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How to invest your money if you are still 20 years old

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In general, boys between 20 and 30 have a low propensity to invest. It is widely believed that investment, even in an exclusively conservative sense, is an activity to be undertaken later on. Of course, the relative difficulty that, in this period of life, is felt when one tries to save money also has an impact.

Yet the issue of investment also concerns young people. Moreover, even those who do not work or who do not work permanently. Also because the occasional sources of income can be the most varied, from the gifts of relatives to seasonal jobs.

So, if you get the chance, start thinking strategically about how to invest your money even if you haven’t turned thirty.

In the following article we will offer advice on this, taking as reference an interesting article by Forbes that has received the opinion of distinguished investors.

Start early

We have already mentioned this concept. If you are already twenty, and you have the chance, it is not too early to invest. This truth shows the individual in his twenties that yes, there are opportunities for him too. However, it is also functional to another dynamic, which is merely technical, with mathematical evidence.

Quite simply, if you start investing early, you will find yourself with more capital once you play, you have to stop. Calculations are easy to make. On the other hand, capital generates capital (if one knows how to invest it), and this “accumulation” effect starts better than before.

Jude Wilson of Wilson Group Financial calls this phenomenon “compound interest”. “Compound interest is the greatest force in the universe,” declares, perhaps exaggerating a little, Jude Wilson.

Develop a 360-degree financial plan

It is unwise to undertake an investment path as if it were disconnected from everything else. In reality, investment activity should only be a part of a more elaborate and extensive economic plan. This, in most cases, should cover many aspects of life, including everyday life.

For example, a prudent investment activity must be accompanied by a savings plan, understood not as a financial product but as a set of actions, activities and habits that allow the individual to set up the provision of money, acting on the domestic economy, on current expenses etc.

Also because investing “in debt”, especially if you are only twenty years old and therefore the safety net is absent or too weak, is really a bad choice.

Don’t misunderstand the true meaning of money

Most small investors fail in their intent, or even lose capital, because they have a bad relationship with money. Having a bad relationship with money often means misunderstanding its true meaning. The most common mistake is to think of money as the tool to achieve happiness, to solve one’s problems.

Well, it’s a wrong thought. If this perception is maintained, a vicious circle is generated that mixes anxiety and greed (a deadly cocktail). It is easy, in this perspective, to expose oneself to risks or to treat money with little lucidity.

So what is money? What perception of it should mature? Money is simply a catalyst, a tool to free up time. If you look at it this way, giving it the importance it deserves but without exaggerating, the chances of making mistakes decrease.

Invest and save progressively

Most young people give up investing at the start or not even thinking about it for a simple and banal reason: they manage to save a little money. On the other hand, it is not uncommon to run into part-time contracts or, worse still, underpaid, when you begin your career.

Well, as far as possible and maintaining a good standard of living, this is not a good reason to give up investing. You can also start with 100 dollars a month. The important thing is to start a journey, being aware that, perhaps with an updating of one’s spending habits and professional growth, those 100 dollars could become 200, 400, even 1000 within a few years.

Obviously, the discourse of “progression” is valid only for those who manage to make a career, or reasonably think they can do it. Unfortunately, these days is not at all obvious.

Don’t be fooled by social media

This is an important point, even if at first glance it does not seem to be closely interested in the world of investment. The problem does not lie in the recreational use of social networks, which from this point of view can give so much, but in a side effect that everyone at least once experiences on their own skin. That is the feeling that the life of others is better than ours, followed by a sense of emulation that originates in the natural need not to feel excluded or to suffer undue declines in self-esteem.

Now, this sense of emulation can lead to a negative change in one’s spending habits, or to waste money on a psychological rather than a material issue. This, in hindsight, affects the investment capacity. On the contrary, if the expenditure increases and the savings decrease, it can also lead to a renunciation of any investment purpose.

Therefore, the advice is to take the social media for what they are: a showcase. Very often people are happier and richer than they are. And even if what you see on social media corresponds to reality, this would not be a good reason to spend and spread, and give up your own investment path.

Automate your investments as soon as possible

Once the investment path is in place, and you feel comfortable saving money regularly each month, you could already start automating your investments. The necessary and insufficient condition for you to take this important step is to have clear ideas about how much, where and how to invest. Once you’ve established this, you can approach asset management tools, obviously at the lowest level at the beginning (hoping for a low entry level).

In this way, you can free up the time you spent before planning your investments. Moreover, this is the only way to start, without bumps, to create some automatic income.

Invest in yourself first

This point is not about money. Or, to put it better, it concerns him indirectly and in the long run.

As much as you can tell yourself about the most profitable investment products, you will not be able to say “complete” until you grasp the importance of the only investment that, after all, really counts: the one about yourself, about your knowledge, about own training.

Of course, the “return” will only develop over time, and you could wait years before seeing concrete results. However, this is a safe and certainly profitable investment that will bear fruit. So, even if you are investing not exactly small amounts and you can tell yourself almost satisfied with how things are going, don’t forget to study, train yourself, and update yourself regularly.

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