Why You Should Start Investing in Your 20s

Hey there, Posh friend! If you’re reading this, you’re probably in your 20s, just getting started on your journey to financial freedom.

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Maybe you’ve got a steady job, you’re paying off some student loans, and you’re even managing to save a bit each month. That’s awesome! But, have you thought about investing yet? If not, don’t worry—you’re not alone. Investing can seem like something that’s only for the “adults” or something you can start doing once you have a lot more money.

But here’s the truth: Why You Should Start Investing in Your 20s is because the earlier you start, the better off you’ll be in the long run. And the best part? Thanks to some amazing investing apps, getting started has never been easier.

Why Should You Start Investing Now?

Before we dive into the nitty-gritty of investing apps, let’s talk about why you should start investing in your 20s. The biggest reason? Time. When you’re in your 20s, time is on your side. This is because of something called compound interest.

Imagine you start investing $100 a month at age 25, and you keep doing that until you’re 65. If you earn an average return of 7% per year, by the time you hit 65, you’ll have over $260,000. And that’s just from investing $100 a month!

Now, if you wait until you’re 35 to start investing that same amount, by 65, you’ll have about $122,000. That’s still a nice chunk of change, but it’s less than half of what you could’ve had if you’d started ten years earlier. Crazy, right?

The point is, the earlier you start, the more time your money has to grow. Plus, when you’re in your 20s, you can afford to take a few more risks with your investments. You’ve got decades to ride out any market ups and downs, which means you have a better chance of seeing solid returns over the long haul.

If I could only go back in time and tell my younger self to start investing NOW! I so would go back and kick some sense into myself.

Enter Investing Apps: Your Easy Way to Start

Now that we’ve established why you should start investing in your 20s, let’s talk about how you can actually do it. You don’t need to be a Wall Street wizard or have thousands of dollars to get started.

Thanks to technology, investing is more accessible than ever before. There are several user-friendly investing apps out there that are perfect for beginners, and today we’re going to focus on two of the best: Acorns and Stash.

Acorns: Invest Your Spare Change

Acorns is an incredibly popular investing app, and it’s easy to see why. The concept is simple: Acorns rounds up your everyday purchases to the nearest dollar and invests the spare change. For example, if you buy a coffee for $3.50, Acorns will round it up to $4.00 and invest the extra 50 cents. Over time, those little bits of spare change can add up to a significant investment portfolio.

But Acorns isn’t just about rounding up your change. The app also offers different investment portfolios that are tailored to your risk tolerance, ranging from conservative to aggressive. Acorns even has a feature called “Acorns Later,” which helps you set up and invest in a retirement account, like a Roth IRA, so you can start planning for the future.

The best part? You don’t need to know a lot about investing to get started with Acorns. The app is designed to be super user-friendly, and it does most of the work for you. Plus, you can start investing with as little as $5. It’s a great way to dip your toes into the world of investing without feeling overwhelmed.

How to Get Started with Acorns:

Sign Up: Download the Acorns app and create an account.
Link Your Accounts: Connect your bank account so Acorns can start rounding up your purchases.
Choose Your Portfolio: Select an investment portfolio that matches your risk tolerance.
Start Investing: Begin investing your spare change automatically, or make additional contributions if you want to grow your investments faster.

Stash: Invest in What You Believe In

Stash is another fantastic app for beginner investors, but it’s a bit different from Acorns. With Stash, you have more control over where your money goes. The app offers a wide variety of investments, including individual stocks and ETFs (Exchange-Traded Funds), so you can build a portfolio that reflects your personal interests and values.

What makes Stash unique is its educational approach. The app provides tons of resources and tips to help you learn about investing as you go. So, if you’re interested in understanding more about the stock market and how it works or choosing the stock you want, Stash could be a great fit for you.

Another cool feature of Stash is the “Auto-Stash” option, which lets you automate your investments on a schedule that works for you. You can also start with just $5, and Stash offers fractional shares, so you can invest in big-name companies even if you don’t have a ton of cash on hand.

How to Get Started with Stash:

Sign Up: Download the Stash app and create an account.
Choose Your Investments: Browse through the available stocks and ETFs, and pick the ones you’re interested in.
Set Up Auto-Stash: If you want to automate your investments, choose how much you want to invest and how often.
Start Learning: Take advantage of Stash’s educational resources to learn more about investing and grow your financial knowledge.

Ready for More? Check Out These Advanced Options

If you’re feeling confident and want to take your investing to the next level, there are some more advanced platforms you might want to consider. These are a bit more complex than Acorns and Stash but offer more control and potentially lower fees for those who are ready to get serious about investing.

Vanguard

Vanguard is a favorite among seasoned investors because of its low-cost index funds and ETFs. It’s not as beginner-friendly as Acorns or Stash, but if you’re ready to dive deeper into investing, Vanguard offers a wide range of investment options and tools to help you build a diversified portfolio. Vanguard is especially popular for retirement accounts like IRAs and 401(k)s, where keeping fees low is crucial.

Fidelity

Fidelity is another top choice for more advanced investors. Like Vanguard, Fidelity offers a wide variety of investment options, including stocks, bonds, mutual funds, and ETFs. It’s known for its strong research tools and excellent customer service. Fidelity also has some beginner-friendly options, but it really shines for those who want to take a more hands-on approach to managing their investments.

The Risks of Investing

Now that you’re excited about why you should start investing in your 20s, let’s talk about something super important: the risks. Investing is not a guaranteed way to make money. The value of your investments can go up and down, and there’s always the possibility of losing money. That’s why it’s crucial to invest wisely and never put in more money than you can afford to lose.

But here’s the thing—while investing does come with risks, it’s also one of the best ways to build wealth over time, especially if you start early and stay consistent. The key is to think long-term, stay informed, and not get too worried about short-term market fluctuations.

Wrapping It Up: Take Control of Your Financial Future

So, there you have it—a quick overview of why you should start investing in your 20s, the risks involved, and how you can get started using apps like Acorns and Stash. Investing doesn’t have to be complicated or scary, and you definitely don’t need to wait until you have a lot of money to start. The earlier you begin, the better your chances of building a solid financial future.

Whether you choose a beginner-friendly app like Acorns or Stash or decide to explore more advanced options like Vanguard and Fidelity, the important thing is to get started. Investing is one of the best ways to grow your wealth over time, and the sooner you begin, the better off you’ll be.

Ready to take the plunge? Choose an app that fits your needs, sign up, and start your investment journey today. Your future self will thank you!

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