Are you skeptical about investing in the stock market at such a young age? Truth is, the stock market IS scary., but you have time on your side for your investments to thrive if you begin in your 20s.

Looking for ways to earn a reasonable savings? Are you skeptical about investing in the stock market? Maybe it appears to be too complicated, you’re not ready to take the risks, or maybe you’re just not interested in putting your hard earned cash into an investment that you can’t capitalize on for a few years. Whatever the case is, you may want to reconsider it. Sure there are risks, and the return of investment is not instantaneous, but when you really, logically think about it, it makes sense. 

Below are a few reasons you might want to consider investing now:

1.  It’s a Reasonable Way to Save for Retirement

When you’ve just graduated from college, you’ve got thousands of dollars to repay in student loans and you’re looking for a job, the last thing you’re worried about is retirement. Though you have about 45 years or more before you even consider retiring, it can’t hurt to plan ahead. Investing in stocks is a fairly reasonable option for growing your money and saving towards the future.

2.  You Have Time to Recover

Realistically, investing in stock is sort of a “gamble.” You’re putting your money into a company with the hopes that the stock will continue to grow. However, there is the potential for a loss, which is often the scary part.

The good thing is that because you have time on your side, you will have plenty of time to recover from any losses you encounter.

3.  It’s Not as Hard as You Think

If you’ve ever watched a news report or read a chart on stock market trends your eyes likely crossed several times (unless you’re a finance major, then it would all make sense). However, there are plenty of resources online that you can refer to for help investing in stocks. Whether you decide to talk with a financial consultant, read a few books (or blog entries), or open a practice portfolio account, you can learn the basics of investing in no time at all.

Here are all of the links to our series on investing:

  1. Investing 101: A Beginner’s Guide To Investing For Wealth
  2. 10 Investing Myths Busted
  3. 7 Times When Investing Isn’t The Smartest Financial Move
  4. 6 Things To Do Before You Start Investing

4.  You Don’t Have to Invest All Your Earnings

You don’t have to invest big to see a return, so if you’re worried that you have to invest hundreds of dollars every month, this is simply not the case. Case in point; investing a dollar per day $365 a year and getting a 3 percent return on your investment will add up in 30-40 years. While it won’t be enough to live on for retirement, it will make a great financial addition to your other forms of saving.

5.  It May Be All You Have in the Future

If you were counting on living on your social security or pension funds, you may want to reconsider that. As the US strives to come back from its many financial deficits, pension accounts and social security are often at risk. By the year 2033, social security funds could be eliminated. As such, it pays to have a backup plan so that you’re not left working during your retirement years.

Though the last thing on your mind in your 20s is retirement, saving now prevents you from having to struggle later on. Learning how to invest in the stock market should be a financial goal you set for yourself in your 20s. As with most things, when you start young you end up benefiting in the long run.

With time and small investments, you could end up looking at a very lucrative retirement account that allows you to sustain a decent quality of life once you decide to say good-bye to the workforce.

This post is written by Jenna Brown.