Get yourself a university degree, then a career, foot on the property ladder, and finally, a family: I remember all too well the societal pressures associated with living my 20s.
Problem being, as someone who didn’t actually ‘find their career’ until the age of 30, much of my 20s were spent in somewhat of a financial limbo, earning just about enough to get by.
And, even though I did really enjoy my years as a twenty-something, there is one thing, in hindsight, I wish I’d done differently: pay just that little bit more attention to my finances.
Specifically, I wish I’d thought about ways in which I could have made the money I did have at the time work harder for me over that ten-year period. And investing is one way I could’ve done that.
With that in mind, please enjoy the rest of this blog free from the illusion that your 20s should be spent waking up at 4am to take an ice bath, feeling safe in the knowledge of having a six-figure salary as the founder of your own Crypto startup.
Because, for the majority of us, that’s just not the reality of life, is it?
Instead, think of what you’re about to read as five investment truth bombs; a series of small (but perfectly normal) mistakes that somebody else made in their 20s, so you don’t have to…
1. You don’t need to be ‘rich’ to invest
Gone are the days where you need to be rolling in money, suited and booted, or working on Wall Street to invest.
At Wealthify, for example, we’re proud to offer everyday investing for everyday people, meaning you can start from as little as £1 for our Stocks and Shares ISA, Junior ISA, and General Investment Account (and £50 for Pensions). Just remember that, as with all investing, your capital is at risk, and you could get back less than you put in.
Now, £1 might not seem like much, but I also wish I’d known that…
2. Little and often is better than nothing at all
This is the one I really kick myself about, because ten years is not only a good chunk of time to save, but also a long time to be in the markets. In fact, investing is typically considered to be something you do for the long-term – at least 5 years – giving you more time to ride out market dips.
Bearing in mind that I had my first ‘real’ job at 21, even if I’d taken a realistic amount from every paycheck – let’s say £50 – that’s still £600 a year (and £5,400 over the remaining nine years of my 20s)!
And it’s being able to think about these sorts of financial timeframes that only now makes me realise why…
3. Having a long-term mindset is key
It’s important to remember that seeing results when investing always has been – and always will be – a marathon, not a sprint. And, in this age of instant gratification, that can only be a good thing.
Why? Because, as well as giving you plenty of time to drip feed your portfolio (where you invest little and often, allowing you to potentially purchase investments at a good price), investing in your 20s could be a great way to start thinking about your financial future in a more long-term, holistic manner. Something made easier still if you…
4. Keep track of ALL your workplace pensions
Sure, finding a lost pension isn’t the hardest bit of life admin you’ll ever have to do. But if, like me, you’re left having to track down over a decade’s worth of them in your mid-30s, then just trust me when I say you’ll thank me for this one!
As well as keeping track of all my different pensions, I also wish I’d known about being able to consolidate them sooner. This is where you transfer them all into one pot, making it easier to see how much you have saved.
Now, consolidation might not be right not for everyone, so please seek financial advice if you are unsure about it.
But, from an investment perspective, combining all those smaller pots into one bigger jar could have given me more time and opportunity for growth, by reducing some of my fees and giving me a clearer picture of just how much money I had tucked away. Based on this, I could have given my savings a boost by deciding to start paying more into them sooner.
Granted, it wasn’t a life-changing amount in comparison to what friends and family had in theirs, but when it comes to building wealth…
5. Never compare yourself to others.
With influencers and your wider social media network constantly posting about their ‘best life’ online, the grass usually seems greener on the other side nowadays.
If I could go back and tell my twenty-year-old self just one thing, however, it would be that there’s no wrong way to invest — just the way that’s right for you.
Please remember the value of your investments can go down as well as up, and you could get back less than invested.
Wealthify does not provide financial advice. Seek financial advice if you are unsure about investing.