What To Do With Your Money As a Gen-Z

Sean: And with that, I’m going to skip to this question. How much of my income should I be investing? Let’s just say this person is making 20,000 – the average 20 or 25-year-old working in a 9 to 6 job, or 8 to 5 job.

Nicole: The answer is always ‘it will depend.’ Say like if you have 20,000 to invest, the answer will depend on your age and your circumstances. As someone who’s 21 years old, I can afford to invest a lot more and also a lot riskier because I don’t have any dependents. But if you’re a lot older, let’s say 30 years, 33-35. you probably have kids. You probably have people relying on you. So you can’t afford to take as much risk as opposed to me. So the answer here is always like, how much should you be investing? First like, what are you trying to achieve with your investment? Why are you doing that? Are you trying to make your money grow? Capital appreciation? Are you trying to preserve the value because of inflation and then you kind of work towards it? Okay. I want to make my money grow. Okay. A follow-up question like should invest in crypto? Should I invest in mutual funds? Should I invest in this? Another question, like, okay, you can invest in multiple things. There are so many investment vehicles out there. But pick one that will help you achieve what you’re trying to accomplish. Know your risk appetite, I think you can probably invest in crypto, but can you tolerate like when you wake up tomorrow morning, a 10% loss? Is that okay? If not, then probably something safer, less risky, less volatile. But how much of your money should you be investing? It will depend.

Sean: Depend. Yeah, for sure. For sure. I think when I was starting out, it was a lot riskier among the stocks that I was investing in, which were all blue chip. And then now I’m investing in crypto, which is super high risk. So it depends largely on where you are in life. I completely agree with what you said, Nicole. That was a very good answer.

Nicole: I think Golden Rule also is like before you invest now, there are things that you need to have before you start investing. If you don’t have savings, you should probably not be investing at all. If you don’t have an emergency fund, like things for like to help you keep you afloat, if something bad happens, you probably shouldn’t be investing any of your income at all. But if you already have an emergency fund, then you can probably invest more, and take more risks. It really depends on where you are at, like how much you are willing to risk. With investments, a golden rule is, and what you can’t afford to lose. It’s always like that. There’s a risk when it comes to investing.