The world has gone crazy, immigration floods the country with increased population and jobs sometimes seem hard to come by, while the banks and government combine rules and laws that protects property markets from ever going backwards and it’s leaving our younger generation financially powerless, or so it seems.
There’s a movement brewing, people in their early 20’s are squirreling away a little bit each week and the outcomes are inspiring. Investing in your 20s is a smart move if you can figure out what we share here.
It Feels Like Everyone’s Falling Behind… Or Are They?
If you’re in your 20s or early 30s, you’ve probably felt it:
- House prices keep rising
- Rent is climbing
- Wages aren’t moving
- And investing? That feels like something older people or rich people do.
But here’s the truth: young Australians are investing, and not just the finance nerds.
We’re about to Obliterate what is holding most young people back:
Investing in your 20s doesn’t have to be scary, so in this article we obliterate the things holding many people back from making a start, and compounding the knowledge that will be highly beneficial later in life. Here’s a few:
- “I don’t know how to budget” – We’ve got an interactive easy to use budget for you.
- “I don’t have enough money left over” – Let’s find a way to level up your income.
- “It’s too risky” – It doesn’t have to be, and we’ll show you why.
- “I don’t know where to start” – This is the easiest one to fix.
Don’t know budget, Upcoming Expenses
Story about hysterical people getting rego in the mail (it comes every 6 months right?).
A friend of mine loses it, about every 6 months or so. Their hysterical reaction gets me in, “what’s wrong”. I just got my rego they reply. I say, doesn’t that come every 6 months?
“Yes, but I didn’t expect it.” They replied.
I can only think, ok, but you know it’s coming right?
Don’t get caught out, plan ahead with a budget.
Not knowing about expenses is the biggest reason that many people don’t invest anything at all. They don’t put anything away, they burn it all or they simply don’t want to think about money.
Yes funds get tight, yes things aren’t easy when you have to work, study and develop your skills in your career path to get anywhere, but putting a little away takes very little effort when you see this next reason young people don’t invest.
This budget template might help people fill in the gaps and get ahead of bills so they know how much they can safely put away for their future. This one isn’t just for people investing in your 20s, it’s perfect for anyone that hasn’t got a budget.
Download the Budget Template (it’s free)
Example shown below, unlock the stats page in the download link and fill in the fields to see where you stand.
Not Having Enough Money
Believing you need to send hundreds or thousands at a time into an account.
Darrel sends between 30 and 50 a week and its stacking big time.
Separating it away from spending money frees up the mind to focus on fun things, like what you get up to on the weekend. By separating it away, I mean sending the savings amount each pay cycle into your investment account, so you can’t touch it unless you really need to. It seriously helps clear your mind from thinking “do I need to keep this money for something else?”.
Clarity of mind by not having to think what you’ve got left.
Successful people know that success is gained by chipping away at the goal, you don’t just land there after one big win. It’s a consistent grind over years and starting today is the only way to get in.
Remember that when you buy shares, you own them and can sell them in the event you really have to. The money isn’t ‘gone’, it’s in another asset and remains yours to keep.
Not having enough money raises another concept. Rather than your income being your sole limit you have to adhere to, why not run a side hustle. There’s tons of ideas out there and it’s never been easier to earn money, often it’s as easy as downloading an app, signing up and getting deals to make money whether it’s Uber or freelance work etc.
Here’s a quick list of side hustles people use to boost their income:
Ride Share Driving Side Hustle
Apps like uber, uber eats and DiDi allow people to drive for money. Uber even has a quick cash out feature for those really low on cash now and need to buy food or fuel.
Upwork and Airtasker Side Hustle
These freelance apps are a marketplace of skill, where you can sell your abilities doing things. You might have a marketing skill, programming, handyman, lawnmowing or perhaps even crafty concepts that people are looking for. Whatever your skill, apps like Upwork or Airtasker could help boost your earnings and increase your surplus.
Upskill
While not an earning method now, it can help get you into higher paying roles or even allow you to go out and do your own thing. Upskilling on something you enjoy or have a knack for could help boost your earnings, but learning takes time so be prepared to wait for the rewards to roll in.
Commission Based Work
When you’re good at what you do, commission-based work can be lucrative and doesn’t have to eat into your day-to-day job. Find a company with a problem that you can solve, and offer commission-based work to solve it. If you know an industry really well, have a specific skill set that they can utilise, offer your help in exchange for commissions on result. Be sure to make sure you’re not running into any conflict of interests with your current employment and make sure the outcome and earnings are laid out clearly before doing any work.
A Reason to Save
House prices are through the roof, the market shifts by 10% and your deposit has been belittled within that time with no way of catching up. Rents raise and your finances once again get squeezed and inflation pushes up the price of just about everything… except your wage.
Picking the right investment when Investing in Your 20s
Buying something that is meant to go up in value seems to put on the pressure for many new investors, since they are comparing physical things they could be buying right now instead. Investing in your 20s is about learning how it all works and making a start. The sooner you’re in, the sooner you will get a feel for how shares work, how they move and what’s at risk if you do make the wrong call.
On the other hand, inaction costs by way of inflation and its effect on your cash. If you only hold cash, you’re essentially already invested and if that stock goes up, your cash has gone down.
Most investors realistically just want a place to put their money to go up, not beat indexes or be the top performer in investment history. Often, it’s just to protect against these crazy house price increases, inflation and cost of living. But what is inflation?
Protecting from Inflation
Most of you have probably hear the term inflation. But what does that actually mean for the money in your hands right now?
If other things go up in cost, your money becomes ‘less valuable’ comparatively. It’s all about what you can buy with the money in your hand, versus the things you want to buy.
Think property, coffee, groceries and fuel. If the price inflates, your money buys less of it.
That means when your money sits in something (like a stock), that inflates with the market, then you are protecting yourself from that inflation.
Money is designed to squeeze those who hold it without investing. It loses its value as other things inflate, and it is designed to be that way. It helps influence those that know this, to invest.
These top global ETFs are some of the easiest ways for beginners to make a start without putting too much pressure on what to pick.
Not Sure How to Invest?
Unless you already know where you invest, many people don’t know where you actually do it or how it works. Investing in your 20s means you are not alone when it comes to learning, but starting sooner means you will know more when you have more money later in life.
Macro Global Markets is where you invest. It’s easy to set up and you send money into your investment account then you can select a stock and buy it.
Here’s a video showing you the trading platform and how easy it is to search a stock and place a trade.
0 Comments