The 7 best investments you can make in your 20s

Investing is a key factor in building financial stability and achieving long-term success. For young people in their twenties, deciding where to invest can be difficult and unclear. However, it's important to start as early as possible to harness the power of time and achieve significant growth in your portfolio. But it's not just about investing in the financial markets, it's about investing in yourself. This is what every person should do first of all.

1. Education

Investing in education can open the door to better job opportunities and higher incomes in the future. Consider investing in books, courses, workshops or certificates. You don't have to go to college, just find something that interests you and get better at it. With a good, quality education, you can achieve higher salaries or shine in a job interview. Anything you can do above and beyond the rest gives you a solid advantage. In investing, I would say a competitive advantage.

While studying, you have great opportunities to network with people in your field, professors, classmates and professionals in your industry. These contacts and relationship building can be valuable for your career and future business. Your university community can provide you with support, inspiration and opportunities for collaboration.

2. Financial literacy

In some ways, this is related to education, but this is not something that you should only do when it suits you or you enjoy it. Everyone should be financially literate. Then you simply can't fall for a scam or wonder how to pay your taxes.

Personal finance is much more than money. While earning and saving are the basics of building wealth, you also need to protect yourself from lawsuits (insurance), use debt to buy things you couldn't otherwise afford (mortgage), and navigate the complexities of the system that affect your income (taxes). Learning to manage your personal finances can help you make smart decisions, simply because you know your options and understand how they can help you.

Sometimes it pays to think it the other way and not just the way banks or institutions want you to. Occasionally there is an opportunity that is not obvious at first glance, but if you know it, you can use it to your advantage.

3. Paying off debt

If you have any, you need to get rid of it as quickly as possible, unless of course it is a mortgage. If you have studied banking, debt is great to use to enrich yourself. For example, Robert Kiosaki (author of Rich Dad Poor Dad) is an expert in this regard. I recommend everyone to read his book.

At a young age, you have the advantage of time and flexibility that can be used to effectively reduce debt and secure financial well-being.

The important thing to remember is that not all debt is bad debt...

4. Save for the hard times

Once you've paid off your debts, start putting money aside for emergencies. Ideally, you should have three to six months of living expenses in a savings account that is easily accessible.

This can be a high-yield savings account, a money market account or a regular savings account. It may take some time. But be patient, because achieving this goal will give you a cushion of security, but more importantly, peace of mind because you can count on covering your expenses no matter what happens.

This will prevent you from pulling money out of your retirement savings or other accounts you don't normally touch, but in cases like this, it's a necessity.

5. Investing in growth companies

If you have all the previous secured, here comes investing in stocks and capital markets. It is important at this stage that you do not have debts and other such issues that could spoil your portfolio. It would not make much sense in such a case.

At such a young age, it's also not a bad idea to buy and build your portfolio a little more risky. Not too much, but enough. I wouldn't be afraid of more tech titles and sometimes more growth companies. If you start investing early, you have a huge advantage in time on your side. You can afford to wait longer for appreciation on your investment than someone who starts investing 5 years before they retire.

Growth stocks represent companies that are increasing earnings and gaining market share at a faster than average rate. The most successful growth stock companies start as small, little-known startups that become industry leaders through innovation and determination.

6. S&P 500

The S&P 500 Index is one of the best long-term investments for anyone, regardless of age. Composed of the 500 largest publicly traded companies in America, this index can provide you with broad diversification at a relatively low fee. While not as exciting as growth stocks, it can give your investment portfolio a solid foundation for long-term growth.

Everyone should have one. You'll never go wrong with this purchase. If you buy $SPY-0.4%, you'll even receive a dividend on a regular basis, which really suits an investment you never want to sell.

7. --

This is where anyone can add just what they would like and maybe invest in, depending on their own taste. There's room to invest your time in sports, health, or maybe alternative investments too.

This can be cars, watches or limited edition magazines, stamps, postcards...

The amount of alternative investments is really overwhelming and I would love to know what you invest in outside of the traditional capital markets and real estate.

This is not financial advice. I am providing publicly available data and sharing my opinions on how I would handle myself in given situations. Investing is risky and everyone is responsible for their decisions.