Consistently saving and investing is essential to building wealth. This is especially true in your 20s, when you can leverage the power of compounding interest. Savings and investments can help you reach major financial goals, such as retirement, buying a home or funding your education.
Regardless of your financial goals, you can benefit from a consistent savings plan and an investment strategy that aligns with your risk tolerance and time horizon. In addition, it’s often a good idea to work with a professional, such as a financial advisor. SmartAsset’s free tool can match you with vetted financial advisors who serve your area, and you can have a complimentary introductory call to evaluate which advisors may be right for you.
Building Wealth as a Young Investor: Crypto Tips for Gen Z
If you are serious about building wealth, start by establishing a budget. This will help you identify your spending habits and prioritize essential expenses. Then, use your budget as a roadmap to save consistently and invest wisely. For example, setting aside a small amount each paycheck can go a long way in developing the habit of saving.
Building Wealth as a Young Investor: Have a clear picture of your goals, and consider opening investment accounts. Depending on your goals and time horizon, you may want to consider brokerage accounts, robo-advisors, or index funds. Generally, you should focus on growth stocks for long-term investment goals because they can generate significant gains over the long term. However, you also need to weigh the risk versus return to make an informed decision about how much to invest in each asset class.