While it doesn’t necessarily need to be stocks, investing early will greatly reduce your financial burden later down the road if you want to save for retirement. Check out the cost of waiting: https://www.primerica.com/public/high-cost-of-waiting.html
Compound interest. Buy into a total market index fund that will get you more or less 7% on average a year. Let’s say you have a $100 extra per month (doesn’t actually matter whatever you can afford).
Sally from age 20-30 puts her $100 in every month. At the end she has about $16000. She stops adding anything, but keeps that money invested. By 65 she has $170k.
Jeff doesn’t start investing until he’s 30, but he’s consistent and does the same thing, $100 a month from 30-65. He ends up with about $165k.
What that means is Sally made more money than Jeff even though she did the same thing for 10 years that he did for 35. She just started earlier.
I think better advice would be “invest/save” in general. You could just throw money into a mutual fund, index fund, savings account, whatever. If you get a job with an employer matched 401k, max that out. I don’t think you need to worry about trying to play the stock market by buying individual stocks. You’ll end up spending way too much time doing it for minimal gains over an index fund, and a lot of the time you’re just basically gambling on what companies you think are going to do well.
why would you invest in stocks?
While it doesn’t necessarily need to be stocks, investing early will greatly reduce your financial burden later down the road if you want to save for retirement. Check out the cost of waiting:
https://www.primerica.com/public/high-cost-of-waiting.html
Compound interest. Buy into a total market index fund that will get you more or less 7% on average a year. Let’s say you have a $100 extra per month (doesn’t actually matter whatever you can afford).
Sally from age 20-30 puts her $100 in every month. At the end she has about $16000. She stops adding anything, but keeps that money invested. By 65 she has $170k.
Jeff doesn’t start investing until he’s 30, but he’s consistent and does the same thing, $100 a month from 30-65. He ends up with about $165k.
What that means is Sally made more money than Jeff even though she did the same thing for 10 years that he did for 35. She just started earlier.
Time in the market > timing in the market every time.
I think better advice would be “invest/save” in general. You could just throw money into a mutual fund, index fund, savings account, whatever. If you get a job with an employer matched 401k, max that out. I don’t think you need to worry about trying to play the stock market by buying individual stocks. You’ll end up spending way too much time doing it for minimal gains over an index fund, and a lot of the time you’re just basically gambling on what companies you think are going to do well.