Investing in Your 20's

I would give any school leaver who, like I did, thinks stacking shelves is a lousy way of making money the following advice: buy an investment property as soon as you can. The first deposit is the most difficult to save and often you need to beg, borrow and do everything but steal to make it happen. Don’t worry though; once you’ve started building your portfolio, your appreciating assets will help you fund future deposits and your investment journey will really take off.

It is okay to ask other people for help if you are a bit short on your first deposit because by the time you save that extra money, property prices could have climbed again. Beforehand, budget and save to prove that you can stick to a plan and demonstrate that you are making a sound investment decision and have an exit strategy in place.

Another idea is to offer to pay back a higher rate of interest once the investment is refinanced and the borrowed money repaid. There is nothing wrong with using other people’s money to get started, provided you understand the basics of systematic investing and can make sacrifices when you need to. I’ll talk more about borrowing for your first deposit and sacrifices shortly.

You could also consider buying with someone else, who understands and shares you long-term plan, like your brother or sister. My brother Matt and I purchased our first property together. From this single property we each created substantial investment portfolios. If buying with friends, it is important to document the arrangement upfront, when everyone agrees on what they want. Down the track, you don’t want to find yourself in a position where one of you wants to sell and the other doesn’t.