property-investments-for-young-people

Why Young People Shouldn’t Wait To Invest in Property

Often people labour under the false belief that you have to be older, well grounded and more experienced to start to invest in property.  Most investors wait until their forties, fifties, or sixties to begin investing in property. While there is nothing wrong with investing at those ages, there is an underlying belief among many young people that it is not possible to invest until later in life.  This is just simple untrue.

Starting to invest in your twenties (and thirties) is not only possible, but enormously beneficial. We will look at six myths that hold young people back from investing and why waiting to invest is both unnecessary and detrimental to your wealth creation plans.

I Don’t Have The Time –

Let me tell you a secret that the older generation all know – as you age you don’t get any more free time. In fact, the older you get, the more obligations seem to pile up.  Kids, career, home maintenance, etc all seem to multiply as you mature in life. Unless you plan on waiting until you are retired to start investing, you are never going to have “more time”. Don’t use “I’m too busy” as an excuse not to invest. You can’t afford to wait, because you will never get started.

I Don’t Have Enough Money

Money is important in investing in property.  While many “gurus” have made millions of dollars selling the idea that anyone can invest in real estate with no cash, credit, or problems – the fact is it does take money to invest.  However, that money doesn’t have to come from you. You can purchase your first property with nothing more than 3.5% down, which depending on the program and current lending standards, can be a gift from a relative.  One of the best things a parent can do for their child is to allow them to utilise the equity in their home to start investing in property.  This can provide the initial deposit and be the start that they need.  An old saying my mentor told me was “is it better to help your children with a warm hand or a cold one?”

I Don’t Have The Credit

If you have made mistakes in your early years regarding credit, or you simply have never used credit and therefore don’t have any, investing is not impossible. It simply takes another set of tools to make it happen.

First, you need to immediately begin fixing your credit. There are dozens of books online and at your local public library that deal with the issue of credit repair. Study these, follow these, and soon your credit problems will be a thing of the past.  You should start a savings plan so that you can demonstrate to a bank or financier that you have the ability to save money, and as a consequence, the ability to repay a loan.  Nothing impresses a Bank more than a demonstrated savings ability.  This saving can be put towards your deposit, so it can serve dual purposes.

I Don’t Know Enough

The more that you learn the better you will be as a Property Investor.  Knowledge is foundational to any property investor, but your age makes no difference in your ability to learn. The first step I tell any would-be investor is to invest first in their education. The internet is full of great articles and your public library is an unending source of knowledge.

One major advantage young investors have over the older generations is your ability to learn. As you age, your desire to pick up a book and learn or take a class on a subject decreases exponentially. You are not that far out of high school or college, so use those skills to learn how to invest. (Now, I do know many older investors who continually sharpen their mind through books, classes and other learning tools. However, I am speaking of adults in general).

I Don’t Want To Lose It All

Investing, by nature, involves risk.  However, a smart investor knows how to invest with careful criteria and sound judgment, minimizing risk and maximizing financial gain. This, again, is true at any age.  No one wants to lose when it comes to investing. Who, though, is at the greater disadvantage when it comes to risk?  Someone who is looking to retire in five years or forty years?  Clearly, the younger you start, the more time you have to make mistakes and still recover.
I am not suggesting that you make risky choices- jut the opposite, in fact. However, don’t let fear of losing stop you from winning big. When you have forty years ahead of you before retirement, you are allowed to build that nest egg into a war chest.  Investing $10,000 and adding no additional funds for forty years at a 10% rate of return (what you should aim for for with any real estate investment) will result in almost half a million dollars at the end. Now imaging what adding an additional $10,000 per year would do (over $5 million, in case you were wondering).  No wonder Einstein called compound interest the most powerful force in the universe.  The fact that you have time on your side allows the full effect of compound interest to work.

Working with a team of experienced Property Professionals will also help to reduce your level of risk and help you to get the results you desire.

I’m Not Settled Enough –

This is one of the largest complaints I hear from people when I encourage them to invest in real estate at a young age. Young people, by nature, are much more unstable in their lives. They change occupations, get married, have kids, move across town or across the country. However, this is used more often as an excuse not to invest than a reason.  If you were planning on moving to another state in six months, perhaps it doesn’t make a lot of sense to purchase a home. However, you can still learn the ropes by seeking a quality Investment Property to start your portfolio, picking up on skills that will follow you anywhere you move in the world. The houses may change style, laws differ, and your income fluctuate – but the fundamentals of real estate are the same where ever you live.

There is no reason “Why Young People Shouldn’t Wait To Invest in Property”, or at lest be working towards starting their investment portfolio.

For a FREE CONSULTATION to discuss your Property Investment plans you can talk to us at Success In Property.  Click here to book a meeting

Geoff
Follow me

Geoff

Senior Client Adviser at Success In Property
With over 30 years experience in Finance, Financial Planning and Real Estate, Geoff is ideally suited to show you how to build your Property Investment portfolio.Call on 0409228554
Geoff
Follow me
1 reply
  1. Swarup
    Swarup says:

    The longer one leaves it the harder it gets to start. Don’t be a First home buyer- think First Home Investor. A First home buyer waits longer than a First home investor to release equity.

    Reply

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *