Top 3 Advantages of Investing in Your Early 20's
For optimum benefits, financial investments should be started as early as possible. Many young people in their first career jobs start investing instead of waiting to work their way up the corporate ladder. Here are three advantages to investing in your early twenties. Aggressive mindset: Most if not all youth by nature tend to be risk takers. They are likelier than older people to embark on more daring adventures, including some in the financial realm. Although risky investments come with the possibility of sustaining significant losses, risk also presents the opportunity of enjoying substantial returns. With the help of a savvy financial adviser and measured aggression, youthful investors can often earn a fortune through their investments over a reasonable span of time. Less to lose: Young people who are just starting out in life are still adjusting to their independence. A surprising number live at home with their parents until their late twenties or early thirties. Many are delaying marriage and family longer than previous generations. Financial savings in these crucial areas result in greater discretionary income that can be invested in promising stocks or a
relatively safe mutual fund, along with bonds or other commodities. Even if a young investor loses his or her investment, it may not impact their overall lifestyle since their budgetary needs are often smaller until they get older. Compounding benefits: Long-term investments tend to do very well in the stock market. Even during lean times in an economic downturn, the market has always bounced back. For older people, the return to normal market conditions may be too gradual to enable their investments to return to the pre-downturn state. But younger investors have more time to wait for their initial investments to reach previously healthy levels. Even if the market is slow to rebound, youthful investors have time on their side to rebuild a stock portfolio without sustaining permanent losses. Over several yearsâ€™ time, an investment can compound earnings at the prevailing interest rate, resulting in a longer span of returns and more expansive compounding benefits that often leads to greater returns over several decades. Although investment at any age can be beneficial, starting out in your twenties provides maximum involvement in the U.S. stock market or abroad. Investing even small amounts may result in huge gains until those funds are needed to support retirement or meet another longrange financial goal. Invest a small amount from each paycheck, and you may soon see impressive results.
Mark Angelo co-founded the Investment Manager in August 2009 and two affiliated investment managers in 2000 and 2016.
Published on Mar 14, 2018
Published on Mar 14, 2018
For optimum benefits, financial investments should be started as early as possible. Many young people in their first career jobs start inves...