Financial Products That Young Adults Need to Learn About

If you’ve ever talked to anyone from a previous generation about finances, you’ve probably heard all about working 9 to 5 for a couple years before they bought a house and started a family. Ever noticed that there’s a huge disconnect between that and what you have to deal with? Young adults today have quite the uphill battle to attain financial security, so being aware of financial products like these can make a big difference!

Mutual Funds and ETFs

Do you know what a mutual fund is? How about an EFT? If not, learning in detail what they are is the first thing you should do. Mutual funds are professionally managed investment funds. According to Bankrate, money from investors is used to invest in stocks, bonds, and more. EFT stands for exchange traded fund. Like mutual funds, EFTs can be made up of multiple types of investments. They are traded the same way stocks are, as purchasing them comes with some inherent risk. These financial products can help you build a reserve of wealth over time, however, so learn about them now!

Insurance

Insurance is often seen as something of a necessary evil. It’s one of those things that no one wants to pay for, but if you end up needing it, you’ll be very glad you have it. Everyone’s familiar with policies like health, home, and auto insurance, but those are far from the only ones. Did you know there are even a few different types of life insurance? Term life insurance covers you for a predetermined period of time, whereas whole life insurance covers you for, well, your whole life. According to Compass Insurance Group, term life coverage is much more affordable when you’re young. It doesn’t do anything for anyone if it expires before you die, though.

Retirement Accounts

Insurance can help protect you from significant financial loss, but it’s not going to make you any money. According to Principal, setting money aside in retirement accounts like a 401(k) or IRA can help your money grow so that you have a tidy sum set aside by the time you retire. Obviously, the sooner you start investing in your retirement account, the more likely you are to end up with more money by the end. Just make sure you look into which type of retirement accounts are best for you.

Financial products can make a huge difference for the better in your long-term personal financial situation, but only if you know how to properly take advantage of them. Mutual funds and EFTs, insurance, and retirement accounts are just some of the products worth being familiar with. Just remember that everyone’s situation is different, and make your moves accordingly!

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