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How to Invest in Your 20s

Smart investors know it's never too early to begin a nest egg—and invest for other goals. These 20-something investors are doing it right.

Articles by Betterment Editors

By the Editorial Staff
Betterment Resource Center  |  Published: August 21, 2013

Whether it’s $100 a month in an investment account or 10 percent of your paycheck to your 401(k), saving in the first few years after college is the time to start reaping the benefits of long-term investing.

We spoke with three customers in our community about their smart investing goals and how they manage their money.

Ming Leong, 26
Financial Goal: Treehouse Fund

Mechanical Engineer, Saratoga, CA

How did you get started investing?

The first time I had any money was about two years out of school. That’s when I started looking around for what to do with it. I went to finance classes at work but I didn’t have the time or guts for stock picking and even mutual funds seemed daunting. I started reading more and learned about Betterment. I enjoyed the concept because I don’t want to have to deal with my money, but I don’t want it to lose value.

What’s your goal?

Treehouse is a little bit whimsical, but it’s essentially our account to save for a house. My husband, Jared, and I are renting a cottage in the mountains and we love being outside in the woods and nature. We want to save enough over the next seven years for what we really want — an awesome mountain house.

What’s your splurge?

We spend money on camping and outdoor equipment. Our big splurge is horseback riding lessons!


Arjun Desai, 23
Financial Goals: Retirement and Building Wealth

Marketing Analyst, Dallas, TX

What’s your personal finance style?

It’s an art and I haven’t 100 percent figured it out yet. First I have my salary, out of which I take out benefits and taxes. Then I put a certain amount aside for retirement and expenses savings. I pay myself in the beginning and then I see what I have left over for take home. I use auto-deposit for all my accounts.

How did you get started investing?

I come from a family that is very prudent with money and we live within our means. But I found that even if you have strong foundational principles from your family it can be hard to execute them for yourself. There is not a lot of guidance about how to do it effectively. You can even work in finance but not know how to invest and budget. I did a deep dive on my own. I started building my own portfolio but wasn’t completely sure if I was doing it right. I came across Betterment on a forum and was very amazed with how easy it was.

What are your financial goals?

Since I am only 23, I thought I would choose two simple goals to get started: to build wealth and save for retirement. With these goals, I don’t have to change my allocation too frequently.


Greg Andrade, 25
Financial Goal: “Free Car 4 Life”

Civil Engineer, Los Angeles, CA

What was your ah-ha moment with money?

Right out of college I didn’t live on a budget and I was paycheck to paycheck. I needed to get control of my finances. I started out listening to financial podcasts while driving around Los Angeles for work, including one from Dave Ramsey. I adopted his methodology toward my finances. At the time, I had car payments and student loans. I used Mint.com and I went through all my accounts. I saw exactly how much I was spending on clothes and bars. I was spending a good portion of my paycheck on immediate gratification.

What’s your investing goal?

One of my goals is to limit the amount of money I am spending on my car. Now, I own my car outright and I invest the $400 I would have spent on a car payment each month. I call it the “Free Car 4 Life” fund because of Ramsey’s strategy — he says  if you pay yourself your car payment and save a total of around $32,000, you will be able to use the returns on that money to buy a new used car every six years. So that’s one of my goals. I also have an IRA and a vacation savings goal.

You’re a great saver, but what do you splurge on?

Lately it has been my girlfriend. But we are both working on not splurging so much. I had to restrain the number of beers and Dodger dogs I bought at the Dodger-Yankees game recently. Every now and then we splurge on vacation to Yosemite.

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