Why Young People Should Invest in Stocks

February 1, 2023

Almost everyone you see around in their 20s is either struggling with getting a stable job, overworking themselves, or finding a lead to build their wealth. Most of them don’t know any other way of earning than the conventional means and hence once they graduate from college, they don’t know what to do except hustle. As young people, we are very impressionable. It is not only easy to learn things but also that those skills start coming as an instinct to you and it becomes easier to develop those skills.

In the financial world, the stock market is an important pillar. Learning about the stock exchange helps people become more financially intelligent and gives them a direction to building their personal finance.

The significance of the stock exchange can be explained by the GameStop story of 2021 in which a dying, outdated company became a highly valued stock within a couple of days. The stock price skyrocketed by about 8,000% and all because a number of teenagers decided to drive the stock price up as a rebellion against large hedge funds who were rooting for the company’s downfall and using this opportunity to make some money.

Here are some of the reasons why young people should invest in stocks:

Magnitude of Time


Young people lack the burden of responsibilities and have more time on their hands in their daily lives that can be put to good use if they knew how to utilize it. They can read up and research about big investments and observe current trends which can give them an inkling as to how the financial markets work and what leads to better outcomes. At this age where you don’t have an immediate need for money, you can invest a small amount without needing instantaneously needing a return or suffering a massive loss.

Ease of Risk


Investment even with calculated decisions and great care is ultimately a financial risk. However, young people are just beginning their careers and have a lot to learn before they practically need hefty amounts of money. Even if they take a risk that results in a loss, they have plenty of time and energy to bounce back which makes it easier for them to take a risk. Once you are settled in your life, have a stable job and family, it is harder to throw caution to the wind.

Improved Financial Habits


Young people have a tendency to overspend and lose track of the money they are throwing away. Mindful financing is an important trait to have later in life. If you learn the art to manage your finances and build your personal finance at a young age, it will help you in the long run.

Trial and Error


Even as business students, young people can’t know everything by learning the theory. It is important to implement the principles they learn in their student life by actually practicing these habits rather than relying on the books to help them succeed in the practical world. By learning from their mistakes, they can work on their investing strategies and come back stronge.