I is for Investing in Your Twenties

 

Youth is a wonderful time to dream of all of life’s endless possibilities. So why spend time worrying about your golden years? A good reason is that in this day and age, you will probably find that YOU and YOU alone must fund your retirement. This doesn’t mean you need to stop pursuing your dreams. What it does mean is that you also need to start planning and securing your future now.

Here are some of the benefits you can obtain by starting this process in your twenties:

Lifelong Savings Habits – learning to save now will help curb your appetite for consumer purchases throughout your lifetime and help you avoid debt.

Time – young adults have a time advantage which allows for the power of compounding. This is the ability to grow an investment by reinvesting the earnings. The longer your money is at work, the more wealth it can accumulate for the future.

Higher Risk Tolerance – having years of earning potential in your future, you can afford to take on more risk in your investment activities. Older investors lean toward low-risk or risk-free investments. Younger investors can afford to take on more risk and this aggressive approach may allow for greater gains.

Learning curve – investing wisely takes knowledge and you have years to refine your financial understanding and comprehension.

Technology – the younger generation has countless opportunities to study and research investing through online financial and educational web sites.

Being a twenty-something investor has positive advantages over those who avoid investing until a later age because you have time on your side. You have the ability to endure increased risk and the opportunity to improve your understanding of investing and how to solidify your financial future.

Answers from AZ

About Ann Zuraw

Ann Zuraw, the voice behind "Chicks, Chat and Change", is a Certified Financial Planner (CFP®), Chartered Financial Analyst (CFA®), and Certified Divorce Financial Analyst (CDFA™).If you have comments on this post contact Ann Zuraw

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