Great Ways To Invest Your Money In Your 20s
Investing your money is the best way to be financially independent and able to retire as early as possible. When you are in your 20s, your investments are going to be crucial. Because it is the time when you can invest and take the rewards many years in the future, hopefully by the time you’re ready to retire. It is also the time when you’re on the course of building a career.
Whatever your plan is, it is always a great idea to invest your money when you’re in your 20s. And in this article, I have some great suggestions of how to invest your money.
Invest in the S&P 500 index funds
Investing your money in the safest way possible is always preferred. Because the line between gambling and investing can be thin sometimes. As a young investor, your investments should always be concentrated on assets that are always growing.
Time is on your side, so you should take advantage of that. Sure, it will take a long time for your investment to give yields, but you have the time to wait. That’s why compounding interests are your best friends. Your investments will multiply by a lot 20-30 years from now.
That being said, don’t invest all your money at the same time. You still need money for emergencies and current expenses. Make sure you have at least three months’ worth of money in case of emergencies.
Real Estate Investment Trusts (REITs)
Real estate is a great place to invest your money. In fact, the real estate industry is the number one contributor of millionaires. But in this article, I am not talking about flipping houses or renting properties, or becoming a landlord. I’m talking about the safest way to invest your money in real estate: REITs.
REITs are also a growth-type investment strategy and also an opportunity to hold a portfolio of commercial real estate. This type of investment could be even more valuable than owning a single investment property because the portfolio you will get is focused on diversity. It can be invested in many types of properties in various locations. Diversification is only going to strengthen your investment, and not only that, REITs are investing in commercial real estate, which often beats residential properties.
Another great thing about REIT is that you can invest only a couple of thousands of dollars. Obviously, you can’t buy an investment property with this amount of money, but not a problem with REITs. Furthermore, you don’t even have to manage your investment yourself, so you will have more time for other things.
Buy a home
I know what you are thinking. Not many people in their 20s can afford a home. But, here is the thing, many people who can afford to buy a home are hesitating to do it. That’s a big mistake. By owning a home, you are building substantial equity over many years, and you don’t have to pay rents anymore.
You also don’t have to buy a house outright with cash. You can take advantage of leverage with as little as a 3% down payment, sometimes no down payment at all. Furthermore, you’d be surprised at how good the leverage is and how little money you need to start your investment.
Also, keep in mind that not everyone should buy a home even if they have the money. Some young people need to move from city to city or even abroad due to their jobs. Sometimes they also change their jobs depending on what they want to do next. In this scenario, buying a house can be a bad idea.
A retirement plan
Saving for retirement is what almost everyone is doing their whole life. You will want to retire someday, and you need enough money to survive. To save for retirement, you need to create a long-term plan based on your income, expenses, and lifestyle.
Being in your 20s is the best time to start investing for the future. With time on your side, you can take advantage of many types of investment. Invest a portion of your wealth and wait until you accumulate enough money to retire.