If you made it through your 20s without investing for retirement, don’t worry—it’s not too late to get started. Your 30s can be formative years for establishing yourself as an investor. By this time you should have a steady income stream, and if you start soon you can still reap the benefits of compounding growth. 

Prior to getting started, there are a few things you should think about. These tips also apply if you’ve already tried your hand at investing, but want to elevate your game in your 30s. 

1. Establish Your Risk Level

Every investor should have an idea of how much risk they are willing to take with their investments. This means knowing if you’re comfortable making riskier investments that possibly will provide a higher return, or if you should be conservative with your portfolio, only making safe investments that have a high probability of success.

Your 30s are a perfect time to establish this risk level, as you still have time to learn and may be more responsible than you were in your 20s. Either way, if you plan to continue investing, knowing your risk-tolerance now can keep you from making precarious investment decisions. 

2. Make Sure You Have a Retirement Investment Plan

There are many ways to invest, but the most common plans are typically ones that help you save for retirement. If you haven’t already, create a plan using one of the popular retirement accounts like a 401(k) or an IRA. These accounts are designed specifically for retirement and have special restrictions in place so you can’t easily touch the funds before your 60s.

Offered by your employer, a 401(k) is an investment account that allows you to contribute funds pre-tax, which reduces your taxable income. In many cases, employers offer a percentage match, which means they contribute as much to your retirement plan as you do (up to a certain limit) each month. This is essentially free money, so it’s smart to enroll in your employer’s 401(k)plan if you haven’t already done so.

An IRA or a Roth IRA are both versions of Individual Retirement Accounts. These accounts are similar to a 401(k), but instead of having your employer deduct the funds from your paycheck pre-tax, you contribute to an IRA on your own. Since you’re contributing funds that have already been taxed, any distributions you get from these accounts once you retire will not be taxed ( 401(k) distributions are taxed like regular income). 

Once your funds are in a 401(k) or an IRA, you can choose what type of securities you want to invest in. But often these accounts are used to buy long-term securities that grow modestly over time. Be aware the funds in these accounts are meant to be taken out after you reach the age of 59.5, and there’s a penalty fee (typically 10%) for early withdrawals.

3. Invest as Much as Much as You Can Afford

Contributing as much as you can afford in your 30s helps you build a solid foundation for growth as you get older. By investing more early on, you benefit from what’s called compound growth, which is when the returns on your investment are reinvested helping you scale your portfolio. 

The goal with most investments is to put your money in a place it can grow over time. The longer you hold an investment, the more opportunity it has to grow. Similarly, the more you invest in the beginning, the more growth potential you have. 

4. Educate Yourself on Investing

Investing is complex, and the best investors are most often the ones who know what they’re doing. If you aren’t confident about your knowledge of investment strategies or about choosing the best options, it may be a good idea to hire a financial advisor. As helpful as advisors are, they can be quite expensive, and the money you pay them cuts into your earnings as an investor. Of course, they’d argue, you’ll make more money over the years by following their advice.

You can easily invest on your own using an online brokerage account, but you must have a solid understanding of the markets and securities first or you can easily squander your money. Whether it’s simply knowing the difference between stocks, mutual funds and bonds, or learning how you can manipulate your buy and sell orders, it’s important to understand the markets and the terminology before attempting to invest on your own. 

5. Consider Other Investment Plans

Outside of saving for retirement, investing can be a great tool to achieve other goals. If you plan on having (or already have) children and want to begin saving for their college tuition, there are specific investment strategies that can help you achieve that goal.

Even if you just want to earn some extra money in the short-term, day trading or short- term investing can help you earn some quick returns on your money. Don’t do this, however, unless you have a thorough understanding of the market and overall financial conditions. 

The key to investing is to make informed decisions and work toward realistic goals.

Our Two Cents

Regardless of your risk level or investment strategy, the most important thing you can do is get started. Once you know what you’re doing, you can put your investments on auto-pilot, giving you the ability to focus on your job and other responsibilities. This doesn’t mean you shouldn’t pay close attention to your portfolio, it just means you don’t have to make it your main focus in order to profit from it. 

If you haven’t already started, take the time to learn about the different investment options, then start with something small and accessible like a 401(k) or an IRA. These will help you slowly begin to amass wealth, giving you a foundation to learn from and build on over time.