Tips for those in their 20s, from a 23 year old.

Disclaimer: All opinions expressed on this blog are not to be taken as financial advice. We are not professional financial advisers. It is necessary to do your own due diligence before making any investment decision.

Recently, CapitalistLAD joined InvestingNote to widen our engagement circle. Our content has been well received by the members of the community. As promised, we wanted to let you in on our recent comment (long enough to be an article) about personal finance to a fellow InvestingNote user. So in this article, we will be sharing tips that 20 year olds can implement. If you fall within this demographic, please read every detail of it!
How should you, as a young adult, apportion your money? Over here at CapitalistLAD, we believe in setting aside 80% for investments and 20% savings (purely savings). Let me explain.


When it comes to investing, we like to take the less conventional approach to investing. Most books or educational materials out there might recommend a balanced portfolio of cash, fixed-income (bonds), equities (stocks) and in some cases, gold. However, we like a pre-dominantly equities portfolio, with deployable free cash sitting on the side.

This is how you should break it down,

20% free cash: You only deploy the cash here when the market has fallen beyond 20% from its peak. Be patient and let this money sit there. In fact, work harder and add more money to this pool.

40% Index ETF: I would prefer investing in the S&P 500 as opposed to the STI. It has lower expense ratio and historically better returns. Do take into account the associated costs of investing in the US (such as wiring, FX rates and taxes for alien residence).

30% REIT: This is a good way to get exposed to the real estate market. I would like you to set aside conventional wisdom of owning a physical real estate for a start. There are a lot of risks associated to buying a physical property as a small player (we will leave that for another time). REITs allow you to buy a diversified portfolio of high quality real estate that are well-managed by the REIT manager. You can expect yields of about 6-7% depending on when you acquire the REIT (so timing does matter). I like REIT for regular cash flow.

10% Speculative Investments: START WITH A DEMO ACCOUNT FIRST! Learn the basics of trading assets like FOREX, indices and commodities. I wouldn’t suggest options for a beginner. PLEASE, no binary options (that’s just gambling to me). I recommend you get the proper education before starting your trading journey. If you don’t wish to learn trading, you could set aside this 10% for free cash too.

Savings: This is not the type where you make a withdrawal to travel or buy a new handbag or computer. It’s just a personal safety net in case of a rainy day/unfortunate event.


Extra tips:

  • Work hard and set aside more cash for investments. If you are a student, take up part-time job(s)!
  • Spend within your means. Most young adults spend their entire paycheck on fancies dinners and impressing their friends. Don’t be one of them!
  • Spend your weekends wisely. Your friends may say otherwise but that’s probably because they don’t want to be where you want to be 5-7 years from now. Time is your most valuable asset. Don’t waste it on things that won’t bring you a future benefit!
  • Dedicate time to honing your investment skill-set. This will pay off tremendously 3-5 years from now. Be patient and learn continuously.
  • Follow CapitalistLAD on Facebook & InvestingNote to receive regular updates on your content (subtle advertising but it will definitely be worth it so act now)!

Simply, the above are just some ways 20 year olds can start their investment journey and take advantage of the great returns the stock market can offer. Knowledge is power, so start your education today!

Till next week…

Nigel Fernandez



Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s