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What could happen? IRA, 401(k)? No. In an interview with Us Weekly, Barbara Corcoran said traveling is the best investment to make before you turn 30.
Read more: Suze Orman: Parents, get your kids a Roth IRA so they can retire millionaires
Find out: One smart way to grow your retirement savings in 2024
If you’re wondering why, here’s what a financial advisor and planner says about travel, why she thinks it’s one of the most important things to invest in while you’re young, and how this advice works now. I’ll let you know if it’s effective or not.
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Travel is the best money you spend
According to Corcoran, people should invest in at least one good trip before they turn 30. It doesn’t necessarily have to be a trip abroad. It could be a weekend trip to a place you’ve always wanted to go. But no matter your destination, you shouldn’t be afraid to spend money.
“Think about where you want to go the most and spend a lot of money on it…The only thing the world can’t take away from you is the wonder of where you’ve been and how much you were laughed at while you were there. “It’s a long way from my front door,” Corcoran said.
Corcoran pointed out that unlike material things, travel is also one of the things that can be preserved forever, or at least the memories made from travel. And that experience itself can make a difference in who you are and who you become.
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Traveling is a great investment – if you can afford it.
Corcoran’s advice to choose travel as your best investment while you’re young has merit. However, not everyone can afford it.
“For many of us, traveling provides a great return on investment in memories. Traveling when you’re young shapes your view of the world and helps you understand what’s really important to you.” ,” says Jay Zygmont, CFP®, founder of ChildFree Wealth®. “The challenge is when you’re young you’re less likely to have extra money to travel.”
Not only that, but Zsigmont’s advice is to focus on paying off your debt before spending money on travel. Once that’s done, you may want to start saving.
“If you have debt, you need to focus on paying it off before you travel,” he says. “You don’t want to take out new debt to travel.”
So what should you do if you can’t save enough money to travel without debt? There may be ways to still afford it.
“The best bet is to have someone else pay for your travel expenses,” Zsigmont said. “Look for work or volunteer opportunities that involve planned travel. Many companies allow you to spend extra time on sightseeing trips if you cover the cost of hotel and meals. In just a few years, My wife and I have been able to take advantage of work opportunities to continue traveling to China, France, and Spain.”
Travel could be the path to ‘true’ wealth
Young adulthood is also a time to discover what it means to build “real” wealth, and that may be discovered through travel.
“My true belief is that traveling allows us to understand different cultures and ultimately leads to understanding who we really are. Once you know you’re human, you can adjust and build your ‘true wealth’,” said Stoy Hall, CFP, CEO and Founder of Black Mammoth.
“Our industry is getting ‘investing’ completely wrong,” Hall continued. “We focus on ROI and stock market movements. We need to focus on the experience and balance investing in ourselves mentally and physically. Mentally, When you are in good physical and financial health, your wealth truly increases.”
Hall recommends starting with small, local trips and gradually progressing to larger and more expensive trips. Unlike Corcoran, who advised splurging on travel, he also suggested setting a realistic travel budget and adding to it each month just like you would add to a regular savings or investment account.
Traveling can be a big expense rather than a wise investment
For some people, traveling can be a good investment in themselves, life experiences, and personal growth. But for others, especially those looking to start a family, it may be a better expense.
“I would definitely call travel more of a good expense than an investment,” says Chris Urban, CFP®, RICP®, founder of Discovery Wealth Planning. “If you’re thinking of settling down and starting a family, I highly recommend traveling as much as possible before this stage of your life begins.”
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This article originally appeared on GOBankingRates.com: Barbara Corcoran recommends making this investment before you’re 30 — is she right?
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