6 Tips for Investing in Your 20s


6 mins read April 07, 2021

Starting out in your twenties, you may begin to experience the pressure to attain financial independence. You are determined to make the best of your youth as your financial decisions in this decade could potentially make or mar your future. While seeking independence and trying to find your feet in this fast-paced world, you may find yourself dealing with many expenses. As such, you would need funds to meet your ever-increasing expenses and have enough funds to set some aside for your future.

 In this regard, you may seek a means to generate wealth over time, pushing you to consider investing in stocks, cryptocurrencies, bonds, real estate, and other types of ventures. However, investing can be highly risky and volatile. As such, you should adopt the best strategies to attain the best results to minimise loss and maximise profit.

What is investing?

Investing involves setting funds aside for financial ventures, property, shares, and business ventures with the expectation of generating wealth after a given timeframe. An investor buys assets with the expectation that these assets would increase in value and generate profit over time. The essence of investing rests on buying assets at a low price and selling them at the highest possible price. The profit generated from these sales is your capital gain and can be re-invested to purchase more assets that can later be sold. Investing allows you to generate wealth to meet your current expenses, and it can be left to create a build-up of wealth for your future.

What to invest in during your 20s

Investment isn't limited to a specific age. You can invest in any financial venture as long as it is a profitable prospect. You can invest in stocks or bonds of financial institutions by buying shares from the company. You can also invest in real estate, cryptocurrencies, commercial ventures, and other categories. A good practice is to also invest in yourself by developing good habits and improving on your skillset.

Best investment strategies to adopt in your 20s

There is no better time than now when it comes to getting started with investment. However, investing can be a high-risk initiative, which means you need to keep specific rules or strategies in mind when investing. You can run into losses while investing, but being prepared with the right approach would significantly minimise the possibility of losses. A few techniques you can keep in mind in your long term investment plans include:

1. No time like the present

Carlos Slim, a notable tech and communication investor, says, “Anyone who is not investing now is missing a tremendous opportunity." The best thing about investment is that there is no specific time you have to start. You can start with just about any amount; in fact, Yellow Card allows you to invest in cryptocurrency at extremely low minimums. Don't take too much time waiting to have a significant amount of money to invest. The trick is to get started with investment early.

It is actually advisable that you just invest a small amount of money when you are just getting started with investments. A good practice is to invest in a new business/investment initiative with money you can afford to lose. Do not go taking loans for investments yet when you are just getting started with investment. Investing is a risky initiative, but you need to take calculated risks, beginning with an investment with money you can let go of.

 2. Set up an investment plan

Before you get started with investing, you first need to outline your investment goals. You can map out how much you would like to invest, the frequency at which you would invest, and how much money you wish to contribute to your investments after a specific period. This could be monthly, quarterly, or yearly. However, remember to be flexible in your investment plan. The market is volatile, which may motivate you to invest more in a financial venture or pull out much earlier than intended.

It would be best if you spaced out your investments and give them time to thrive. Your investment is like a plant, and you need to give it time to grow to reap the best harvest. Growth might be stunted at times, but remember that investment is a long-term goal that provides your investment enough time to pick up.

3. Have an emergency fund

The financial venture you wish to invest in may be very lucrative, which may compel you to invest all your savings. However, you need to remember that investments can be highly risky. A misstep might result in you losing all of your money.

Apart from this, you may need some urgent funds, and if your money is locked up in an investment venture, it may be challenging to access these funds. In this regard, you should have a separate savings and investment account.

Your savings represents an emergency fund you can use to settle unexpected expenses. As such, you should cultivate the habit of saving and investing simultaneously. Your savings would help you attend to immediate expenses in a situation that the investment falls out.

4. Embrace volatility

The volatility of investment ventures like cryptocurrency may be scary at first glance. However, rather than feel terrified about the volatility of these investments, think of it as a means to earn more. The value of an item can rapidly rise or fall even in seconds.

5. Diversify your investments

It is said that you shouldn’t put all of your eggs in one basket. In the same way, you need to diversify your investments. Diversifying your investments would help you minimise losses that may arise from investing in one financial venture that fails. For instance, if you are investing in cryptocurrency, you shouldn’t limit yourself to bitcoin, but also consider other altcoins that are gradually increasing in value. You need to ensure that all of your investments are not locked up in one space so that your eggs don’t go breaking all at once. However, while diversifying, ensure that you have rudimentary knowledge about every investment plan you are embarking on.

6. Take your time to research thoroughly

Take time out to read the contracts, exclusions, and inclusions before committing to any investment scheme. There are times you may fall into the trap of hidden charges in your contract, so take time out to research your investment prospects thoroughly. You might even consult a solicitor to help you read over the agreement to ensure everything is in order.

Ensure that all of your investment decisions are based on logic, not emotions. Don’t get lost in the swirl to invest in the trendiest investment ventures so that you don’t fall into unsafe schemes. You need to study properly whatever market you wish to invest in and clear all doubts in your mind.

Rather than rushing into the market, you should ease into it, especially since it is a new sphere. Peter Lynch says, “You get recessions; you have stock market declines. If you don't understand that's going to happen, then you're not ready; you won't do well in the markets.” In this regard, you need to research thoroughly and stay informed to make the best profits.

In conclusion...

It is a great initiative to start investing in your 20s. You have the benefits of starting early, so don’t be in a rush to invest. Ensure that you have the foundational knowledge and let logic and statistics inform your investments. A good thumb rule is to set up a retirement account to save profits from your investments. Investment is a lucrative business initiative, and although it can be very profitable, it can also be highly risky. However, adopting these practices would set you on the straight path to financial freedom.

Disclaimer: This article is meant to provide general guidance and understanding of cryptocurrency and the Blockchain network. It’s not an exhaustive list and should not be taken as financial advice. Yellow Card Academy is not responsible for your investment decisions.

Crypto scoop

Sign up for our weekly newsletter

Stay informed with the latest updates to buy, sell, and store your crypto on the go.


Download the Yellow Card app

Start trading crypto with ease

Get the Yellow Card app to buy, sell, and store your crypto on the go.