Yahoo Finance Investing for young people: 3 tips to get started
This week I had a deep and meaningful group discussion with my influencer friends about young money, finance management and everything in between. To my surprise, I found out that one of them had actually saved up an unfathomable amount of cash for his age.
When you have virtually zero expenses and save everything you make from the age of 15, it turns out you can stack a sizeable mountain.
But when I asked him about his investments, he had no clue about how to go about building assets.
Also read: Building a business at uni with just $20
Also read: 3 tips to find the right influencer for your brand
Here are three ways young people can build wealth and diversify away from cash.
1. The best investment is in yourself
I know it’s corny but in my experience, it's very true. Building businesses or investing in education can be seen as some of the most profitable things a person can do because it has an uncapped potential for growth.
Here's a couple of examples how.
You could take a few thousand dollars and design a custom line of products you’re passionate about and quickly build a business worth multiple your investment just by acquiring customers, building brand value and establishing social media reach.
Or, you could investing in a degree, certification or knowledge and experience in a certain field. If it costs me $1,000 to learn how to build a website to be able to sell multiple websites for $2,000, that's a win.
2. Sophisticated investments
You don’t need to be the next Warren Buffett in order to get into the market. A study by Vanguard Australia showed that if $10,000 was placed in the Australian share market in 1992, by 2022 that same $10,000 is worth around $131,400 with a 9.8 per cent average return for the last 30 years.
In layman’s terms, if you put money into the market, in a safe index fund, over the long term you can have confidence in it going up.
If there are industries you’re specifically passionate about where you research and understand them well, it never hurts to focus on building your portfolio around the niche.
3. Become a real estate tycoon
We’ve all played Monopoly and know you can never have too many properties. I’m a big believer in using your skills and resources to your advantage so if you have the trade ability to be able to fix up and flip properties then that’s where you should be focusing your time.
Regardless of how you go about building assets or investments, it’s important to not also spread yourself too thin. A single person only has so much time to learn, which is why it’s important to make a conscious effort on doing one or two things to an A- or B+ standard rather than 3-4 things at a C or a D standard.
Follow Yahoo Finance on Facebook, LinkedIn, Instagram and Twitter, and subscribe to the free Fully Briefed daily newsletter.
