Age is not just a number when it comes to investing, so how’s that gonna help when it comes to ownership investment strategies for young adults?
Being young is clearly a top advantage if you’re looking for ways to build up wealth. Of course, anyone can start investing at any age, but when it comes to financial money management, it’s better to start sooner rather than later.
There are certain aspects of investing one has to learn before jumping head first. Investment advice for young adults is designed to help the later gain a better understanding of what investing is all about and why it’s important to start as early as possible.
Types of investments
Understanding the difference between an investment and a purchase is really important!
A purchase is, literally, something you buy. A car is a purchase. Many think of cars as investments, but the truth in the value of a car actually decreases in time. Except if you buy it, restore it and sell it for profit.
Which brings us to what an investment is.
An investment is a type of purchase that should generate you money in return. If a purchase depreciates, it’s not an investment.
To make things clearer, investments can be categorized. There are long term investments and short term investments. There’s ownership investing and lendership investing. Or, to break investments down into even more categories, there are bank product investments, stocks, annuities, commodity futures and so on.
Remember the car a few paragraphs earlier? Well, if it will generate you a nice profit after a while, then you can consider it an ownership investment!
Ownership investments are possessions acquired with money that will generate revenue and profits.
This type of investments are considered to be the most profitable! That being said, they’re also among the ones considered to be the most risky. However, if you learn how to calculate certain risks, you should be able to start building wealth real soon.
Top 3 ownership investment strategies
for young adults
Many people build their wealth by investing in real estate.
Buying property (houses, apartments, other types of property) is a very smart way to invest your money! Owning real estate can bring in a serious profit if you know how to manage your assets.
Becoming a landlord might seem difficult at first, because you’ll have to deal with the legal issues of renting out a property, you’d have to take care of maintenance costs, satisfy your tenants’ needs. But once you get the hang of it, you can start managing your real estate ownership as a small business.
Alternatively, you could buy a property, restore it then sell it for profit! Of course, this requires you to invest some time into it as well, but if you see reselling properties as a business model you can handle, you could start building your wealth as soon as you sell your first restored house!
Young adults have a clear advantage here. The sooner you start, the sooner you’ll make a profit and reinvest it! So, if you have the financial means or if you’ve inherited a house or a big chunk of money recently, consider investing in real estate.
Entering the stock market can be scary for young investors, but this type of ownership investment could pay off big time in the long run!
Buying stock means you’re literally buying part of a company. Since you own part of a company, you’re entitled to part of its profits! Whether you get paid in dividends when the company does well, or earn money by selling your stocks for a profit, you’re definitely reaping the benefits of some companies’ success.
While investing in stocks isn’t risk free, if you play your cards right, you could easily see your money grow!
Stocks are usually taboo for beginners. The “buy-sell” method looks scary from the outside, but you could start small. Learn a few basic principles of investing in stocks first, then slowly apply what you learn as you move forward.
The sooner you start, the better. If you can grasp the concept of stock investing in your 20s, by the time you “grow up”, you could already have a nice financial nest egg to rely on!
Owning a business
You might think owning a business isn’t like owning real estate or stocks, but you’d be wrong!
Owning your own business means investing your own time and money to make it grow. Once your business starts making a profit, you’ll be proud of your ownership investment strategy!
Of course, not all entrepreneurs become filthy rich, but if you manage to build a profitable business and smart manage your money, you’re already wealthier than most people who are still struggling with debt and low incomes!
Once again, being young is very advantageous! The earlier you start thinking about entrepreneurship, the sooner you could reap the financial rewards!
Risky or not, ownership investments are proof that if you start investing at an early age, you will start building your wealth sooner than expected!
Give at least one of these 3 ownership investment strategies for young adults a try and you could once day become financially independent and maybe even retire early.
What’s your favorite ownership investment strategy? Are you already seeing results?
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