8 Things Every 20 Something Should Invest In

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When I reflect on my 20’s, I have mostly good thoughts. I did a lot of things right. At the same time, I did a lot of things that I would completely change if I could go back in time.

This post will share eight things I feel every 20 something should invest in while they are young. You can say these are also things I wish I did better when I was younger.

Not everything I will share here will be directly finance related. But in so many ways, everything you do in life will relate to money in some way. And good financial habits will also affect other areas of your life too – like your health and relationships. It all works together.

Here are eight important “life things” you need to invest in, in your 20’s

1. Invest in Your very own business

Growing up, there wasn’t a lot of emphasis on starting your own business. It was mostly about doing well in school and getting a good paying job after. Those who bucked that trend and went the self-employment route found themselves ahead of the curve. While self-employment isn’t a guaranteed gig, there was considerably less competition back then – which made it easier to succeed.

Today, it seems like every other person has some sort of side gig going on. The competition is fierce, and the struggle will be real when you begin hustling on the side. But hear me out. It’s like this because there is an opportunity out there to get “more” out of life than a typical day job that you probably don’t even like.

I wholeheartedly believe that self-made wealth is the way to go. It’s the only real way to guarantee your financial success. A business of your own that you call the shots and you reap all the rewards should be your top priority as a young up and comer.

You will likely go through many business ideas and try out a bunch of things as you learn the ropes. That’s all part of the process. What’s important is that you continually learn and make it your mission to build a constant financial income stream through a business that you love. This leads me to my next big tip for 20 something…

2. Invest in your hobbies and passions

There are things you love doing and fuels your soul. For me, traveling around the world and gaining new experiences may be the biggest one. And because of that, I’ve made it my mission to do as much of that as possible.

To do that, I created an online business (a blog) where I can make money and work from anywhere in the world.

Your passions shouldn’t be something you “do” only on your free time or when you get home from work. It should be something you live and breathe every single minute of your life. That’s a life worth building up to and living full time.

You don’t know how much time you have in this life. You must make sure you spend as much of your precious time doing things you truly love. That could be basketball, photography, singing, dancing, building websites, or eating food.

You’ll want to think critically about how you can turn what fuels your soul into a business that profits. Virtually every hobby and passion can be turned into a business.

I feel building an online business is the ultimate way to make money from your passions. Not all business work well online, but most do.

You want to work on this when you’re young and have more “time.” When you get older, you’ll have more responsibilities and life things will take more of a toll on you. A strong business can takes years to build. The learning curve and mistakes you’ll make need to be overcome. This all takes time. And the time to get started is now.

3. Invest In Your credit and credit score

I think most people know that having a good credit score is “useful,” but that’s as far as it probably goes for most 20 somethings. I see a lot of people making financial decisions to go into debt with little regard to what that truly means for their future.

I had a friend share a Facebook post about his new home purchase. Everyone congratulated him and gave him props for moving on up. A year later, he defaulted in his loan and was no longer a homeowner. It was not really a big deal to him. But it really IS a big deal. It will take a long time to recover from a disaster like this.

Here’s what you need to know about your credit score (in a nutshell):

Your credit score will determine how low your interest rate will be whenever you take out a loan. For example, when you get a car loan or a home loan. You want the best credit score you can have at all times because you never know when you need a loan.

The lower the interest rate you can get, the less “fees” you will pay in interest. These interest costs can be a few hundred dollars or tens of thousands of dollars if we’re talking a big loan with poor credit.

If you’re young, you can start building credit with my favorite credit building tool – credit cards. Get a few, use them every month, and pay them off every month in full. I recommend setting up automatic bank withdrawals to pay your credit cards so you will never “forget to pay.” All you’ll need to focus on is using them at least once a month. This way, you’ll have a few credit cards building history every month. This will give you a nice credit foundation for when you’re ready to get personal loans, car loans, mortgages, and even business loans.

4. Invest In Your health & your family

Two things I neglected to take care of in my 20’s was my health and my family. It’s not that I didn’t care for these things, but they were things I thought would just “last.” I could put whatever I want in my body and not feel any real consequences. I could fight with my family, and it would be no big deal because we all love each other.

But these things take their toll on you over time. When you get to your 30 – 40 something, you’re going to see and feel all your poor health choices. Family dynamics and people change too – and good relationships don’t last forever.

In my mind, the most critical thing in the entire world is your health. Second is your relationships (family). The third is money. Because not even you will care how much money you have if you can barely get out of bed and you’re all alone.

Poor health has significant financial consequences too. If you’re too sick to work, too much back pain to sit down, too impaired in mind to think, you are not going to build a successful business that lasts. You may get by doing a simple job to make ends meet – but who wants that kind of life. Your life will revolve around the ever “reliable” government support.

And in terms of relationships, you need to work very hard at being someone people love and respect and want to work with. You need great relationships to get what you want in life. Nobody does anything significant all by themselves. Life revolves around people to people interaction. Business opportunities arise because someone likes who you are. Life is just infinitely easier when you are someone people want to be around.

5. A frugal lifestyle

A lot of people feel like they have a lot of time when they’re young. I get that. I felt that way too. But you’ll never hear someone in their late 30’s say “wow, I’ve just had so much time in life that I’ve done everything I’ve always wanted to do.” They’ll tell you the exact opposite. They tell you not to waste your time.

Don’t get me wrong. You need to live life and enjoy the privileges of being young. Yolo when you got to yolo, you know? But keep your eye on the prize of getting ahead in life.

A lifestyle I highly recommend you take on is a frugal one. What does frugal mean? It means spending money consciously. Putting your dollars towards the things you truly need and that’s it. Some people say it’s the same as being “cheap,” but not really, because cheap means skimping and cutting costs no matter what. Frugal is more about allocating your dollars effectively towards the things you get the most value from – and that could be a luxury cruise around Europe.

Why be frugal? It’s simple. It saves you money.

Frugality will teach you how to spend money more wisely. You’ll think carefully before any dollars leave your wallet. You’ll think about how to get more for every dollar you spend. You’ll learn how to cook foods that taste just as good as expensive dinners. And it will help you tremendously in staying out of debt.

Hey, when you’ve got a lot of money flowing in from your successful business, indulge when you want to indulge. But if you’re a typical person in your 20’s, you’re not in a position to be racking up debt for frivolous things like buy rounds of drink to impress girls every weekend.

6. Common investment vehicles like stocks, bonds, and mutual funds

If you want to get rich, you’re going to need to learn how to invest your money. Because if you’re doing things mostly right, you’re going to have it – perhaps a lot of it.

You’re going to need to figure out how best to make your money grow. It could be in real estate or other businesses. But you’ll still need to know at least the basics of investing in conventional vehicles like stocks and mutual funds. You’ll likely want to put some of your money into these financial vehicles too.

As a young person, you may not have a lot of money to invest. I recommend investing as early as you can with whatever money you can. Firstly, it will be a learning experience anyway. But mostly because of money compounds. And as long as you don’t completely screw it up, you will have the financial security that most people don’t have in old age.

7. Invest In Traveling as much as you can

“Traveling is the only thing you buy that makes you richer.” Heard of this quote? I agree with it. I feel if there is one thing you want to get a little frivolous with your money on, that should be traveling.

You could blow $10k on a trip around Europe but come back with experiences, stories, memories, and learning that will stick with you for a lifetime. These things will shape your outlook that will reflect in your relationships, business decisions, and general mindset.

Your 20’s is the best time to travel. You have the least amount of responsibilities, yet you are “adult” enough to do whatever you want.

I do recommend you keep it reasonable and lean towards the budget backpacking route and also visit affordable countries. But go wherever it makes you the most excited. After having traveled extensively in my 20’s, I will attest to how enriching it has been. My mind is so wide open, and I have learned so much about myself and what I want out of life. And you can bet this has completely shaped how I carry myself and how I run my business.

8. Invest In College education

We all know going to college can help you tremendously in life. And though student loans can be a huge financial burden, and college seems to be less and less important as more people pursue the self-employment route, college has a major benefit that’s often overlooked.

College is where you get to meet a lot of new people and experience a lot of things that matter. The social aspect of college is irreplaceable. Whether it’s working in group projects, making new friends in class, or participating in team sports, all of these things come together and matter later in life.

To make it in today’s business world or the workforce, you need social skills. You need to be able to work with other people. You need to solve people-related problems. You need to “get along” and “be a boss,” and need to understand when the right time for each one is. College teaches you these things in abundance.

College will give you a piece of paper with your name on it that will help you get a job. That’s the main reason we go to school. But don’t forget all the social skills you will build. That, to me, is the essential part of going to college.

Just make sure you go to a school you can actually afford, considering the ROI of your degree before you invest in it. Keep your student loans reasonable, and think hard about working while you’re in school.

Author Bio: Jason blogs at Mint Habits – a lifestyle blog with a focus on personal finance. He mostly talks about the money-making side of finance. If that’s the type of content you are seeking, make sure to check out his blog.