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Why you need to start investing in your 20s

In my 20s, I have the time of my life!

Shopping spree is fun!

20s. A magical number of life. You have just completed your degree and are now staying at home enjoying yourself. You convince yourself not to rush getting a dull corporate job, as you are still young and want to have fun. You feel that you have all the time in the world, and you can do whatever you like. Party all night, keeping yourself up to date with the newest electronic gadgets and fashion clothing. What a lovely stage of life.
But as the clock ticks, it will just be a blink of eye before you discover you are in your late 20s, realizing you have yet to pay off study loan, car loan and more pathetically, there is only RM3000 in your bank account. To make things worse, your another half drop you a hint to get marry in 2-year time (which would minimally cost you another RM40000). This is the moment when you look back and regret on your lifestyle.

Yes, being in 20s is amazing. You are young, energetic and vibrant. You have the energy to do anything you want. Be it for enjoying yourself, or to further improve yourself. Unknown to many, this is the crossroad of our life to a more financially healthy future. Missing this critical junction will cost you a long time to get back on track.


Nowadays, many 20s are trapped in living paycheck by paycheck. They spend as much as they earn. Even worse, some unconsciously swipe their credit card more than they earned, building up the debt amount in their early 20s. And this is when they turned into a slave of credit card.

20s unconsciously swipe their credit card more than they earned, building up the debt amount in their early 20s. And this is when they turned into a slave of credit card.

By investing in your 20s, a man develops good habit to set aside a pre-fixed amount consistently every month. Not only he avoids himself from getting into a bad lifestyle of living paycheck by paycheck, but he is saving money and increasing net worth day by day.
This is the time when you have all the money to yourself. Occasionally, you bring your other half to dine in at a fancy restaurant and spend a little more. But it’s totally fine. Unlike your 30s, you do not have commitment to pay every month – car loan, house loan, children’s education fee, and monthly household expenditure to support the family.
Hence, this is the perfect time for you to fork out some money every month and start investing in your 20s. If you are giving excuses not to do it now, trust me, you will have more strong reasons not to invest in your 30s.
You might wonder what the hack am I trying to convey here? What about saving money into bank and get interest? That guarantees I am not losing my money, right?

True, not losing money physically. But not the value of money. The concept you must understand here is – TIME VALUE OF MONEY. Are you aware that a Wanton Mee you eat today cost you RM5, but it is only priced at RM2.80 5 years back then?

This actually shows that the value of our money is depreciating due to inflation. RM100 that you have today will never be the same RM100 you have in the next 5 years. Since 1973, the annual inflation rate of Malaysia is averaged at 3.65%. In other words, any item price will double in every 20 years.

Malaysia inflation rate is averaged at 3.65 at 2016 (from 1973).

Saving your money into bank could earn you some interest. But a saving account interest is not even up to 3%, while fixed deposit might only pay you up to 3.5%. Therefore, by not investing in your 20s, you are practically losing money.
Being young is an asset. I never defy this.
As Liz Weston stated on MSN Money
“Someone who puts $4,000 a year into retirement accounts starting at 22 can have $1 million by age 62, assuming 8% average annual returns. Wait 10 years to start contributing, and you’d have to put in more than twice as much – $8,800 a year – to reach the same goal.”

1 million dollar goal, start investing now. What age should I have 1 million ringgit? How investing could help you to get to 1 million ringgit?

The earlier you invest, the more you will have in future. This is the magic of compounding effect. Start investing in your 20s, and get ready to be surprised how far ahead you are from your peers.
Nothing in this world guarantees you 100% profit gaining but not money losing. From time to time, stock market crashes and that is when majority lose money. Nevertheless, in the long run, it is statically proven that stock market grows.
The beauty of investing in 20s is that you are young to take in any kind of impact. Even if you fall, you have ample of time to stand up again. You could easily hold long enough to survive a market crash. But this does not apply to a 55-years old uncle that is going to retire soon, as he might need the money to sustain his life and perhaps for medical purpose.
Furthermore, the earlier you invest, the more you would familiarize yourself with the cycle and behavior of stock market. All these experiences mold you into a better investor in your 30s, which exactly is the life stage when stable financial income is needed.

Want to start learning investing? Check out more here.

No capital? Wait. Let us help you to save up capital. More here.

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