I’ve recently graduated from school and I’m eager to start growing my money tree. However, since I’m most likely moving to South Korea at the end of August and won’t be making a lot of money, it’s important that I make smart investing decisions.

My financial situation is unique compared with many others my age – especially among my friends. Most of them already are (or soon will be) in full-time, permanent jobs making a steady income. Seeing that they have far more financial freedom that I do, the paths we will and are taking vary greatly. However, even though we’re at dramatically different income stages, there is one thing that unites us all: we have no idea where and how to start investing.

Growing your money is like picking a school for your post-secondary education – it’s an important investment in your future that you need to devote time and research to. The first step is to educate yourself about all the possible money-growing paths available to you.

Here’s a list of some of the most popular avenues that can benefit twentysomethings, depending on your financial situation:

High-interest savings accounts:

• How does it work?

  Instead of leaving your money in a low-interest regular savings or chequing account, you can open a high-interest account and get a bigger bang for your buck. Depending on the bank, the going interest rate is between 1.2 per cent and 1.8 per cent. You can learn more about other types of bank accounts here.

• How twentysomethings can benefit:

  You can effectively grow your money in this type of account and it’s a safe, easy-to-access alternative to the risky investment routes. Since this type of account is often offered through online banks, it typically takes a couple days to transfer the money back to your regular account – a bonus if you’re trying to monitor your spending.

Savings Bonds

• How does it work?

  How they work: A low-risk way to save; when you buy one you’re loaning money to the government for a set period at a fixed-interest rate. The Canadian government offers Canada Savings Bonds and Canada Premium Bonds. Learn more about savings bonds.

• How twentysomethings can benefit:

  If you have extra money that you won’t need for a while and want it to grow without the risk, this route is for you. Savings bonds are 100 per cent backed by the Canadian government, so you’re guaranteed to get back the original amount you invested. The interest rate on your bonds can only go up – they can never go down.

Mutual funds

• How does it work?

  A mutual fund is a type of investment fund that includes a mix of investments, like stocks, bonds and other funds. When you buy a mutual fund, you’re pooling your money along with other investors, and your money is going toward shares or units of the fund. This type of investment can be risky – it all depends on the type of fund you invest in. Mutual funds also come with fees that affect your investment return.

• How twentysomethings can benefit:

  Mutual funds can be a good choice if you don’t have the skill, knowledge or time to manage your own investments, because a portfolio manager makes all the investment decisions.. Mutual funds also have built-in diversification and are an affordable way to own a variety of investments. Most importantly though, they’re easy to buy and sell – a bonus if you need quick access to your money.

Exchange-traded funds (ETFs)

• How does it work?

  Similar to a mutual fund, it’s an investment fund that is also a collection of investments, such as stocks, bonds and other funds. ETFs are also comparable to a stock since they’re traded throughout the day on a stock exchange. The downsides are that, depending on the type of ETF, it can be risky.

• How twentysomethings can benefit:

  According to Masters of Money blogger Rob Carrick, ETFs are ideal for “twentysomething go-getters with a job, a decent salary and an interest in getting started in investing right now.” He believes ETFs are great because they’re flexible, simplistic and have low maintenance costs. Carrick’s ETF portfolio blueprint for investing in ETFs can be found here.

These are just a few ways to invest your money, but for more ideas you can learn about guaranteed investment certificates, stocks, complex investments and bonds.

Once you’ve decided what to invest your money in, there’s another layer to add. Tax savings through registered plans like TFSAs or RRSPs.

Tax-Free Savings Accounts (TFSA)

• How does it work?

  TFSAs are available to Canadians age 18 and older. You can contribute up to $5,000 per year and even withdraw it and put the same amount back in later. The only downside is that you’re fined if you go over the yearly deposit limit.

• How twentysomethings can benefit:

  You get the benefits of a tax-sheltered account without permanently locking your funds into anything. Unlike registered retirement savings plans (RRSPs), savings bonds or other investment options, you can take the money out at any time and put it toward anything you want.

Registered Retirement Savings Plans (RRSP)

• How does it work?

  An RRSP is a registered account with the federal government that can be used to save for retirement. Anyone who files an income tax return and has earned income can open one, and you can deduct RRSPcontributions from your income tax every year.

• How twentysomethings can benefit:

  Although retirement may be more than 40 years away, if you start saving now – even $100 a month – because of the magic of compounding interest, you will have saved thousands of dollars more than if you start saving in your 30s. GetSmarterAboutMoney’s “How saving early in your RRSP helps: Amy and Amanda’s story” is a prime example of this.

You have a lot of investing options, but there’s another route to explore in deciding where to invest your savings: real estate. In an upcoming post, I’ll break down the benefits of renting versus buying a home.