Where to invest your money when you're young: Practical advice

Investing from an early age is one of the best decisions you can make to ensure your future financial stability. But with so many options available, it can be difficult to know where to put your money when you're young. This article guides you through the different investment strategies, profitability possibilities and ways to make your savings grow.

There are many advantages to investing at a young age. The main one is time. When you start investing early in your working life, you benefit from the cumulative effect, also known as compound interest. This means that not only do you earn returns on your investments, but those returns themselves begin to generate profits. Here are a few reasons to invest early:

• Increased profitability: The earlier you invest, the more time you have to benefit from growth.

   

• Risk management: Investing young allows you to take calculated risks, as you have time to recover from losses.

   

• Financial independence : Building assets gives you greater financial freedom in the future.

   

• Opportunity for diversification: By starting early, you can explore different types of investment and build a well-balanced portfolio over the long term.

   

• Anticipation of life goals: Investing at a young age makes it easier to plan your life projects, such as retirement or property purchase, by giving you financial leeway.

   

Investments entail financial risks, including loss of capital. It's advisable to be well-informed and to seek expert professional advice before making any decisions.
 

There are many investment strategies to consider when you start investing young. Here are the best options for where to put your money.

High-yield savings accounts

Savings accounts remain a popular option for many young investors. They are secure and provide a return while maintaining liquidity. High-yield savings accounts offer higher interest rates than standard accounts, and are therefore ideal for saving a small sum over the medium term.

Investing in the stock market

For young professionals who want to be more adventurous, the stock market is an excellent option. Whether you invest in individual stocks or low-cost funds such as ETFs, there are a wide variety of stock market investment strategies to explore. Equity returns can be high over the long term, although the risks are also greater.

ETFs, a good option for beginners

ETFs (exchange-traded funds) are interesting instruments for young investors. They enable you to diversify your portfolio at limited cost, making them a perfect investment strategy for someone just starting out.

Life insurance

Life insurance is often underestimated by young people, but it remains a tool worth considering. With a life insurance contract, you can choose to diversify your investments through guaranteed euro funds or riskier units of account. This type of investment is ideally suited to building long-term capital, while benefiting from an advantageous tax framework.

Real estate: stone as a safe investment

For those with the means to invest a larger sum, real estate is the investment of choice. As a young investor, you can turn to Sociétés Civiles de Placement Immobilier (SCPI) or even buy a property to rent out.

• SCPI: By investing in SCPIs, you buy shares in real estate owned by a company, enabling you to receive rental income without having to worry about management.

   

• Rental investment: Buying a property to rent out can also be a highly profitable investment strategy over the long term, especially if you take advantage of incentives to buy or rent (such as the LMNP scheme).

   

Investing in private equity

Private equity involves investing in unlisted companies, often in a development or transformation phase. This type of investment offers high potential returns and helps support the real economy, but is generally reserved for investors prepared to tie up their capital over the long term. For young investors, private equity can represent a strategic opportunity to boost their portfolio if they have sufficient savings capacity, a long investment horizon and a good risk tolerance.

Eurazeo Wealth Solutions, a private equity specialist, offers individual investors a varied range of funds accessible from €10,000, enabling them to position themselves on private market opportunities with expert management.

Private equity investments entail significant risks, in particular the risk of capital loss. These investments can be illiquid and their value can fluctuate. It is therefore important to ensure that these investments correspond to your long-term financial objectives.

Crypto-currencies: a high-risk investment

Cryptocurrencies have become very popular among young people. Assets such as Bitcoin or Ethereum have shown huge growth potential, but with high volatility. This can be an interesting strategy for young investors who are willing to take risks.
Investing always involves risk, whether it's related to market fluctuations, financial choices or unforeseen external factors. Before committing yourself, it's important to assess these risks so you can make informed decisions about your investments.
 

Investing a small sum may seem limited, but with the right tools and the right strategy, it's possible to start building a solid portfolio.

Use micro-investment applications

Innovative applications allow you to invest as little as 10 euros, which is ideal for those starting out on a shoestring budget. These online platforms make investing accessible to all, even with small sums, and enable assets to be built up gradually.

Programmed savings plans

Some banks and investment platforms offer automatic savings plans, where a small sum is invested each month in specified funds. This practical approach helps you build capital over the long term, while ensuring steady progress towards your financial goals.

To maximize the profitability of your investments, it's essential to avoid certain common mistakes. Concentrating all your capital on a single asset type, such as equities or cryptocurrencies, exposes your portfolio to significant risk. Diversification, on the other hand, is an effective strategy for mitigating these risks.

The quest for quick gains is a frequent temptation, but it can often lead to significant losses. Similarly, investing in complex financial products without fully understanding them can lead to costly mistakes. Patience and a long-term view are invaluable assets for a successful investment.

Finally, transaction, management and brokerage fees can have a considerable impact on your returns. It is therefore essential to compare these costs between different financial products before making a decision.
 

Defining a structured investment strategy is important if you want to invest your money well as a young professional. Here are a few tips to help you build a solid foundation.

Establish your financial objectives

Before choosing where to invest your money, it's important to identify your objectives: do you want to buy a property, prepare for retirement, or have funds to travel or prepare a project? Depending on your ambitions, your investment choices may vary.

Diversify your portfolio

By spreading investments across a variety of assets, such as equities, bonds and alternative investments, young investors can reduce risk while maximizing returns. Alternative investments, while they may offer new opportunities, require a thoughtful approach and prudent risk management to ensure stable, sustainable growth.

Adapting investments to your risk profile

Some young people are prepared to take risks to achieve a high return, while others prefer to play it safe. It's important to know your risk tolerance so you can choose the right investments.

Keeping a long-term vision

Investing at a young age allows you to establish a long-term vision. Time is your best ally, as it allows you to smooth out market fluctuations and benefit from the effect of compound interest.

Reassess your portfolio regularly

Investing is not a static process. It's important to periodically reassess your strategy in the light of market trends and your financial objectives.