Are your 20s the best age to start investing?
I believe in multiplication, whether it be multiplying my time, my travels and even my wardrobe. My problem is however I’ve recently multiplied my donut intake, but that’s a story for another day.
One of the most important decisions you’ll ever make is how, when and where to multiply your finances – and one of the ways to start is investing it. This revelatory decision usually hits you when you’re in your 30 somethings because the kids have probably rolled around and now a big home, multiple insurance policies, school fees and child care extras are top priorities. Needless to say these things need money that in some cases yours and your partner’s paycheck cannot cover without a bit of a pinch – this is the age most people start thinking about investing. However many young people are wising up to this reality and are starting early by sitting down and setting goals with a financial planner.
According to Bob Korver, owner of Mortgage Choice there has been an increase in young investors across Australia. Some of the ways young people are investing are:
- Real Estate – Many with similar interests and financial goals are partnering up to co-borrow and are purchasing properties in areas with long term rental history. Most recently young buyers are looking outside inner cities for cheaper properties and greater value.
- ‘Widow’ Stocks – Characterized by their relatively high degree of safety and low level dividend income, young people are entering into such long-term stocks. According to Business Insider and their Savings Calculator starting at 25 putting away $100 a week at a 6% interest rate will give you $1,000,000 by the age of 65. Most do it through mutual funds, but some others have taken ownership of their portfolios with the help of wealth managers.
Building wealth and multiplying your finances no longer has a minimum age requirement, in this new age economy young people are increasingly looking to secure their financial future. Here are just some ways to get started:
- Start Saving – You need money whether it be for a home loan or initial capital for your stock/share portfolio. Putting $100 a week away in a savings account from the age 20 to 25 will give you a $25,000 deposit for your first investment property.
- Do your research – Markets are always changing and you want to study the trends and best industry practices to gain the necessary know-how to be successful.
- Start Small – Rome wasn’t built in a day nor will your million dollar status come overnight. This will minimize your risk and help build your patience – most investments are long term and require staying power for the big payoff.
It’s never too early to think about your financial position, looking towards financial advisors and wealth management agencies will go a long way to your investment success.