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10 Investment Tips for 20-Somethings

Updated: Mar 17, 2021

Quick and easy tips for millennials to invest money and get results

Icon of a piggy bank

Investing…isn’t that the thing your parents do? With stocks and bonds and whatever-else-they’re-called? Yes, you’ve almost got it! Now it’s your turn! It’s easy to start your investment journey now—your future self will thank you.

We’ve rounded up 10 investing tips for millennials to help you navigate these new waters. Time to put on your grown-up pants!

1. Know your goals.

These can be both short- and long-term. Besides generating more cash (duh!), how will you use your investment cash? How will this money benefit you financially, both in the near-term future and longer down the road?

2. Consider your timeframe.

Sometimes it’s a long game. Depending on how much time you give your investments to grow will heavily impact their return, as well as which types of investments we recommend you make. 

3. Allocate your assets.

Stocks? Bonds? Short-term investments? Oh my! These are your asset allocations. Sure, the name might sound fancy, but it’s really just how you divvy up your cash when investing. Some of your best options for investing as a 20-something are stocks, bonds and short-term investments.

  • Stocks usually have higher returns that can help you meet your goals. Remember that the stock market is like a roller coaster at times—it has its ups and downs, but it has historically trended upward. Hang in there!

  • Bonds are a way of getting a more steady return back on your investment by paying interest over a certain period of time. You can also play a game of risk and return depending on which type of bond you decide to invest in—we’ll touch on risk in a minute.

  • Short-term investments are usually only a small amount of your overall investment portfolio. Even though they only give a small return rate, they can round out your investment mix, and they tend to stay stable.

4. Invest a little at a time.

A simple tip to remember: a little + a little + a little more = a lot! Any amount that you’re able to put toward your investments, no matter how big or how small, can help.

5. Use the round-up rule.

Treating yourself to taco tuesday with margs? Finally letting yourself splurge on the new kicks you’ve wanted (and deserve!)? Round up your receipt on these “pleasure purchases” and put the extra cash toward your investments.

6. Realize how much risk you can afford.

Eek! We usually discourage getting into risky business, but this type of risk can be good—if done correctly. Different types of investments can have different amounts of associated risk; for example, stocks usually come with higher risk, short-term investments are typically low-risk, and bonds can be on either end of the risk spectrum. Not sure how much risk you can tolerate? Try the Risk Tolerance Calculator in the Pocketnest app. (Haven't downloaded the app? Go for it, it's free!)

7. Mix up your investments.

Ah, diversification. Any financial investment professional will tell you to invest your cash in different types of investment funds to see the greatest return. The ingredients (read: your different investments) that make up your recipe (read: your investment portfolio) are up to you. Just keep an eye on how much money you’re putting toward low versus high risk investments.

8. Ask your institution if they offer a robo advisor.

Oh, how we love the golden age of technology! Are you scratching your head when trying to uncover which investments are right for you? A robo advisor can help. They cost less and require zero investing experience. Check with your financial institution to see if they offer a robo advisor or an algorithmic trading platform.

9. Enroll in your employer’s retirement plan.

Although you may be facing student loan debt at the current moment, and retirement feels like something far off in the distance, enrolling in a retirement plan is something you should definitely consider. No 401(k) with your current employer? You still have options!

10. Keep track of your cash.

Especially now, it’s incredibly important to have a budget and know where the next dollar needs to go.

Now that you have a better idea of how to navigate your investments, download the Pocketnest app to get all of your finances in order.

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