute the maximum allowed $20,500 in your 401(k), you will pay a tax on the remaining $64,500. Therefore, if you are in the 24% tax bracket, you will save $5,160 right away. This is the 24% of the $20,500.

If your 401(k) grows at a conservative rate of 6% every year, your investment will be worth more than $1.2 million when you are 78 years old.

Also read: 5 Key Investment Strategies for Beginners

Side Hustles

Last but not least, another best investment for a 35-year-old is to have multiple sources of income. Fortunately, you can achieve this without even trying. For example, as you drive to work, you can activate your Uber account, carry a client, and make $50. As you go back home, you can do the same. In a month, if you do this every Monday to Friday, you will have an additional $2000. In your home, if you have an extra room, and you can make money with AirBnB. If you make $50 a night, you can make more than $1000 a month. You can also write a book and sell it on Amazon. You can also start a niche website and make money from referrals.

Investing for Your Future at 35

As a 35-year-old, you have lived a long life. But, a longer life awaits you. In fact, you have at least 44 more years to live, based on the US expectancy rate. Therefore, it is important that you make quality and reasonable investing and saving decisions. While the methods explained in this article are the best investment strategy for a 35-year-old, there are others such as starting a business and creating online content like us.

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Crispus (BSc and MBA) is a finance professional with more than a decade experience as a financial analyst, writer, researcher, and trader. Crispus has written in-depth articles on leading platforms like CCN, Marketwatch, Investing Cube and Seeking Alpha. He also runs a forex education firm. Follow him on Twitter: @crispusnyaga and read more about us.