Well, you’ve made it to 25 bypassing your crazy teenage years and turbulent early twenties, slowly transitioning into being a full-fledged autonomous adult with bills and responsibilities. Alongside your journey so far you might have heard about pensions, investing or even get involved with online trading through a brokerage. On the other side, you have definitely done quite a bit of travelling, been to at least of a couple of continents or seen one of the wonders of the world on your coveted backpacking trip. At this stage, you have some knowledge and experience on both ends though you might wonder what should you be really focusing on and what is the more sensible option. In this article, I will be putting forward arguments on both sides concluding with my personal opinion on that matter.
Starting off with the sensible options of investing, which is one of the most important life skills you can ever learn that will set you off for life if you are patient and smart enough doing it. There are a number of important factors that need to be considered:
- Time and The Magic of Compounding Interest – on one side you need time for your money and investments to grow on the other compounding interest is where the real benefits of long-term and early investments come in. Simply put, compound interest is interest earned on interest. This means that your reinvested earnings and additional investments grow exponentially with the passage of time.
- Risk – managing risk would be the second most important pillar after compounded interest. Depending on your age the risk/reward and types of investments vehicles shift, though you always have to be mindful of your current portfolio and the factors that affect it.
- Learning and Habits – learning to budget, save to invest, adjust your spending habits and expenses are all skills that you are going to learn in consequence of learning to invest, those being an integral part of the subject. Learning to earn money by saving money can eliminate impulse buying.
- 21-century Investing Facilities – in our age it has never been easier to get involved in investing in index funds, robo-advisors, buy securities through an online broker or simply buy products offered with your online banking. With technology at your fingertips investing and educating yourself about it has never been easier.
- Quality of Life – Your general quality of life will improve as you feel more in control of your finance and have a safety buffer for any emergencies or opportunities that may come your way.
On the more adventurous side, travelling brings about intangible benefits that may not change your Finances, but will definitely change you as a person and the way you perceive the world around you. This is crucial at a younger age as you need to get a perception of the world congruent with how the world really works rather than some predefined model that you have been thought. Additional benefits out of travel:
- Expanding your horizons and being open-minded. When you are young it is much easier to change, adapt and learn, rather when you are already old with particular values and habits already ingrained in your DNA.
- It is cheaper to travel when young as you only have to take responsibility for yourself and your wellbeing rather than your whole future family. You have much more freedom and flexibility to go do whatever strikes your fancy. Independence at this point is invaluable.
- You will get early experience in travelling picking up knowledge, experience, attitude and adaptability along the way. Impact of globalism and the interconnectedness of the global economy.
- Language exposure. The younger you are the easier it is to learn new skills and languages. Speaking more than one language greatly increases your employability and it also gives you a different angle on thinking about subjects. As the thought process in one language usually has it’s culturally ingrained in it. Work that grey matter while it’s still fresh!!
- Curtailing ignorance by gaining global exposure and knowledge. Expanding your consciousness to new cultures and ways of thinking is crucial for your adult development.
- Boosting your confidence and empowering you to achieve your goals in the future. Getting on to bigger and bolder things!!
- Lower standards when you are younger, better deals and discounts, ease of travel.
A man travels the world over in search of what he needs and returns home to find it. George A. Moore
You should travel when you are young. This is a time when you go out travel around and see what you like and what you don’t. Have a taste for life regardless of your financial position. Yes, investing is important and you should be learning about it through the soft skills and experience will benefit you even more at this stage.
Nothing changes you as travelling does.
Don’t be focusing on those small paychecks rather go out and create those memories for life with the little you already have.
Hindering career advancement, not having enough money, you can always travel later in life. NO. If you feel like you have to do it now you have to do it now. Buy the ticket and pack your bags you are going to figure things out later or on the go. Your finances are not really an excuse for not travelling. It is not going to make you less valuable in the employment market. International exposure makes you valuable.
You need to understand how the world works – the culture, people, believes and ideas – before you can actually take the world on your own.
Make it Count.