Youth Investing

Back to Money advice
9 June 2022
They say that “youth is wasted on the young” – I never properly understood that statement until deep in my 40’s when I started taking a good hard look at my finances and retirement plans. I soon realized just how much time I squandered in my youth by not investing earlier and how this severely dented my retirement plans!

There are many people that can relate to my reality, wishing they too were more astute in their youth with regards to investing and building wealth for their later years. So often I speak to people on the verge of retirement and one of their biggest regrets was not starting to invest earlier in their lives.

Investing requires a healthy blend of various factors like understanding asset allocation, risk and return, volatility, liquidity, fees and taxation implications to name but a few. But one factor so often overlooked and probably the biggest contributor to wealth creation and financial freedom is the effect of time. Time is literally money when it comes to investing! The more time you have to invest the greater the chances that you will make more money!

So what generally stops us from starting to invest early in life? From my experience the following reasons (dare I say excuses) seem to repeat themselves throughout the generations:

  • Vanity and style – spending money on looking good, wearing the latest brands and fashion tends to be more of a priority when younger than investing
  • Flashy cars and the like are more exciting than chats about investing for retirement and wealth creation. Unfortunately these “depleting assets” cost money and more often than not lose their value and suck you into the debt trap
  • A general lack of knowledge of how to go about investing is also common
  • A belief that investing is only for those that have permanent employment
  • I will start investing seriously when I have more money!” Sadly this is one I hear most often. Ironically, you don’t need a lot to start with if you start investing early – a little goes a long way as can be seen in the example below

One thing I can say about our youth is that they are resilient and creative and if they need money they make a plan and find it somehow. A few less pizzas or burgers this week will fund their pop concert ticket next week! It is just a pity that investing hardly ever ranks up there in their list of top priorities or fun activities.

Perspective is sadly missing when it comes to educating our youth around investing. Just consider the following simple example that drives home the power of investing early in life:

Starting Age to invest:

Age 25

Age 35

Age 45

Age 55

Investment Term (years):





Target Age:





Monthly amount to start investing:  

R 500 pm

R 1 324 pm

R 3 935 pm

R 15 538 pm

*Estimated Outcome at target age 65:

R 3 555 000

R 3 555 000

R 3 555 000

R 3 555 000


*An investment growth of 8% p.a. with a 6% annual contribution escalation was used along with the respective investment terms and contributions per age in calculating the estimated income. Figures have been rounded to simplify comparison. The table is to be used for illustrative purposes only.

Another way of interpreting the above table:

Starting Age

Target Age to invest: 65


You would need to invest roughly 2,6 times more per month to get a similar investment result at age 65  had you started at age 25


You would need to invest roughly 7,9 times more per month to get a similar investment result at age 65 had you started at age 25


You would need to invest roughly 31 times more per month to get a similar investment result at age 65 had you started at age 25


Greater required investment contributions normally means less of your money is available for the fun stuff in life. Starting to invest early can give you the best of both worlds – more money for the fun stuff and enough for a healthy retirement. If you start investing early you could even retire earlier and still qualify to Bungee jump!

The trick is how to make investing “relevant and fun” so that it moves up on the list of priorities for our youth, an age-old challenge for financial advisors and parents alike.

Luckily today technology has rapidly advanced making investing simpler, easier to access and even fun! The youth tend to love technology and if investing can be done via technology as opposed to solely traditional means, then I believe we are on the right track to reaching our youth earlier to encourage them to start investing.

It is said that Warren Buffet, arguably one of the greatest investors of our time, when asked to share some regrets regarding investing answered and said that he started too late…….and he was 11 when he started investing! By the way according to the Forbes website, at the date of writing this article, his net worth was $118 Billion.

Time can be BIG money if you start early and teaching this to our youth is as important as learning about the birds and the bees!



Gareth van Deventer CFP®

OUTvest is an authorised FSP. Views expressed in this article is that of the financial adviser and not a full representation of OUTvest’s stance. All investments are exposed to risk, not guaranteed and dependent on the performance of the underlying assets. Ts and Cs apply.

Latest Money advice articles
OUTvest Market Commentary - May 2022
Retirement Investment Strategies by Age
OUTvest Market Commentary - April 2022