Why You Should Invest In the Stock Market In Your 20s
Hesitant about investing in stocks even though you're young? These are the reasons why you should invest in the stock market in your 20s.
While we're still young in our 20s, there are so many opportunities we can take on. From job opportunities to gaining a higher degree, we take on certain roles for a bigger and brighter future. But what about investing in the stock market? So many young people believe that they will easily lose and waste money from putting down money on stocks. Once they've invested, all that money is gone and it'll be difficult to regain it back.
This is certainly not true. In fact, investing in the stock market around your 20s is a brilliant idea. Not only are you able to collect money for the future, but you get to learn a lot about the market world. Sure, there may be ups and downs when it comes to investing in stocks, but while you're young, it doesn't matter! It's also a way to make money while you sleep. Here are the real reasons why you should invest in the stock market in your 20s as soon as possible.
It pushes you to pay off debt quicker.
While the average annual rate on a credit card is 14.95 percent, you can gain 10 percent annual return if you invest in stocks, believe it or not. However, you can actually lose money if you took a precise amount and invested in stocks if you saw 10 percent return. Your debt can cost 14.95 percent if you do have credit card debt.
You’d be in a better position if you took the same capital and paid off your debt. While student debt or interest rates are lower, about five percent, all debts should still be taken care of before investing.
You won't need the money anytime soon.
Since time is the essence of the stock market, starting to invest in your 20s is brilliant. Since you’re years far from retirement, the stock can go up or down and it won’t take a serious toll on your 401(k).
However, if you’ve retired already and your 401(k)’s value goes down… you’re in trouble. That’s why, if you start investing in your 20s, it can show you better results through the stocks constantly moving around. Plus, you’re caring more about increasing the average return.
It's a great way to save for retirement.
It’s never too early to start saving for retirement! While in the earlier years of saving for college, now it’s time to start collecting money for retirement. It doesn’t matter if you’re retiring years and years from now, what will matter then is using all the money you’ve been saving up just for retirement.
While you’re drowning in student loans and job hunting, I’m sure you don’t even want to think about saving for retirement. In fact, investing in stocks can be a great way to grow your money and start collecting for the future. While it's one of the reasons why you should invest in the stock market in your 20s, it's also one of the best ways to save money for the future, especially for retirement.
You don't have to invest everything you have.
When it comes to investing in stocks, no one said that you have to invest everything you have. There's no need for you to put in hundreds of dollars every month to see a remarkable return. A lot of people don’t actually do this and it’s not what investing in stock is all about. You have to have cash for current debt, too!
However, you can simply invest a dollar a day, which will come out to be $365 for the year with a three percent return. Even though that won’t technically be enough to live off of during retirement, it’s just a thought. Therefore, you literally don’t have to put in thousands a year to see a grand return. Trust me, putting in anything will benefit your financial savings.
You have time to recover if anything happens.
I’ll admit it for everyone who’s investing in stocks, it’s all gambling. Indeed, the stock market is certainly a form of gambling and that’s why so many people are so into it. The idea of losing and gaining can send an adrenaline rush into anyone. Yet, among the reasons why you should invest in the stock market in your 20s, you certainly have time to recover!
When you’re putting down money into a company and hope that the stock will grow and grow, there are times for loss—and can frighten literally everyone investing. Even though you’re still so young and new to the stock market world, you have plenty of time to recover for any losses. With so much time, you have greater chances of being successful in investing in stocks.
Investing in stocks isn't hard at all.
If you're a finance major or work in finance, then you should know the stock market and everything about it like the back of your hand. However, if you're clueless, it's actually not that hard to follow through. If you're reading the charts and your mind suddenly goes blank, don't think that investing in stock isn't for you.
Among the reasons why you should invest in the stock market in your 20s, investing in stocks is pretty easy to do and understand. There are so many online resources to go through, books based on the stock market, and other sources to gain knowledge. There are also apps to help you manage your money when it comes to investing. But if you’re having real trouble acknowledging everything, you can speak to a financial consultant to guide you through investing methods.
Investing is a life-long process.
Why you should invest in the stock market in your 20s is super important, because it’s practically a life-long process. It’s not a few years, but it can be almost your entire life! Through time, you can save for an emergency fund, for retirement, or even for vacations.
Since investing is a life-long process, starting young can lead to saving much more. If you start a few years before retirement, you actually won’t be able to save enough for retirement. That’s why you should begin investing in stocks while you’re still young and continue for many years until retirement.
The market can be your best educator.
Sure, taking finance courses or majoring in the field can teach you a lot about the stock market. You can also learn so much through reading article after article about investing, the stock market, and everything in between. While you’re only learning the basics about stocks, it can take you a long time to become a master in the field.
That’s why actually being part of the stock market and investing is one of the greatest reasons why you should invest in the stock market in your 20s. It shows you way more than a course. Since you’re already investing in stocks and keeping an eye on the charts, you can understand and even capture the stock price movements quicker than learning about it.
While you handle more risks, you can earn greater rewards.
Last on the reasons why you should invest in the stock market in your 20s is that you can handle the risks better. If you're already in your mid to late 30s and just starting to invest in stocks, when you come across a loss, this can seriously take a toll on you with little to no time to recover. But when you're young in your 20s, you have plenty of time to recover.
When you’re a young investor, you can definitely handle greater risks and even earn higher returns. If things suddenly take the wrong turn for you, you have enough time to put in any additional savings and patiently wait for the markets to revive itself. But you can’t do this if you’re starting to invest at a late age, because retirement is coming closer by the days.