When you’re in your 20s and making money for the first time, the last thing on your mind is worrying about the future. You might want to take some chances. You might want to figure out how the stock market works to see if you can make some big money. You might want to risk the money that you save for the hope of earning more money in return.
Should you be taking risks with your money right now?
I’ve taken many risks. I’ve been told that your 20s are the ideal time to take chances with your time and your money.
To be completely honest, I haven’t been taking many risks lately. I’m keeping most of my money in a basic savings account with ING Direct. I stopped investing in the stock market. I don’t think I’m taking as many chances as I should be.
Long time reader David, left a great comment on taking risks the other day when I wrote about stock market rules to live by:
Some people you talk to will say, “you can afford to go ask risky as possible, you’re young.” You aren’t doing yourself a favor if you invest in something “Very High Risk” then sell once it loses 50% of its value, even if it then rises to many times your initial investment; you have locked in your losses when you sold. This all relates to risk tolerance.
I wanted to look at both sides of taking risks. Let’s start off by looking at the benefits of taking risks with your money and time in your 20s:
- You can really hit it big. This article isn’t about the best investment options, but if you do make a wise investment with your savings you can hit it big. You can be thankful for the rest of your life if your time or financial investment pays off.
- You’ll never wonder about “what if.” The one feeling that I hate the most is regret. I don’t want to be someone that lives with regrets. If you choose not to take a chance with your time or money, you’re likely going to regret it. Is it worth living with this regret?
Now that we know that certain chances are worth your time and money in your 20s, we must look at the negative side. What can go wrong if you steer away from low risk investments and start to take big risks?
- You can lose your savings. If your investment doesn’t go as planned you can lose your savings. Just as you can double your money, you can also lose your money. What will you do if you lose your money? Could you handle this?
- Time can pass you by. There’s always the negative side to spending too much time on following your passions. Time can pass you by. You can turn 30 one day and realize that you still haven’t made it while your friends have all moved on. Not everyone’s meant to be the next Mark Zuckerberg.
As you can see there are pros and cons to taking chances with your time and money in your 20s. What you do is up to you. I just wanted to discuss the idea of taking risks right now.
“Twenty years from now you will be more disappointed by the things you didn’t do than by the ones you did. So throw off the bowlines, sail away from the safe harbor, catch the trade winds in your sails. Explore. Dream. Discover.” — Mark Twain