Introduction
Starting investing in your 20s can be one of the smartest financial decisions you can make. But if you are new or you don’t have money at the spot to invest, then this guide is specially for you. It’s not necessary that you should have a large sum of money to invest____ you just need a right mindset, Knowledge, and a great plan. In today’s article, we’ll show you that how you can start investing in your 20s, even if you don’t have a lot of money.
Why is it important to start investing in your 20s?
The biggest advantage that young investors get is time. Because of compound interest, the money you invest quickly grows exponentially with time. Albert Einstein called compound interest the “eighth wonder of the world” – and it really is.
Suppose you invest $1,000 every month from the age of 22 and get an average return of 12% per year, then by the age of 60 your investment can be more than $20 million. But if you start at the age of 30, you will get only $7.5 million from the same amount. This shows how important it is to start early.
Some common myths that stumps young people:
Before you start investing, it’s important to clear a few misconceptions that disconcert beginners:
- Myth 1: Investing requires a lot of money:
- Truth: Nowadays there are many platforms where you can invest even $100
- Myth 2: Investing is only for those who are experts.
- Fact: Today anyone can learn basic investing through apps and guides.
- Myth 3: Investing is risky and can lead to money loss
- Fact: There is risk, but smart diversification and long term planning reduce the risk considerably.
Step 1: Set your Financial Goals:
Before investing you should decide what you want you invest then Your goals can be something like this:
- Building an emergency fund
- Saving to buy a house or a car
- Planning for your retirement
- Generating a passive income
Clear goals will help you choose the right investment.
Step 2: Create a budget and save regularly.
If you think you are broke, first track your income and expenses for a month. You can use free apps or spreadsheets. See where you are making unnecessary expenses like dining out, subscriptions, or impulse shopping.
Try to save at least 10% of your income for investing, even if the amount is small. Consistency is the key.
Step 3: Set a emergency fund
Before investing, keep 3-6 months of expenses in a liquid savings account. This fund helps in emergencies and prevents early withdrawal of investments.
Step 4: Choose investment options suitable for beginners.
Here are some beginner-friendly investment options that you can start with a small amount:
a) Mutual Funds or SIPs ( Systematic Investment plans )
- You invest a fixed amount every month (starting from ₹500)
- Professional fund managers handle
- diversify risk across stocks and bonds
- Best for Long time growth
b) Stock market ( direct equity )
- If you want more returns and want to learn
- Invest in blue-chip stocks or ETFs
- Buy fractional shares from apps like Zerodha, Grove, Robinhood
c) Public Provident fund (PPF)
- Government backed, saved investment with Tex benefits
- Lock-in period of 15 years, best for long-term
d) Recurring Deposits (RD)
- Low risk and fixed returns
- Good option for short term goals
e) Digital Gold and Sovereign Gold Bonds
- invest in gold with low amount
- To protect against inflation and diversify the portfolio
Step 5: Start with small but start fast
- The biggest mistake beginners make is that they wait for the perfect time or wait for the money.
- Don’t do this. Start with a small amount-even $100 will do. The aim is to develop a habit so that your money grows with time.
Step 6: Use Technology
In 2025 the investing have been easy due to online apps and platforms.
Apps like Grove, Zerodha, Paytm Money offer easy account setup and beginner tutorials.
Robo advisors automatically manage your protfolio based on your risk profile.
Budgeting Apps like Walnut, Moneycontrol help track spending and increase savings.
Step 7: Diversify your Portfolio
- Don’t invest all the money in one place. Invest a little bit in stocks, bonds, gold, real estate funds etc. This reduces the risk and gives steady returns.
Step 8: Educate yourself continuously
- Financial literacy is the best investment you can make. Follow blogs, podcasts, YouTube channels and online courses on personal finance and investing
Step 9: Be Consistent and be Patient
- Investing is a marathon, not a spirit. Markets ups and downs will keep happening, don’t worry. Keep investing consistently and avoid impulsive decisions.
Step 10: Review and adjust your investments ever year
- Check your portfolio at least once a year, re balance it and adjust it according to your goals or the market.
- This will keep your investment plan updated.
Conclusion: There is never any far in starting
- Starting investing in your 20s___ everv if you are broke__ gives a huge advantage in building wealth. Remember, more important than the amount is the habit and smart investing plan.
FAQs
Q1. How much money is needed to start investing?
You can start from $100 per month through SIPs or digital platforms.
Q2. Is investing risky for beginners?
Every investment involves risk, but diversified long term investments reduce the risk.
Q3. If i have a loan, what should i invest?
First repay the high interest quickly, but do not stop investing at all.
One comment
saad
Good