8 (easy) Investments To Do In Your 20s You Don’t Want To Miss Out

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Hey, you, my beautiful awesome readers! Today I want to share different ways to invest in your 20s. Cause let’s be honest – this is not the most fun thing to think about when you’re just starting to earn your own money.

There’s a lot of advantage though when you get to invest at a young age. Even though I’ve started managing my money earlier than many of my peers, I still wish I had done it a lotttt lot earlier.

Cause you get to put in more hours on that craft, you’re able to plant the seeds and reap the benefits earlier, and it gives you a sense of comfort knowing that you have some type of passive income while you’re still working your 9-5 job.

When I was still working, I realized that my money is just staying still in my account. It’s just there and it’s not growing. And I know for a fact, that that’s not what the rich and wealthy do.

So I decided to learn more about where and what to invest in my 20s, even if it’s just an extra $50/month.

I’ve done some research myself and finally acted on the idea of investing! There are a lot of other ways you can do too, but these are the ones that kinda stuck to me. 🙂

If you’re looking for an investment to put your money in this year, then this article might just be the answer!

Read More From Me:
How To Buy A House In Your 20s That Will Give You Amazing Rental Income
How Rich Are You? Here’s An Easy Way For You To Benchmark

1. Invest In A Money Market Account

A money market account (MMA) is a type of deposit account that yields a higher interest rate than normal bank accounts. Even better than your normal savings account.

Since it gives a higher interest rate, they require a higher minimum balance. Unlike a typical deposit account, a money market account has more restrictions on withdrawals.

Other than having a higher interest rate, some money market accounts give out insurance protections as well. You can ask your bank if they offer such account. And if they do, make you sure you’ve looked into it and decide whether it’s wise for you to open one. 

When I was thinking of investing in an emergency fund, I opened this type of account.

It’s perfect for an emergency fund because of its restrictions on withdrawals. I’m forced to use my savings unless there’s really an emergency that I need to withdraw from my MMA.

If you haven’t opened up one yet, I recommend checking out CIT Bank. They offer one of the most competitive interest rates out there, and it doesn’t require a high opening amount. AND most importantly, it’s FDIC insured. Click here to check out Money Market Account from CIT Bank.

2. Invest In The Stock Market

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The US Stock Market has been going up for about 10 years ever since its low in March 2009. But with the recent pandemic that’s been going on, almost all stock markets around the world have gone down due to people panic selling. Why are people panic selling? It’s because they have this fear of economy going into a recession.

Obviously, the majority of the listed companies in the stock market have gone down in price as well. 

Some bluechip companies (companies that are established and financially strong) are way below their highest price. The likes of JP Morgan, AT&T, Walt Disney, and Coca-Cola have gone down to at least 20% from their peak.

This simply means that you can buy those companies at a discounted price.

Although we’re not sure if they’ll go down some more if we’re looking to invest for a long time, these short term moves are considered distractions.

From what I’ve read in The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition), if you’ve looked at the long term prospects of a business, then the mood swings of the market shouldn’t deter you!

So How Exactly To Start Investing?

If you’re new, you probably (like me) don’t really know on where to start looking. But all is good, my friend. It’s not that hard anymore with many online exchange platforms that you can register to to start investing.

My favorite way to start investing today, even with my spare change is with Acorns. It’s easy to set up, and you can start investing even today. There are no minimums or trade fees – which is aweeesome!

BUT, before you start doing any kind of investment, READ my guide on what you need to know before making any financial decision (especially investment) here.

3. Invest In A Mutual Fund

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This is probably the most famous one among young adults and I’m sure you might have read this term already but (maybe) don’t know exactly what it is.

A mutual fund is like a bowl that’s filled with money and that money came from different investors like you and me. This fund is invested in different stocks, bonds, and many other assets. 

Some mutual funds invest in stocks but they diversify by putting money on different sectors. Those sectors can be technology, pharmaceuticals, agriculture, banks, industrials, energy, consumer staples, and many more. 

Mutual funds are appealing to many investors because they don’t focus on only one stock. Investors get a piece of everything by placing their money in this type of investment vehicle.

And because of diversification, it becomes a less risky investment. 

An important factor that you should consider when choosing a mutual fund (more importantly on managed Unit Trust) would be its different fees.

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You, Must, Pay, Attention, To, The, Fees

Two general fees that investors usually look into would be:

Operating Fees – These fees go to the fund manager, marketing of the fund, paying brokers, and the likes.

Why do they have such fees? Well, the operating fees are paying the fund to continuously go up and running. They pay the fund manager to outperform any benchmark that’s compared to the fund. And the other expense covers the legalities and other administrative costs.

Shareholder Fees – These are fees that you pay upon entering or exiting a fund. This type of fee also covers the cost when you sell your shares of the fund before a certain time period.

Two common shareholder fees would be:
  • Front-End Sales Loads – This is the fee you pay when you purchase fund shares.

The fee goes to the sales agent or whoever got you to purchase the fund. That fee will serve as their compensation.

For example, you invest $100,000 and the fund has a front-end load of 5%. 5% of $100,000 is $5,000. That $5,000 goes to the agent who sold you the fund. And your initial investment will now be $95,000.

  • Back-End Sales Loads – This is the fee you pay when you redeem fund shares.

But some funds don’t charge any back-end fees when the investor holds any withdrawal within the agreed certain period.

It’s important to note that there are mutual funds that have no front and back end sales load. They are called a “no-load fund”. 

This type of mutual fund doesn’t charge any fees when you purchase or sell your shares of the fund. However, some funds might be a no-load fund but they still have those redemption fees. But this time, the fees go back to the fund itself.

All of these fees can be seen in the mutual fund’s prospectus!

So if you’re not sure about some other fees listed there, make sure to ask someone who’s knowledgeable with those terms. Make sure you have a good agent that can be super transparent with you regarding all these fees!

You can also get on with investing in mutual funds with Acorns.

BUT, before you start doing any kind of investment, READ my guide on what you need to know before making any financial decision (especially investment) here.

4. Invest In An Index Fund

By definition, an index acts as an indicator or a measure of something.

Therefore a stock market index can measure the top 30 stocks in the market or the top 500 companies in the stock market.

An index fund follows a certain stock market index. An index fund is also considered as a type of mutual fund. The main difference between the two would be that an index fund is passive in management while a mutual fund is actively managed by a fund manager.

In terms of fees, an index fund will have lesser costs because of passive management, and lesser trades are done in the fund.

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I would personally recommend an index fund that’s coming from the Vanguard group! Not only are they the ones who pioneered the index funds in the US but their index funds have been consistently giving great returns.

If you want to learn more about this type of investment, I suggest reading I Will Teach You to Be Rich, Second Edition: No Guilt. No Excuses. No BS. Just a 6-Week Program That Works! You can read my brief book review in my post, Top 6 Financial Books To Read.

Other than Vanguard, you can also invest in Index Fund on Acorns.

5. Invest In An ETF

An Exchange Traded Fund or an ETF is a bundle of investments (stocks/securities/index) that can be traded daily. 

Basically, think of all the funds that we’ve talked about just now and ETF is basically allowing you to trade those funds, instead of specific stocks 🙂

The price of an ETF increases or decreases daily just like a stock. An ETF can invest in a sector, an index, a commodity, or even bonds.

An investor makes money off an ETF if the fund’s price increases or if it gives out dividends.

For example, if an ETF invests in the technology sector in the stock market, and the sector has been booming for the past years, then the ETF’s price would have increased significantly as well – benefiting those who invested in the fund.

Also, if the ETF has made capital gains or made some earnings, they can give out dividends to its investors. But not every ETF does this, some would just reinvest their earnings back to the fund.

One advantage of ETFs over mutual funds is that there will be less fess to pay.

Since you can buy an ETF via your broker’s account, you will only pay for small commissions and taxes when you buy and sell. You don’t have to pay for a manager’s fee or any type of front or back-load.

A slight advantage of an ETF over an index fund is that an ETF can be traded numerous times while an index fund can be only traded once a day.

But this difference doesn’t really matter if you’re planning to invest in a longer time frame.

However, do take note that sometimes investors can get a bit greedy and have impulses to do multiple trades per day and can end up paying more transactional fees when buying and selling.

So if you’re still kind of confused on which type of investment is for you, you can check out this video for further clarifications:

Again, you can still invest in ETF via Acorns.

BUT, before you start doing any kind of investment, READ my guide on what you need to know before making any financial decision (especially investment) here.

6. Invest In Financial Literacy

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Great financial books will tell you to have a strong foundation in financial literacy. Having this kind of knowledge is the first step to financial freedom!

This subject teaches us how to be more equipped with managing our money.

It can introduce us to different money concepts and ideas. And these concepts will teach us how to save more money and how to earn more of it.

When I decided to be serious with my finances, I invested in financial books. Those books allowed me to get tips and concepts from different authors and personalities in the field.

Remember to build a solid foundation of financial literacy first and start building your wealth from there!

Just remember that you cannot get rich and have financial freedom when you don’t know how money works. So the least you can do right now is to start putting more energy into being financial literate

Read My Recommended Books:
10 Best Personal Finance Books For Young Adults
Top 10 Best Investing Books For Beginners To Read This 2020
Top 6 Financial Books To Read: Must Read For Beginners
10 Best Stock Trading Books For Beginners To Start Reading This 2020

7. Invest In Your Side Hustle

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Investing doesn’t just involve money but it also involves time. There a lot of people who were laid off from their work because of this pandemic but are still surviving because of their side hustle.

A side hustle can be a form of a business or a second job. 

With today’s technology and with the help of the internet, you can literally start a business on the side without cashing out a big amount of money. Some businesses don’t even need time for it to get up and running!

I’ve started different side hustles way back in college, I needed to make that extra moolah!

Read: 7 (Proven) Ways On How To Make Money On The Side In College

I went from being a makeup artist, to a mystery shopper and to being an Uber driver! Yep, I had time to do all those things back then. In these current times, you don’t even have to go out and work. There are several jobs waiting for you online! 

One of the perks of having an online job will reduce your spending on transportation and eating outside. You can now work in the comfort of your own home!

If you’re planning on getting an online job, you need to read this first: How To Get Clients On Upwork Fast

That’s where I wrote on how to make a profile that will make you stand out from the crowd! Plus, I added some strategies on how you can land a job in just a few days.

If you’re not planning to get a second job and just looking for ways to make some money at home, you can check out my post: Ways To Make Money From Home In 2020 – Tried & Tested

I’ve written down several ways on how to make money by just staying in your home. Those different money making strategies are proven and tested by me! So, go check them out to get that extra money!

Read: All Make Money Ideas

8. Invest In Yourself

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One of the best investments that we can do while we’re still young is to invest in ourselves!

If you want to advance in your current career, then invest in learning more about it. Spend time acquiring skills that make you better and get some certifications online.

If you want to take on a new path in your professional life, then invest in learning new skills. And again, you can get some certifications to make your new learned skills legit.

When I was already planning to quit my corporate job, I took some time to learn the thing that I’ll be doing next. And that’s blogging!

I started by not having any idea on how to make a website and how to monetize a blog. In order to thrive in this space, I needed to invest in some courses. I needed to learn more. So I went with Wealthy Affiliate. If you want to know more, you can read my post about them here.

✨Invest in learning a new skill, invest in the things you like, invest in experiences, invest in your passions!✨

More From Me:
10 Best Personal Finance Courses To Make Better Financial Decisions
12 Best Productivity Courses To Help You Get Things Done
12 Best Blogging Courses For Beginners (Free & Paid) In 2020
10 Best Personal Finance Board Games To Give This Holiday Season

So, What To Invest In Your 20s?

You might not know what investment to do first after reading this, all you need to do is pick one and start from there.

Starting is always the hardest part. You need to learn about different things if you’re new to a certain space. But once you’ve got the ball rolling, and you start to understand the concepts, it gets easier from there.

So, which of these investments have you already tried? Share them below so other readers can see! 🙂

If you find the post helpful, please share it around!

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