How should a 21 year old student start investing?

This answer is not a how to (there are few good, permanent how-to's in investments, if any, because markets change and evolve very business hour of every business day), but it's about the root starting point to making investments and some life advice.

Making investments starts with personal finance basics. Since you're 21 (and young), the first step in making investments is to solidify your base of personal finance knowledge, skills, and routines. Get to proficiency. Find confidence. Make sure the proficiency is really adequate and the confidence is actually justified. If you are already set in this, double check yourself. Be sure.

Doing well with investments is like doing well in math. If you don't learn algebra well, you will struggle with trigonometry. If you don't know trigonometry well, you will struggle with calculus.

It's the same with investing (regardless of asset class). If you can't make a budget for yourself, you will struggle to make a budget when you're investing in your own company (startup, small business) or in a piece of real estate. If you can't account for and understand how money goes in and out of your own life (where you have 100% of the information to work with), you will struggle to evaluate a stock you may buy (where you have like 20% or less of the total information). If you can't figure out how major global business news may or may not affect your own job/career in terms of career opportunities, job growth or layoffs, you will struggle to navigating investments in index funds or leaving your savings in the trust of a financial advisor.

Personal finance is like algebra and trig. Making investments (stocks, bonds, funds, real estate, small businesses, etc) is like calculus. Figure out algebra and trig real well before you get into the calculus class. You won't do well in calculus either way if you don't.

Routines to Develop

  • Save money month in, month out
  • Consistently read, know, and understand business & world news (the things about the parts of the world published daily in the Wall Street Journal)
  • Constantly source and explore new opportunities of all kinds, people, businesses, jobs/career/industry, non-profits, etc.

Skills to Acquire

  • Budgeting - Monthly, Weekly, Daily, Yearly
  • Mindfulness to spending (only spend on things because you have a good reason to)
  • Continually make your spent dollars go further and as far as possible (find deals, pay for the things+vacations where you actually have fun, etc.)


  • To be able to precisely account for everything you have (know your big picture at all times, cash on hand, assets, loans, liabilities, income, expenses)
  • To understand adequately everything you're engaged in that affects your financial life
  • To have the big picture about a lot of the various, probable possibilities in your future (when your income will go up and down like promotions/demotions/transfers/layoffs, when you might have side income/inflows from accumulated investments, contract positions and such, when your life expenses will rise like dating, engagement, wedding, marriage, kids, etc.)

This is a partial list of the basics. (Message me if you want more.) But I say this as a starting point, because regardless of the investing you do, you will need to have your personal finances under good control. The more stability and competency you have in your personal finances, the more roll over effect it has in your decision making when it comes to investing.

Lastly, it's continuous. Each extra bit of stability and knowledge you have with personal finances is one less bit of fear and one more bit of informed, level headedness you gain when you look to make investments. It is one extra bit you're less compromised, more risk neutral, and making decisions based on the investments' actual merit in the world at large vs. your own life's circumstance (and are acting more like professionals like Warren Buffet, Carl Icahn, etc.)

Hope this helps you see the big picture now. Hope it comes in handy as the years roll along and you're making more and more, both money and out of life!

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