Where to Invest in Your Twenties?

Starting saving your money  in your twenties is almost a sure way to build wealth during your lifetime, and if done properly, even retire early. But it all requires strategic planning and investing. Not only that but you should also, ideally, start in your twenties.

It’s true. Search for a “financial advisor near me” and ask them. They’ll most likely tell you that contributing to your retirement savings account starting in your twenties and your thirties has a difference of about half a million thirty years down the line.

So, with so many tips going around the internet, we decided to simplify investing in your twenties to just four important “where to” invest in the second decade of your life.

Enroll in a 401(k) and take full advantage of it.

If you aren’t enrolled in even a simple 401(k) at work, then you’re missing out on free money. And when you’re in your twenties, maximizing the amount of free cash you receive in your bank account is a must.

Using your 401(k) account to its full advantage is a sure way to make the most out of tax-deductable money from early on.

Diversify your investment portfolio as much as possible.

It’s okay to fail, especially in the beginning when you’re just starting and figuring out how to invest. That’s why it’s also important to understand how to diversify your portfolio and invest in as many things as possible.

But also make sure you aren’t chasing trends just because some other investor is pouring money into something. When you have limited funds, it’s all about investing smartly. So, put your money into investing in proven and profitable things. Apple stock, real estate, and such are all great choices.

Make a plan to pay off all of your debt and focus solely on it.

One of the most important things you should focus on when you’re in your twenties is to fully pay off all your debts. If you’re just graduating school, or you’ve simply mismanaged your money when you were younger.

Make a plan to repay your debts and focus on putting the majority of your money towards paying that debt. Even if it’s something as simple as an excel table with four rows, focus on putting your money towards the downpayment.

Image Credit: CafeCredit via Flickr CC 2.0 – Where to Invest in Your Twenties

And last, but not least, invest in yourself.

When you’re young it’s a really good idea to invest in your knowledge and your health. Don’t save on health and knowledge.

These are the years when you’re formed as an individual, so it’s important to learn as much as possible. It would give you a head start of sorts.

And it’s also super important to focus on sports and health. One of the most important things you should invest in if you need is a dentist. How well your teeth are taken care of in your teens and twenties will pretty much define how long you won’t have to get a root canal or even an extraction.

When you’re talking investment in your twenties, most of the things you will invest in won’t necessarily make you a lot of money. Most of the return you’ll see won’t be immediate, but more of a down-the-line, in five, ten, or fifteen years.