4 Investment Strategies For 20 Year Olds

With the start of a new year as a young adult, This post will cover 4 Investment Strategies For 20 Year Olds. it’s best that you start becoming more knowledgeable in personal finance early on. In a study from CNBC, it stated that for young millennials (aged 18-24), 46% have no money in their savings account. The other 67% have only accumulated less than $1,000. That article was written in 2017 and I can’t imagine what it’s going to be like 5 years from now.

Side Note: This post is about investing in yourself early on. everything covered here is no secret.

This is why understanding how to handle money and even make good amounts of money will benefit everyone (and any age) longterm. Just know that I am not a professional and all the information that I provide is based only on opinion by me. These 4 Investment Strategies are what will help you out with getting started. Now, let’s get right into it.

Build Credit

4 Investment Strategies For 20 Year Olds

Once you have the opportunity to open up a credit card, do it. You want to be able to establish credit very early on. Building credit will help with buying a car, House, insurance, and other stuff. A lot of young adults will save their money from a job and want to buy a car. The only big problem that will be a hurdle is credit. Those that have good credit will be able to take low interest rate loans towards a new car while lower credit will pay higher rates. I mean you could always have someone as a co-signer, but they will rely on YOU making the payments on time so it doesn’t hurt their credit. This is why taking initiative to start building credit early on is a BIG must.

Nerdwallet recently posted a new article showing their pick for the 4 best starter credit cards to open and build credit. the list are:

  • Capital One® Secured Mastercard
  • Discover it Secured
  • OpenSky Secured Visa® Credit Card
  • DCU Visa Platinum Secured Credit Card

You can read an in depth insight about the pros and cons for why Nerdwallet suggests it here.

Side Note: Make sure that you NEVER hit your credit card limit and max it out. You don’t want to waste time paying of the credit card or getting hit with interest. Make small purchases and then pay it off fast.

Get A job

4 Investment Strategies For 20 Year Olds

Yes, you need to start looking for a job. Hell if you can, try to get one at 19 years old or whenever you graduate high school. You want to get the experience of working early on to know what you like and don’t like. This will push you in the direction of helping you figure out that long term dream job. Now if you are one of those that are saying “I’m not getting a job! I am going to become an entrepreneur!” Here’s my response to that: Use the first job you get as a hands on learning experience about the business world and customers.

If you want to make and sell things, then take a retail job to understand what customers are buying. understanding people’s needs and wants are the basic concepts of economics in business. You need to also look at the first job as a way to fund ventures you want to try or for investing in other things. That way if you fail, at least you’re getting a check somewhere.

And if you’re still high school right now or college then start looking into some freelance work. Like I said in my last post here, we are living in a time when making money in so many ways (that are ethical) is not impossible. You don’t need huge amounts of money to try and do something. Just know that getting communication, time management, and critical thinking skills in a work environment will benefit you a lot long term. that’s 100% certain.

Go To College

This section is for the young adults that are on the edge about this. Being young and going to college should also be looked at as getting your first job. It exposes you to the academic world and the different career paths that you can pursue. Take courses that interest you while taking the general requirement classes (math, english, etc). In any class that you take, the professor will give you insight to what he/she loves teaching the subject. This in turn can help you discover a potential career to work towards.

This doesn’t have to be for only degrees. Search what certificates your college offers that interests you. If possible, go to a community college first then switch over to a 4 year if you plan to go beyond an Associates Degree. You will save a lot of money and not have to deal with absurd amounts of student debt.

And while I am on this topic, get into the habit of reading everyday. My grandfather once told me that if you ever want to hold a conversation with people (intellectual or not), read a book. Reading does not just give you pleasure of getting lost in stories or learning new things, but being able to talk about it with others. Sitting around a bunch of people that talk about how they hate this and that will get boring really fast.

Start Investing

4 Investment Strategies For 20 Year Olds

This is the best for last. If for some reason that at 20 years old you are not already investing then today needs to be the day to change that. You want to take advantage of long term gains for future retirement and investing now is how you’ll succeed. And to further stress this point, it has never been a better time to start investing. There are so many apps like Robinhood, Webull, Acorns, and Stash to help you get started. Investing a little bit every month into a diverse amount of stocks is a good starting point.

Apps like Acorns and Stash will automate investing for you while Robinhood and Webull is geared towards those that want to invest for themselves. Below is a video from Graham Stephen showing you his top 5 best investing apps.

Side Note: If you click Acorns, it will take you to another screen in which once you sign up you’ll get $5 dollars to start investing

Thank you for reading the 4 Investment Strategies For 20 Year Olds. This post is more for the young 20 year olds that no nothing about personal finance or barley starting to dive in. I basically layed out a simple guideline that 20 year olds should start doing as soon as possible. Share this with someone that needs to get a head start in personal finance.