Whenever people find out that I run a personal finance site they start asking me about investing. Everyone wants to know about investing money. Common questions about investing money arise:
What’s the best investment?
How can you double your money in this economy?
Where should I be putting my money?
There’s not really a general answer that you can give on a complex topic like investing. This is why it’s difficult to tell a stranger where to invest their money when you don’t even know what their income is like or if they have any debt at the moment.
I’ve tackled investing your money on here before and I’m not shy about discussing this topic. I’m not going to beat around the bush in this article. I will give straight answers to every question. Let’s not waste any time…
Should you invest your money in your 20s?
It’s super important that you make your money work for you. You worked hard to start making money. You likely had to:
- Earn some credentials.
- Put a few years of hard work in.
- Create a resume.
- Apply for jobs.
- Pass the interview.
- Pass the probation period.
Now you’re finally working and making money. It’s time for your money to work for you. You shouldn’t be afraid of investing your money. You don’t have to invest all of your money. Just a bit of it.
[Quick note: If you’re ready to start investing, I urge you to sign up with Betterment. You get $25 for free, a 30 day trial period, and a hands-off money management tool to help you make more money than ever before.]
Should you pay off debt before investing?
I’m biased because I hate debt. I worked like an animal in college so that I didn’t have to stress about student loans. While I wouldn’t recommend chugging energy drinks to get through a long day, I do recommend doing everything possible to become debt-free as early as you can.
You need to pay off your debt first. Then you can focus on investing your money. There’s no need to get involved in complex leverage strategies when you’re first learning about investing money in your 20s.
What’s the best investment in your 20s?
You have to invest in yourself. I will preach this until the day I die. You’re stuck with yourself for the rest of your life! Socrates I am not, but you have to be able to rely on yourself.
How can you invest in yourself in your 20s?
- Cool experiences.
- Networking opportunities.
- Meeting people who you can connect with.
- Learn a new language.
- Anything else that will improve your situation.
Every dollar that you invest in yourself has the potential to double in the future. You owe it to yourself to live a great life.
What are the other best investments in your 20s?
Once you pay off your debt and start building your savings, you can get involved in other investment strategies. The two most common direct investments in your 20s are:
- Investing in stocks. To learn more, I highly suggest you check out my post on how the stock market works. That should help you get started here. I used to trade stocks, but have shifted away from this in recent years to get more involved in the second option.
- Buying rental property. I bought my first rental property a few years ago and it has been a pretty educational experience thus far. The only caveat about rental properties is that you better have a lot of money saved up and free time to go from A-Z on finding a tenant. I’ll be writing more on this in the near future.
What if you don’t understand an investment?
My rule is simple: if I don’t understand the investment, I don’t get involved.
If you’re intimated by an investment idea or feel confused, then don’t get involved yet. You always have to do your research first and ensure that you understand what’s going on. This is your money. Don’t part ways with it until you’re totally comfortable.
Donald Trump once said that the best investment is sometimes the investment that you don’t make.
Are you ready to start investing? If you have any questions, then please leave them below. I’m here to help you start investing.