4 simple investment options for young professionals

Welcome to the real world: The land of utility bills, hour-long commutes and 40-hour grinds. 

If you're reading this, you've probably wondered how you can make more money. While you're not going to find any get-rich-quick tips here (such schemes rarely work anyway), you will find some suggestions on what you should do with your income after expenses. Here are a four simple financial choices that may benefit you in the long run. 

"Your employer may match a portion of your 401(k) contributions."

1. Take out a 401(k) plan 
If your employer offers a 401(k) plan, consider opening an account - especially if they offer matching. Not sure what a 401(k) plan is, much less how it works? A 401(k) plans is an employee-sponsored retirement savings account that allow you to invest a portion of your paycheck before taxes are taken out. 

We know - you probably want to get every cent you can from your paycheck, but think of the long term benefits. First of all, the amount you'll have to pay in taxes will be lower, because a portion of your paycheck will go into the 401(k). In addition, your employer may match a portion of the contributions you make to the account. That, in effect, is free money. So, if you contribute $100 for every paycheck you earn to the 401(k), your employer will contribute $6 (assuming a 6 percent match). 

Is a 401(k) just a glorified savings account? No. The money that goes into the account is invested into variety of mutual funds, such as stocks, bonds and money market investments. A third party, typically an investment advisory, handles the funds and generally offers you a choice of different ways to invest that money. 

2. Start a "rainy day" fund 
We know you've been hearing it since you were a teenager, but you're not invincible. You've probably realized this by now. Regardless, put money away into an emergency fund to cover anything for an unexpected ailment, a robbery or car crash. Think of it this way: according to Tavss Fletcher, a law firm specializing in personal injury, the average property damage crash costs $7,500. Even if you have insurance, you may still have to pay a sizeable deductible. 

Pay off high-interest credit cards and keep usage low. Pay off high-interest credit cards and keep usage low.

3. Pay off high-interest credit cards 
Fortune provided some good advice when it suggested young professionals start paying off their high-interest credit cards. You don't want a $500 balance hanging over your head when you have a 10% or 25% interest rate to deal with. At the same time, you don't want to avoid using your card completely, as its one of the many ways you can build up your credit score. Instead, restrict your credit card usage to gas, or other smaller expenses. In addition, see if you can find a card with a lower rate. 

4. Work with an advisor 
Depending on where you are in your career, the stock market could provide some opportunities to you. However, if you don't know what you're doing when it comes to buying stocks, seek a reliable investment advisor. Ask your parents or elders if they know anyone you can trust, and they'll point you in the right direction. 

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