It’s easy to think that investing is something that wealthy people do, once they have set themselves up with a rewarding career, a nice home and all the other things that make life worthwhile.
After all, there are plenty of other demands on your cash in your 20s.
The fact is, you should probably start investing well before you hit those life goals, for three very good reasons.
And while you are in your 20s may be the best time to do it.
1. By investing, you will make those life goals – a home of your own, security for now and a nest egg for the future – easier to secure.
Cash may be short, but you probably try to save a bit for emergencies and towards a first home.
Savings are safe and secure, with the protection of the governments FSCS scheme, replacing your cash if a savings account provider should fail. But they are slow at building your cash – even though they now pay more interest than they used to.
2. The earlier you start, the more rewarding investing can be.
Time is money. The more time you have to invest, the more time your money has to potentially grow, or rather multiply by the wonders of compound interest. This means of course the interest your money earns in one year itself starts to earn interest the next.
If you are in your 20s you have plenty of time for your money to grow. It could be 40 years until you retire and turn to the nest egg you have been building up.
Research and an understanding of your investment goals and risk tolerance are vital before making investment decisions.
This brings us to our third reason.
3. Investment is actually much easier than you probably think
Starting investing in your 20s (or at any other time) is easy. You don’t need to be an expert, to study the market to look for a sure-fire winner. There are no such things, and trying to play the market may be an effective way to watch your money shrink instead of grow.
Finding the right solution for you, such as an ISA, to keep your investment out of reach of the taxman, finding an investment strategy with the balance of risk and reward that you feel comfortable with will all help towards your future goals.
For that, you may need some expert help. The easiest way to get it is simply to call us at Continuum.
The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to suitable savings or investment strategy, you should seek independent financial advice before embarking on any course of action.
The value of your investment can go down as well as up and you may not get back the full amount invested.
When investing your capital is at risk.
Investments do not include the same security of capital which is afforded with cash accounts.
The Financial Conduct Authority does not regulate taxation advice.
