Despite what most people think, real estate is not something only old people do.
My brothers and I used to think this. We’d tell ourselves: “We have the rest of our lives to build wealth, buy real estate, and invest.” And while it is important to not let life pass you by, we’ve realized 5 powerful truths that justify starting your real estate investing journey in your 20’s.
In fact, there are many benefits to being a young investor.
1. As a young investor, you’ll have time to build and nurture relationships.
If you’ve ever spoken with a real estate investor, you’ve probably heard them say that real estate is a relationship business. That is an understatement.
Your success as an investor depends on who is in your circle, and who is on your team. Every investor relies on someone else to succeed in this industry.
As a young investor, your mentor will help guide you. Your fellow investors can offer opportunities that you didn’t even know were possible. Podcast hosts may offer you a spot on their platform to help give you exposure. Someone might bring you a great deal that will increase your monthly passive income. One real estate investor might connect you with someone else who can help you with a particular problem.
You may also be able to “connect” people, which is a great way to lead with value.
My brothers and I like to say, investing in relationships will have an infinite return on investment.
Investing in real estate doesn’t start with real estate. It begins by learning what it means to be a smart investor. Smart investors invest in themselves, and one of the best ways to invest in yourself is to build a strong network.
Remember: It’s not what you know. It’s who you know. The sooner you can start building these relationships, the stronger they will be later on. If you meet someone in your 20s, in ten years, you’ll be in your thirties, but you’ll have known this person for 10 years. That’s a long time to build a strong relationship.
2. Financial Independence at an early age
If you start investing in your 20s, you’ll be able to escape the rat race (or avoid it altogether) before most people are even aware they’re in it.
Financial independence is reached when you receive enough passive income from your investments to cover your living expenses.
In their 20s, the majority of people are graduating college and starting their careers.
By starting your real estate investing career in your 20s, you can be financially independent in your thirties, while most of your peers are just getting into the full swing of their careers.
3. More Opportunities and People Willing to Help You
As a young investor, you’re going to stand out. At real estate conferences, my brothers and I are usually among the youngest of attendees. It’s not uncommon for someone to tell me I’m their kid’s age.
This age difference will attract a lot of good attention to you. Other real estate investors want to support younger people who take action and are eager to start investing. Many investors see themselves in those who are just beginning, and if you’re younger, it’s easy for them to connect with you. Everyone wants to help a kid, especially one who’s determined to succeed as a real estate investor.
You won’t be young forever, so use this slight edge while you can.
4. You can take more risk
Of course, you need to do your homework before you invest your own or someone else’s money. But, as a young investor, you have time to make mistakes and bounce back. Obstacles are inevitable. They’re part of the entrepreneurial journey. If you start investing early on, you’ll be much farther in your thirties than if you had waited.
Think about it: If you go belly up at thirty, you’ve still got plenty of time to recover. If you lose everything at fifty five, however, that’s a different story. The younger you are, the less risk there is, because you have more time to recover.
When an investor says, “life is a game,” they don’t mean cards or sports. It’s about doing things in the right order and time, so you maximize the opportunities you have and the outcomes you create. If you start investing in your twenties, you’ll live a different life on the backend than someone who waits until they’re forty to pick up a financial education book.
Don’t postpone investing. I promise, you will regret it.
5. You have more time now
If you’re in your twenties, you probably don’t have kids, or a spouse. That means you have less responsibilities, and more time to start investing.
Yes, you probably have other things that make you “busy.” Whether it’s class, a job, or a significant other, there’s always going to be something vying for your attention. Make time for what matters, and prioritize real estate investing. If you think you’re busy now, wait until you’ve got a family and kid’s soccer practice.
It’ll be much harder to start building your real estate portfolio when you’ve got those kinds of responsibilities, rather than a part time job, homework, and parties. We’ve all got the same 24 hours in a day. Make sure you spend yours wisely, because time is the most valuable thing we have.
To end this, I’ll leave you with something multiple successful investors (most of which are people we truly look up to) have said to us:
“I wish I had started at your age.”