{"id":487865,"date":"2023-05-12T15:55:08","date_gmt":"2023-05-12T14:55:08","guid":{"rendered":"https:\/\/www.finder.com\/uk\/?p=487865"},"modified":"2026-02-10T14:27:54","modified_gmt":"2026-02-10T14:27:54","slug":"invest-in-your-20s-and-30s","status":"publish","type":"post","link":"https:\/\/www.finder.com\/uk\/share-trading\/share-trading-guides\/beginners\/invest-in-your-20s-and-30s","title":{"rendered":"How to invest in your 20s and 30s"},"content":{"rendered":"

There are some things where it can pay to be quick off the mark. The queue for Wimbledon, Glastonbury tickets, paying a parking fine \u2013 and investing. You might think of the latter as the remit of the middle-aged and better-off. But the reality is that starting investing early, even if it means starting small, can reap dividends<\/a>. Figuratively and sometimes literally.<\/p>

At what age can I start investing?<\/h3>

The age at which you can legally hold stocks and shares in your own name is 18 in the UK. Before this age, the only way it\u2019s possible to dip your toes into the investing ocean is if your parents take out a junior stocks and shares ISA<\/a> (or JISA) on your behalf. From age 16, while your parents still technically hold the investments, you are legally allowed to manage the ISA and make decisions on how and where the money is invested.<\/p>

But, while you can invest from the age of 18, many people don\u2019t think about getting started until later in life.<\/p>

Should I start investing in my 20s and 30s?<\/h3>

The earlier in life you start investing, the longer those early investments have to grow and help you achieve your goals. Plus, a longer investment timeframe means that you can afford to take more risk with what you invest in, as your investments should have time to recover if they take a disappointing dip. And, while there are no guarantees, with more risk comes the potential for more reward.<\/p>

So, there\u2019s a strong argument for starting investing in your 20s or 30s rather than waiting until you hit your 40s or 50s. Though, as always when it comes to money matters, you\u2019ll need to think whether investing is the right approach for your financial circumstances and your ultimate goals.<\/p>

Should I prioritise saving over investing in my 20s and 30s?<\/h3>

It doesn\u2019t have to be either\/or. Cash savings<\/a> are typically a more flexible financial resource. With an easy-access savings account, for example, you can get your hands on the money whenever you want without any risk to your capital. With investments, on the other hand, the value may fall as well as rise. You don\u2019t want to risk having to withdraw your funds at a low point. So we advocate building up a reasonable emergency cash savings buffer \u2013 enough to cover a few months of essential outgoings in case of disaster.<\/p>

But once that savings buffer is in place, it\u2019s up to you whether you want to prioritise saving or investing any additional money. We run through a few of the things to consider a bit further down.<\/p>

Should I pay off debt before I start investing?<\/h3>

It depends on the nature of the debt, including whether keeping the debt would end up costing you more than you could earn through investing.<\/p>

If your debt is affordable and carefully managed \u2013 a low-interest loan that you\u2019re paying off in agreed instalments, for example \u2013 then holding back from investing in favour of paying the loan off early may not be worth it. However, if you have a lot of expensive debt, such as credit card borrowing, high-interest loans, or an unauthorised overdraft, chances are that this will be costing you more than you could earn by investing. So it\u2019s probably best to pay off these types of debt first.<\/p>

What should I consider before I start investing?<\/h3>

So you\u2019ve paid off any expensive debt and built yourself a cash savings buffer. You\u2019ve got some money burning a hole in your pocket that you\u2019re keen to do something sensible with before you\u2019re tempted to fritter it away.<\/p>

Investing it could be a good option, offering you the potential for higher returns than putting your money into savings. But there are a few questions you should ask yourself before jumping in feet-first.<\/p>

  1. What are you investing for, and when?<\/strong> While some types of investment are more volatile than others, no investment is completely risk-free. This means that the value of your initial investment can go down as well as up. Don\u2019t be put off by this. Over time, there are usually more ups than downs. But it does mean that time is crucial. Experts recommend that you should keep your money invested for at least 5 years, and ideally more. So if you\u2019re saving for a big holiday in a couple of years\u2019 time, then cash savings might be best. If, on the other hand, you\u2019re saving up a deposit to buy a house with a 5+ year timeframe, then investing could be a good option.<\/li>
  2. Are you already paying into a pension? <\/strong>When you\u2019re in your 20s or 30s, the idea of retirement may seem light years away. But if you want to enjoy your golden years (and who doesn\u2019t?), then starting saving for them early could make a big difference. You may, of course, be ahead of the game and have started paying into a pension the minute you got your first job. But, if not, it could be time to start, whether it\u2019s a workplace<\/a> or personal pension<\/a>. Technically, most pension funds are investment funds, so you\u2019d just be switching one type of investing for another. The key differences are that you won\u2019t be able to access the money until you\u2019re at least 55 (we know, we know \u2013 but we promise it\u2019ll be worth it). And, more appealingly, that you get tax relief on pension contributions. This is basically free money from the government.<\/li>
  3. How nervous does the idea of losing money make you?<\/strong> As we mentioned in point 1, the value of investments can go down as well as up. This means that, at some point, you may end up with less money in your investment pot than you originally paid in. The key thing if this happens is not to panic and immediately sell your investments, as that\u2019s a sure-fire way to make a loss. There\u2019s a good chance that the value will recover with time and an improved market. But if the idea of losing money, even temporarily, sends shivers down your spine, then you probably need to take a very cautious approach to investing. Or if you\u2019re comfortable with the reality that you may lose in the short term to gain in the long term, then you could consider taking on riskier investments.<\/li>
  4. Are you investing in the expectation of getting rich quick?<\/strong> If so, it might be best to stop now. It is possible for some people to make decent money in a short space of time through certain investment methods \u2013 such as day trading<\/a>. But to have even a hope of making a living from day trading requires time, experience, investment knowledge and dedication that many people investing in their 20s and 30s won\u2019t have. For most people, the rewards of investing are best enjoyed several years down the line, and with much less effort.<\/li><\/ol>

    What are my investment options in my 20s and 30s?<\/h3>

    You have the same range of investment options in your 20s and 30s as you do at any age. There are four mainstream types of asset you can hold:<\/p>