How To Make Smart Investments When You Are In Your Twenties

It’s never too early to be investing. Many people in their twenties don’t think much about it. Or, they just don’t have much money to put towards investing when you are paying for a car loan or student loans. 

And, when they do have money, they generally don’t really know how to get started. Investing can be intimidating and the fear of making a bad move or tying up your money can be daunting.

In this article, I will go over several ways that you can easily do some investing when you’re young and even when you don’t have much extra money.


1 – Peer to peer lending

When you don’t have a lot of money to invest, then try ledning what you do have. You may not have much but there is somebody looking to borrow small amounts. You can use peer to peer lending platforms and act as a bank. 

Whatever you can afford to lose is the amount you should go for. Then you can get paired with the right borrower that is going to pay back in the timeframe that is acceptable to you and with the interest that you decide is worth the risk. Higher risk borrowers will pay higher interest so you can make more money.

You can make even more money by using blockchain based P2P lending which is ideal for those in emerging markets that don’t have access to traditional banks. For example buying bitcoin in India and then investing can make interest back from the loan plus any gains in the value of the cryptocurrency as well.

 2 – S&P 500 Index Funds

Slow and steady is a great strategy for those investing on limited funds or that don’t like to take too much risk. The S&P 500 is as steady as they come that has been paying an average of 10% for the last almost 100 years. This is far more than you could ever make by putting savings into certificate of deposits or CD accounts.

Of course, there always risks when it comes to investing. You have to accept that some of the money or maybe even all of it could be lost. But, one of the safest bets are S&P 500 Index Funds.

3 – Use robo advisors

If you are too intimidated by the investing process and just want something that is sort of a “set it and forget it” type of system, then robo advisors are the way to go. You can start out really small and the robo advisor handles the investing.

These days, these mainly are apps that do the work for you. You just make sure that it is funded. This can be when you have some extra money and opt to deposit it to your account or that you have it automatically funded every week or month directly from your bank account so you can make sure it is always building.