4 steps for investing successfully in your 20s

In March 2021, Peter was in his late 20s and was earning an average Australian income. Despite doing well for himself, property ownership had always felt out of reach.

“I never really had any sort of influence in terms of family, parents who’d invested. I didn’t really know any investors personally,” he recalled.

However, during lockdown Peter began to research property investment seriously, and realised that wealth creation was within reach.

These four steps helped the young investor achieve success in just a few years.

1. Start early

Entering the property market was intimidating, but Peter knew he had to act sooner rather than later.

“The longer I left it, any property that I was going to buy, if I waited another 12 months, was going to be 5–10 per cent more expensive.”

“I just knew I had to make a decision,” Peter said.

He also knew that this stage of his life was ideal for starting up his investment journey due to a greater capacity to take risks.

“This was probably the least risky time in my life where I didn’t have any commitment, no family. And so I thought, ‘Yeah, I’ve got nothing to lose’.”

2. Buy cheap and cheerful

With $60,000 to $70,000 saved up for a deposit – and no leg-ups from family – Peter had a limited budget when buying his first property in 2021. Priced at $390,000, his first property was far from luxurious.

“After I purchased the first property, I was looking back at the photos of the property that I bought, and I was like, ‘I’ve made a huge mistake – this property looks like an absolute dump. What have I done?’”

His gamble paid off, however, and just three years later the property had ballooned in value to $665,000.

“What people need to remember as investors is we’re not going to live in it. We don’t need to have any emotional attachment to it,” he said.

3. Be smart about equity

As his first property grew in value, Peter was gradually able to release equity to fund the deposit for his second purchase.

“I think that was when the light bulb went off in my head and I was like, ‘Wow, this is the power of the property market.’”

It took 12 months for Peter to accumulate enough equity to buy a second property, but it meant that when he did so, he did not need to spend any cash savings.

4. Accumulate

Over the past three years, Peter has weathered some major ups and downs, but he still intends to keep accumulating more properties.

“The long-term goal is to eventually retire and have a portfolio, sell a few, pay off whatever loans I’ve got left, have the rental income coming in,” he said.

“Full disclosure, I’m 32 now – I’ve got a lot of time. For the next 10 years, I definitely want to still work on acquiring as much as I can.”

Listen to the full conversation with Peter Peter here.