Investing in your 30s - the young professional

Published by Rob Griffin on 07 June 2011.
Last updated on 25 April 2012

man driving car

If you want to ensure you can meet your shorter-term financial goals and enjoy a decent standard of living in later life, it's crucial to put the right financial foundations in place now. So how much do you need to stash away each month and where should you invest it?

In the first of a three-part series, we take a look at the options for people in their thirties. Each of our case studies is relatively new to investing, but although they have different priorities, all share relatively long investment time horizons - due to their age.

Case study: Jon, a single professional in his early thirties

Life has been pretty easy for Jon Roberts. He has managed to avoid any permanent financial responsibilities, so apart from paying his rent and a few bills, the rest of his £50,000 salary is his to spend how he sees fit.

He's taken full advantage of that financial freedom, buying a shiny BMW and making regular trips to the ski slopes of Austria.

But now he's hit his early 30s, Jon's turning his attention to the future. Although not yet on the housing ladder, he has ambitions to buy his own property within the next few years and wants to get his finances organised.

A risk-taker by nature, he's happy to take a more gung-ho approach to his investments, with exposure to some of the racier areas of the world in the hope that these will deliver him better returns over the next three decades.

Jon's objectives

Jon needs to save into cash to meet his short-term savings needs. He should start with a 'rainy day' cash ISA, holding this year's allowance of £5,640, for which he can currently get up to 5%.

Read our round up of the best cash ISA rates

To build up the deposit required to get into the housing market, he should also maximise the use of one-year regular savings plans offered by banks and building societies, as they invariably provide a better interest rate than standard savings accounts.

For investments, Jon needs to focus on generating longer-term gains, so he should mainly use growth funds.


He should also start to build a suitable pension pot; given his age, contributions of up to 15% of his salary (as a guideline, the percentage should be around half his age) will probably be required.


With the best part of 35 years before retirement, no pressing financial commitments and an enthusiasm for risk-taking, Jon can afford to take more of a chance with his longer-term investments, so the rapidly growing emerging market economies make sense.

However, these could also prove a bit of a rocky ride as such countries tend to be economically and politically more volatile than 'mature' economies like Europe or the US.

Gartmore Emerging Market Opportunities fund

Our expert, Mel Kenny says: "This fund has a range of exposures across emerging countries with strong future growth stories, while the fund manager has a long track record in emerging markets, especially Latin America. It also has an OBSR AA rating - an indication of superior quality, based on process and track record."

Aberdeen Emerging Market fund

"While it's high-risk, this fund adopts a relatively conservative investment approach, with returns generated from holdings that offer long-term good value," says Kenny. "It's a consistent top-quartile performer, with exposure to a range of emerging continents."

AXA Framlington UK Opportunities fund

Kenny says: "Axa's fund invests in companies of all sizes across a good spread of UK businesses, rather than focusing on particular sectors. It's an excellent performer, consistently achieving top-quartile performance over one, three, five and seven years."

Our fund advice comes from financial adviser Mel Kenny, director and chartered financial planner at Radcliffe & Newlands.

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