A 20’s age is a very crucial decade for young peoples. Generally, in the 20’s age, young people want to live freely, enjoying the greatest freedom of life. Just graduated from college not have home loans, college fees, spouse to please and kids to care. It is always better to invest money in your 20’s because
“Early Investment = Early Retirement”.
Invest money in your 20’s helps your money to grow exponentially. It means if you invest money in your 20’s you end up with many folds the amount you saved. Compound interest helps your money to grow like a snowball.
Here are some tips to help you to invest money in your 20’s:
# Learning and Investing in the Stock Market
Generally, in 20’s age young people do not indulge in their financial management. They do not track their spending. They just wanted to be free and spend mostly on their lifestyle and entertainment. Mostly, they spend on expensive mobile phones, laptops, music systems, bikes, etc. They don’t need these things at that time.
But to retire early or accumulate enough wealth invest money in your 20’s is compulsory. Even more, young people should invest their time in learning and investing in the stock market. This is the best time to build a strong base.
In the long run, the stock market always outperforms from all other types of investments.
If you are in your 20’s or your 30’s, if you think you would retire at the age of 60, you would have almost 30-40 years in hand to save and invest in the stock market.
In below table you will understand why to invest money in your 20s age is necessary:
The above table clearly shows investing in 20’s gives almost 40 years to retirement with a corpus of around almost ₹ 3 crores. If compare that with amount accumulated in 30 years which just giving ₹ 56 Lacs only.
# Help Compound Interest to Play with Your Money
Every young person wanted to enjoy their current life and future life as well. At this age, most young people do not believe in their retirement. But actually, young people don’t know they even retire at the age of 30 itself. This happens just because young people are not financially educated.
For the reason that, young people need to understand wherever you invest money in your 20’s that will be your assets in your golden period. Compound interest is to playing its game to give you an unexpected winning trophy in your golden age.
For better understanding, if you invest money in your 20’s, with just ₹ 20/- per day. That means ₹ 600/- per month or ₹ 7,200/- per year continues to the next 45 years. At the end of your 65 years, you have ₹ 3 million in your pocket at just an 8% interest rate. Now, if you started at the age of 30 & save the same amount of ₹ 7200/- per year at an 8% interest rate you will have only ₹ 1 million in your pocket only. Those 10 years you missed on a cost more than ₹ 2 million in return. Even though you missed only ₹ 72,000/- & 10 years of savings.
# Invest Money in Growing Yourself
Whatever happening in your family, friend, neighbour, in your school, college, there is always one area you can find total command. In your 20’s age, the best investment is always investing in yourself. Read books as many as you can that help you to grow your mind, your skillset, your ethics or knowledge. Henry David Thoreau once said,
“You cannot dream yourself into a character, you must hammer & forge yourself one”.
Once you start investing in yourself, you simply going to change yourself and making yourself ahead of others in a rush. Invest money in your 20’s in purchasing books that best age for learning.
Whatever you want to learn with your interest that will pay you in the later part of your life. Bring in your certifications, your degree’s that advances your career or start over any job in an industry that always helps you to grow.
# Ignore Joneses
In today’s world, social media like Instagram, Facebook, Twitter, Snapchat, and Whatsapp & Pinterest is very much indulged in people’s lifestyle. Young people generally get distracted because social media is full of pictures and stories of your friends or strangers.
The fear of missing & losing out keep up the young people’s to try and keep going. This leads the people to spend the amount they don’t have, taking loans & creating debt to fulfill their unnecessary needs.
Even more, people generally don’t know what their friends already created their assets. Actually, these assets are giving him money for foreign trips. And he is putting pictures on social media as well.
If we look at another scenario, it may be that their friend is gone to foreign trips financed by a credit card which keeps him in debt. Unfortunately, friends might look like they have all but actually, they are in debt and not enough money to start an investment, in both the senses you are distracted with Joneses.
The Bottom Lines
Saving and Investment look boring at this stage. So, it is better to stabilize your mind and tune out of distraction. Always, focus on your goals so that you can find money to start investing in your future. It’s better to start early and the chances of getting retired early are also very high.
So, start investing with a small amount from your salaries and with time you can gradually increase your investments. By the time you reach 30’s or 40’s age, you would have enough amount that you will not need any credit cards to fulfill your necessities or dreams.