Most people who are in their twenties, whether they are individuals or couples often struggle to save money for a holiday. Let alone consider themselves to be financially stable enough to consider investment opportunities for the future. Investing in your twenties can be one of the most rewarding opportunities both personally and financially that you’ll ever experience. Sure there’s been a recession and the tail end of that is still sweeping through the world, but this generation can turn it around. One of the best ways to do that is to make shrewd investments early. Sure it is hard to save money, but now is the time to start thinking long term. Long term rewards usually mean short term sacrifice, but here are just some of the reasons why you might want to start putting cash away and start investing in your twenties!
There’s Plenty of Time to Recover
Let’s say you’re twenty and you invest $10,000 in a new business idea, or bonds. That’s a whole lot of money, but the potential returns by the time you’re 25 are huge! Now the worst case scenario is that you can lose $10,000 and once you hit 25 you have nothing to show for your investment. Sure, this is a hard financial hit, but you’ve got so much working life ahead of you that not only will you be able to make all that money back, you’d have learned some valuable investment lessons before anyone else your age. This can set you up for bigger, more considered investments in your 30’s and 40’s.
You Can Make Huge Profit Margins
Now when you get into your 40’s and 50’s, obviously your investments are going to be geared towards your retirement and so you might be looking at 5-15 year investment periods. In your twenties, you have a far greater investment period to consider. In fact if you invest when you’re twenty, you could make a 20-25 year investment. Obviously the amount of money you invest might be considerably less when you’re in your early twenties, but that’s counterbalanced by the investment period.
You’re Willing To Take Risks
Man, it’s a sad fact but as we get older, generally our risk taking behavior fades. So get in there early! If you need credit card advice or want a loan, make sure you go for it and don’t put it off. There are so many cool areas of investment to get involved, so make the most of that youthful enthusiasm and take risks! There was a great story recently about the Facebook graffiti artist who, in 2005, painted the walls in the Facebook offices and rather than taking payment, he took some share options. 7 years later, as Facebook was put on the stock market, he instantly became worth approximately $200 million. Would he have taken that risk if he was 20 years older? Who knows, but he is living proof that with risk comes reward!
The Online Advantage
This generation, the Facebook/Youtube generation has a huge advantage. With so many resources available online, tech savvy potential investors can do huge amounts of research based on the wealth of information available online. It takes just minutes to jump on Reuters and find out the latest business news. This generation can be potentially be quicker and more efficient and tracking down investment information regarding specific industries and thus being able to make well informed decisions on their investments.
The Element of Fun
It doesn’t matter what your age is, there’s always a buzz about investing. It’s about it feeling exclusive and knowing that your hard earned money is going to good use. When you’re in your twenties, this is exactly the kind of feeling you want. You want investing to be enjoyable and you don’t want to be worried about day to day finances. If more young people could see investment as a fun, enjoyable and learning experience then more people would invest. So get out there and be the leaders of a new generation.
Scott is a writer in his 20’s who would encourage his peers to start investing as early as possible and who typically spends his time researching and writing credit advice and information articles. Scott Cole @contentbomb