Should I invest after high school or college?
Investing is important, and you know it! When you are young, time is on your side. Also, you are energetic and eager to try new things. However, many individuals get scared when it comes to making a decision related to investing, especially during or right after high school/college. Why should you do it? How should you do it?
Completing high school or college is an overwhelming phase in your life. You are filled with excitement and nervousness. Making money is on your mind, but you don’t know how to do it. Also, there are thoughts of advanced studies or getting the first job.
In addition to finding the right job, investing is important. However, it is also a risky thing to try. There are the possibilities of succeeding or losing your money. If you are thinking of investing right after high school/college, here are some thoughts to help you:
Why Invest Right After High School/College
A report by Gallup Poll states that the average investor age is 29 years old. Only around 25% of people think of investments before the age of 25 years old.
The math is simple: When you start investing at a young age, you have more time on your hands, which means more chances of tasting success. When you invest in your 20s, you save for retirement.
Let’s take an example: Assume you are 22 years old. You invest $3,600 per year. If the average annual return is 8%, you will have at least $1 million when you are 62. On the other hand, if you start investing late, like when you are 32, you will have to save at least $8,200 each year to cross the mark of $1 million when you are 62.
The average cost of each year’s savings increases with age, so it is important to start investing early, and there is no time better than after high school/college.
How Much Should You Invest
If you are thinking of starting to invest right after college, a question that comes to mind is: How much should I invest. The simplest answer is: Invest until it hurts. Here, it means you should have some savings, and invest them carefully. The safest way to do this is to save at least $100 more than you are currently saving.
What to Invest In
This is one of the hardest questions to answer, especially when you are young and don’t know where to start. It is a situation that scares most people.
Here, the solution is: Create a diversified portfolio. Explore multiple options and collect detailed information on them. Also, analyze their risks and benefits. Invest when you are sure that the decision is right for you.
Now that you have found an answer to the ‘why and how I should start investing right after high school or college, explore your options and make the right decision. All the best!
See related article: When should I buy a house