If you don’t play you can’t win. That is true for investing as well as a number of life’s endeavors. As a young adult, many of my peers are not playing in the market; they have no “skin in the game”. This is troublesome because when you are young it is the best time to be investing in the market.
Everyone realizes investing in stocks, bonds or other unsecured investments exposes you to varying degrees of risk. Now, would you rather expose yourself to this risk when you have 30 or more years of employment ahead of you or when you have 5? The more years you have the more time you have to recover from any adverse market swings. Youth has its benefits when investing.
I’ve said it before, but you do not need a lot of money to start investing. One of the beautiful things about online brokers is that they are not going after the high net worth investor. They’re going after all investors from small to large. If you have $500 then you have enough to start.
If you are starting for the first time, ease your way into things. When I first started investing in 1999 I bought three stocks. Assuming your starting small, I would encourage you to think about what you enjoy using or consuming. Is the company publicly traded? If yes, maybe you should make an investment in the company’s stock?
I find that when people invest in companies they know about they typically understand what the company has been and is doing. It also provides a base upon which to build your understanding regarding the company and stock market specifics. It helps to have a reference point that you’re already oriented with when starting out.
The bottom line is that being a young investor presents a number of advantages. Time is on your side. You have the time to learn, to make mistakes, and to slowly build your portfolio. Such a situation does not exist for all investors. Take advantage of the opportunity.