It’s no secret that the most enjoyable time of our lives is our 20s. Not only it’s when we try to do everything that we want to do – from food trips to various adventures; but it’s also the decade that prepares us for a bigger life stage which millennial like to call “adulting”.
For many young adults, it seems easier to put off any investing decisions until the financial situation becomes, at least theoretically, more stable. But one thing is pretty sure though – we all want to live a comfortable and sustainable life in the future. This is why preparing for the unknown and investing as early as possible are always smart choices.
Twenty-somethings are actually in a prime position to enter the investing world, and listed below are tips to guide you as you invest in your 20s.
Start with basic practices
Successful investing usually starts with the most basic practices. For example, deciding to make savings a part of your daily habit is actually a beginning of a fruitful future. Have you encountered those P20, P50, or P100 challenges online? It’s not that bad to give it a shot. Besides, you can always start with small amounts then just work your way to higher ones.
It’s also another option to deposit your money in a bank with interest rate for savings. In this way, you can incur additional profit to the money you are saving.
Invest in yourself
While money may be tight, young adults have the time advantage. It’s definitely not too late for you to acquire new skills and knowledge you can monetize. In fact, investing in yourself is a valuable investment that can have strong returns.
You can also increase your financial literacy by attending seminars, reading investment books, getting help from financial experts, and even study investing and learn from its successes and failures.
When it comes to the increased risk that can be absorbed by younger investors, no need to be concerned too much because there’s an assurance to overcome investing mistakes as you have the time needed to recover.
Getting insurance isn’t really a priority especially when you’re living young, wild and free. But the phrase “prevention is better than cure” always resonates in every Filipino household, right? Don’t underestimate the importance of insurance in investing in your health and wealth.
What’s good in exploring insurance plans nowadays is that most companies offer an insurance + investment type of setup, which usually costs around P2,000 to P5,000 a month, at the very least. To not make it a monthly liability, you can simply think of it like a utility bill that you have to pay regularly. But contrary to utility bills, you can benefit from insurance in the future.
Diversify your income streams
One of the secrets to investing is diversifying your income streams. Have a good spending and saving habit? Good. Have side gigs for extra profit? Fantastic. But if you really want to get to the nitty-gritty of investing, then you have to explore other places to invest your money in. For starters, you can invest in stocks and bonds, like index funds or exchange-traded funds.
Of course, this is riskier than simply opening up a savings account, but all long-term investment goals always include an ounce of risk.
Explore real estate investing
There’s this old saying that says the best time to plant a tree was twenty years ago. The second best time is now. This is true in real estate, as buying a house or a condominium unit can pay off big time if you invest wisely in your younger years.
Owning a house rather than renting is often a good way to save money and set yourself up with a valuable asset in the future. However, renting it out can be even better as it’s a guaranteed source of income that can pay off your mortgage while also earning you some extra money on top.
Getting this early start is one of the best decisions so far made by a 26-year-old engineer. At 25, he started to think about the future and considered that the idea of investing in a house and lot in Camella would be a smart choice. Now, he’s 26 years old and he’s few months away from completing the down payment. It wasn’t a smooth investing journey. There were times when he struggled to pay the monthly dues, but he put commitment and hard work to make it sustainable.
The house is for his family. Soon, they’ll be moving in to what he calls his “dream home.”
If he can do it, so can you.
The 20s is certainly a defining point of our lives. It’s when we experience the world and the freedom that comes with it. But as one cliché says, “freedom comes with responsibility.” What we do in our 20s will draw an outline of our lives 20 or 40 years after, and making healthy financial decisions is always at its forefront.