Assets to Buy in Your 20s for Building Wealth Early

Before We Start… A Quick Note

This is not tailored financial advice. These are common practices and examples based on what worked for me personally. Your situation, goals, and risk tolerance may be different, so always do your own research before making financial decisions.

Why Your 20s Are a Prime Time to Build Assets

When I look back on my 20s, I realize it was the best time to start building wealth. You may not have the highest income yet, but you have something even more valuable, time. The earlier you buy assets that grow or generate income, the more they can work for you over the decades ahead.

Let’s look at how I treated assets to buy in your 20s.

What I Did (and What I Would Do Differently)

1. Contributing to a 401(k)

One of the best decisions I made in my 20s was contributing to my 401(k), especially when my employer offered a match. That match is essentially free money, and over time, compounding can turn those early contributions into a significant nest egg.

If I could go back, I would have started at a higher percentage right away instead of slowly increasing my contributions.

2. Investing in Crypto (Cautiously)

In my 20s, I also put some money into cryptocurrency. It is high risk, and I would not recommend putting in more than you are willing to lose, but having a small portion of my portfolio in crypto exposed me to a high-growth asset class that taught me valuable lessons about market volatility.

3. Buying a Home (and Why It Is Not Always an Asset)

I bought a home in my 20s and sold it later at a profit, which helped me pay off my student loans and become debt-free. However, a home is only truly an asset if it pays you or grows in value beyond what you spend maintaining it.

If I could redo it, I would have house hacked (buying a property and renting out part of it to cover my mortgage). That would have turned my home into a true income-generating asset much sooner.

Other Assets to Buy in Your 20s

4. Low-Cost Index Funds

Index funds, such as those tracking the S&P 500, are a simple way to gain exposure to a broad range of companies with historically solid returns. They require little maintenance and are a strong foundation for long-term investing.

5. A High-Yield Savings Account

While not a high-growth asset, a high-yield savings account is a safe place to keep your emergency fund or short-term savings, allowing your cash to earn more interest than it would in a traditional checking account.

6. Skills That Increase Your Earning Power

One of the most overlooked assets is your ability to earn. Investing in courses, certifications, or training that increase your value in the job market can have a huge payoff over time.

7. A Small Side Business

Starting a small side business in your 20s can be a way to create an asset that generates cash flow. Whether it is a service, a product, or content creation, a side business can grow into something more significant over time.

Takeaway

Your 20s are the perfect time to focus on buying and building assets that will grow in value or produce income. Whether it is through retirement accounts, investments, real estate, or skills, the key is to start early and let time work in your favor.

And remember, assets only help build wealth if you keep them long enough for their value to grow.

FAQ

Assets to Buy in Your 20s

Q: Should I prioritize paying off debt before buying assets?

A: If the debt is high interest, such as credit cards, it usually makes sense to pay it down first before focusing heavily on investing.

Q: Is buying a home in your 20s always a good idea?

A: Not necessarily. It depends on your location, job stability, and whether the home will grow in value or generate income.

Q: What if I cannot afford to invest much right now?

A: Start small. Even $50 a month into a 401(k) or index fund can grow significantly over time thanks to compounding.