If you’ve never invested before, getting started can seem overwhelming. After all, there are so many different types of investments and rules to learn, and we constantly hear stories about people losing all of their money in get-rich-quick schemes right?
For many people, it can seem easier to put off investing until they have a more stable financial situation. However twenty-somethings are in the best possible position for entering the world of investing, even if they have low salaries and college debt. Even if you said goodbye to your twenties years ago, everyone can benefit from compounding interest.
Albert Einstein referred to this magic as the “eighth wonder of the world.” The longer your money has to grow, the more wealth it’s able to generate.
Another great reason to get started with investing now? Your age directly influences the amount of risk you can withstand. When you have years of earning ahead of you, you can engage in riskier investment activities. You can also have fun with investing, and try out different types, like .
If you get started in day trading, you may become so good that you end up quitting your day job and taking it full-time. If you start investing now, You’ll have years to learn all about , and words like and will roll off your tongue.
If you grew up with the internet, you’ve got an advantage over older investors. You’re tech savvy, and can easily use online trading platforms, which have countless opportunities for technical and fundamental skills and analysis. You’ll also find many chat rooms and education and financial sites. Social media, apps, and websites can all contribute to your confidence, expertise, knowledge base, and experience.
Another reason why you should get started with investing? It builds healthy financial habits. Bad financial habits in your 20s, like living paycheck to paycheck and never saving for a rainy day can come back and bite you when you’re still failing to take control of your finances in your 30s and 40s.
So how do you get started? First, you want to pay off any high interest debt like credit cards. Commit to a debt elimination plan which will allow you to pay down your debt so you can create and stick to a realistic budget.
Next, figure out how much you can afford to invest. If you’re young, don’t worry about contributing a huge amount, just make sure that you’re contributing regularly and learning as much as you can about different types of investments.
Regardless of your age, educating yourself about investing is an excellent way to take control of your finances. You may even find that you have a passion for day trading or you want to go back to school and take it all the way.