Many people think they need to cross some magical line in their adulthood before it's time to start investing. But the truth is that the earlier someone starts building their wealth, the more they tend to end up with when retirement rolls around. For young adults, investing doesn't have to be a go-big-or-go-home proposition. The three tips below can help many people get started building wealth in their 20s.
First, adults of any age may want to take advantage of employer-sponsored retirement plans. This is especially true if employers match any percentage of contributions — employer matches are like free money for the future. These contributions are also usually pretax, which means the person doesn't pay federal income tax on the money put into retirement plans.
Second, those in their 20s can start small with investing by using tools such as the Acorns app. Micro investing tools of this type let people put their pocket change to work. Most of these types of apps let users connect debit or credit cards. When the user pays with a connected card, the app rounds up to the nearest dollar (or an increment set by the user). The rounded portion is put into an investment or savings account. Many people are surprised at how much they save over time by having this change automatically invested.
Finally, 20-somethings may want to investigate more hands-on investments. Cryptocurrencies are a popular option today, and they don't require thousands of dollars in an account to start. People can sign up with crypto wallets and apps, such as Coinbase, to start investing with only a few dollars.