There is an Asian saying that the early worker beats the hard worker. It's also true in investing because the earlier you start, you'll have a higher chance of success. First of all, you'll have the power of compound interest at your side.

It will grow your money exponentially such that if you start in your 20s, you can end up with a bigger kitty from what you saved as a young adult. You won't get the same results if you start twenty years later. When it's time to hang up your gloves, the few hundred dollars you put in at age 20 would have grown into a sizable investment.

Investing And Saving Tips For New Investors

If you're that 20-something guy and want to fast track your investing journey, look at these simple tips to point you in the right direction.

1. Think Long Term

Don't put down any money until you've taken stock of your present situation and what you want to happen in the future.

If you can't see yourself patiently looking after your investment for a long, long time then don't even think about going into it. What you want is an investment that has a long-term value so you better keep your hands away from those offers they disguise as opportunities to make you an instant millionaire.

These are the questions you should ask yourself:

• What do I want my financial situation to be in the next 5 years? What about the next 20 years?
• How much capital can I healthily invest now?
• How much income am I expecting to earn overtime?
• How long is my period for investing? Am I know how to choose the right broker?
• How many contributions do I want to make over time?
• If I look at my long-term goals with my current finances, which investment options are perfect to start with?
• When I'm already on track, what modifications should I make on my investments as the years go by so I stay in line with my objectives?

The big advantage of investing is how it helps to position your money, make it grow, and let you reach your goals. For instance, your goal may be to retire at 60 or move into a new home in the next 10 years or take a year off from work to see the world. It's your choice. The important thing is, you want to organize your investments so that by the time you need the money (to buy that house, for example), you can access your investments without any trouble.

2. Sooner is Better

You're young and FOMO (fear of missing out) is part of your psyche. You see some company stocks take off like the space shuttle and you feel bad because you skipped them. Or perhaps some kids you knew in high school are now multi-millionaires because they put all their money in cryptos and got lucky. The temptation swells inside you when you run into these “pot of gold” opportunities because that's normal human nature. Just remember that rewards come after risks.

But when you're just a few steps out of the starting line, it's suicide to go all in. The problem with many investors is they mix up hindsight with foresight. For example, ETF's and index funds don't make you bounce off the walls. But the gem is, they traditionally outperform the market. Are you the type of person who checks your phone every day and spends hours trying to make up your mind whether to buy or sell with your few dollars? If you are, we're sorry to say you won't probably do well enough in this game.

3. Pay Off Debt 

Yes, we know you're not going to hear this from your finance professor but it's is a good idea to have a plan to retire most (if not all) of your debts in your 30s. Between earning a 7% annual return from your money and paying 15% annually on your credit cards, which one gives you more financial benefits?

We're not saying that you should only start investing when you're 100% debt-free. Sometimes, it's advantageous to keep the low-interest debts to maintain liquidity. But you should make it your highest priority to get rid of all high interest-rate debts before you channel your money to investments.

4. Don't Let Your Emotions Impact

Many investors fail because they let their emotions get in the way of making logical investment decisions. The price of assets is a picture of the collective emotions of the whole investment community. When more investors perceive an asset negatively, its price tends to deteriorate; when the majority feel good about the company's potential, its asset price tends to climb.

Any indication that the price of an asset is moving away from our expectations begins to create tension and doubt. Questions will begin to come. Should I cut clean and avert a loss? Should I hang on to the stock and keep my fingers crossed that the price will make a U-turn? Is this a good time to buy more of them?

Buying an asset means you've convinced yourself that it is a wise decision and you are expecting the asset price to behave in a certain way based on your analysis. But that is not enough. You must also mark out the level at which you will sell your holdings, especially if your reason for buying it turns out to be wrong or if the asset price moves differently. What we mean is, your exit strategy should be in place before you buy the asset and when the time comes, exit as you have planned without regrets.

Bottom Line

On the bottom line, investing is a great tool for financial development and can help you to reach your goals. However, before making any specific decision regarding your money, you should make sure you're informed and well aware of the different aspects of investing, think long term always and do your best to pay off your debt before diving into the investing world. Your emotions will always “control” your steps, and when you understand it and know how to deal with it  – you're on the right way for success.

Good luck!