Should I start investing? I feel lost!

I’m in my first year of university and have saved up around $20,000. Right now, it’s sitting in my bank account, earning about $60 a month in interest. I feel like I could be doing more with this money, but I don’t know where to start. Should I invest it? If so, how and where? I’d appreciate any tips or advice because I’m completely new to this.

If you’re not ready to dive into stocks just yet, you could put the money in a high-yield savings account (HYSA) to earn more interest while keeping it safe. If you’re thinking long-term, low-cost index funds or ETFs are a good way to start. They’re less risky than picking individual stocks and let you grow your money steadily over time.

Investing? Yes! That’s how you make your money work for you.

Before investing, make sure you have an emergency fund and a clear budget. If you’re just starting out, look into something simple like a target-date fund, a Vanguard LifeStrategy fund, or even VT (a global ETF). These are solid options that don’t require constant monitoring. Once you learn more, you can adjust your approach to match your risk tolerance.

@Lyle
Earning $60 a month on $20,000 means about 3.6% annual return. That’s not bad for just sitting in the bank, though it could be better.

Rin said:
@Lyle
Earning $60 a month on $20,000 means about 3.6% annual return. That’s not bad for just sitting in the bank, though it could be better.

You’re right. I need to double-check my tired math!

Actually, $20,000 at 4.5% interest would be around $75 a month. Maybe see if your bank offers better rates.

Learn the basics before jumping in. Understand how much risk you’re comfortable with and start small. There are plenty of free resources online—YouTube, financial news websites, and forums like this one. Take your time.

Absolutely, yes.

Consider opening a Roth IRA. Investing now for retirement will reduce financial stress later in life. The earlier you start, the better.

Do you have any income? Is this all the money you have saved up? You need to figure out if you’ll need this money soon or if it can stay invested for years.

If this is money you’ll need for school, don’t risk it. Stick with something safe like a high-yield savings account or short-term treasury bonds. If you’re thinking long-term (like 20+ years), index funds like VOO or VTI are great options. Just remember to hold on through market ups and downs. Also, avoid trying to pick stocks or mess with risky stuff like options or crypto.

Gold might be a good option—either physical gold or through contracts. It’s a solid store of value.

You could open an account with an app like Robinhood and put $15k into something like VOO. Keep $5k aside as your emergency fund. Alternatively, open a Roth IRA and max it out for the year, then invest the rest in VOO. That way, you’re building a retirement fund too.

If you start with $20k and keep contributing regularly, you could end up with hundreds of thousands in 20 years. Most of that growth would come from compound interest.

Hold up—how are you getting those numbers? Without consistent contributions, $20k wouldn’t grow anywhere close to $600k in 20 years. Did you mean you’d be adding $1k a month or something? And why are you assuming it’s tax-free?

If you start with $20k, add $1k monthly, and earn an 8% return, then yeah, it could grow to $600k over 20 years. But the tax-free part depends on the account type—like a Roth IRA.

Yeah, but the original comment didn’t explain how much they meant by ‘contribute.’ It’s confusing.

True. I was just trying to make sense of it for them!

Fair enough! But yeah, we need clearer numbers for this kind of calculation.