5 reasons you should start investing in your twenties

Want to make the most out of life? Invest in your future self by investing in your twenties. Read more..

Young, wild, and free! Being in your twenties is fun! However, while you might be young and wild, grocery shopping and the expenses of life are certainly not free. It can be difficult to uphold your work responsibilities and also chase your dreams. A new house, a car, a birthday gift for your friend, a vacation to the Caribbean… It would be nice to let the waves crash on your feet underneath the glowing sun while you casually sip on a mocktail stress-free; knowing that you have done what you can to become financially secure and stable.  

Making this your reality is not unachievable. If you want to help your dreams take flight, let investing be your ticket. Investing in your twenties is one of the smartest decisions you can gift your older self with. With all the hard work you are putting in now, you owe it to yourself to secure your future financially however you can. With the always-evolving world of financial technology, creating your own investment portfolio is now easier than ever. 

Investing young comes with many major advantages. This blog explores 5 reasons why you should invest in your twenties.

5 reasons why you should invest in your twenties

1.    A big head start

The ultimate advantage: a head start. When you invest early, you give your investments decades to multiply. Additionally, long-term investments are typically less risky, require less maintenance, and are not influenced much by the daily rises or dips in share prices. Investing is a marathon and not a sprint. For example, if your parent had invested $1,000 USD in McDonalds 30 years ago, they would now have around $26,000 in shares today. 

Imagine waking up and realizing you have tens of thousands of extra dollars all because you put in a bit of effort when you were younger to make a smart financial decision. By starting your investment journey earlier rather than later, you will be able to profit off of your age. Consider dedicating a small percentage of every paycheck to growing your portfolio, as this will pay off big time in the long run. 

2.    Can afford to take on more risk

Another advantage that comes with investing in your twenties is that you can afford to take on more risk. By making long-term investments, you get more time to learn how to navigate the market through experience. A poor investment can have minimal implications, as you have time to reinvest that amount and make a profit from it through the years before you finally decide to liquidate the investments. With the extra cushion of time, you can experiment a bit more with your risk tolerance.

3.    Financial literacy 

One of the most common misconceptions about investing is that you need a business or finance degree to create a portfolio successfully. In reality, most investors are self-taught and learned about the stock market on their own. General financial literacy, however, is not as common as it should be and is only beginning to be introduced into school curriculums. In the world of finance, there will be many people advising you differently and many salespeople trying to sell you a product or service from their financial institution. Not to mention, the never-ending scams found online and the unethical rise of influencer investment advising, where a stock is pumped through popularity and then the influencers sell their shares and profit immensely while everyone else loses their investments. Investing in your twenties is a great way to improve your financial literacy, weed out the trustworthy sources of financial information, and prevent falling victim to scams.

4.    Financial freedom

Investing early is a smart decision financially, as you can secure your financial freedom in the future. The sooner you start the journey, the more time you have to build your wealth and set your older self up for a higher quality of life. By investing in yourself today, you are investing in a less financially demanding life for yourself in the future. By putting in some effort to create a portfolio in your twenties and maintaining it, you could be able to easily treat yourself to a nice trip many years down the line. Life is expensive, so strive to gain some more financial freedom through investing.

5.    Be part of the conversation

If you are in your twenties, you have definitely noticed social media and conversations with friends recently becoming flooded with discussions about investing, crypto, NFTs, among many other fun buzzwords. In addition to reaping the monetary rewards of investing while you are young, you can take time to really understand what all this excitement is about and join these conversations confidently. Many people in their twenties are hobbyist investors who enjoy sharing their opinions on various stocks and markets. 

We can help.

So, do we have you convinced you should start investing in your twenties? If you’re already investing, keep up the great work! If you have yet to start, what are you waiting for?! An investment specialist has the expertise to guide you and will make getting started easy. Call us at 1.833.816.2010.

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Mutual funds are offered through Credential Asset Management Inc. Mutual funds and other securities are offered through Credential Securities, a division of Credential Qtrade Securities Inc. Online brokerage services are offered through Qtrade Direct Investing, a division of Credential Qtrade Securities Inc. Qtrade and Qtrade Direct Investing are trade names and/or trademarks of Aviso Wealth Inc. and its subsidiaries. Qtrade Guided Portfolios is a trade name of Credential Qtrade Securities Inc.

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