Investment Strategies For Young People In Australia

Do you wonder about investment strategies for young people in Australia? When it comes to investing, age really does matter. For young Australians in their late teens, twenties, or even early thirties, the strategies that work best often differ from those used by older generations. Young investors usually have one great advantage on their side: time. Time in the market allows them to take more risks, be more aggressive, and reap the rewards of compounding growth over decades. But many young people are unsure where to start, or how to make their money work harder for them. In this guide, we’ll explore the different investment strategies that young Australians can consider—from traditional stock market investing through to unique approaches like using inheritance, savings, or even self-managed super funds (SMSFs).

Why Investing Early Matters

Before diving into strategies, it’s important to understand why investing young is so powerful. The earlier you begin, the more time your money has to grow through compound interest. For example, if a 22-year-old invests $10,000 at a 7% annual return and leaves it untouched, that money could grow to over $75,000 by the time they’re 50. The same $10,000 invested at 35 would only grow to around $38,000 by age 50. Time in the market can make an enormous difference.

Young investors can also afford to take on more risk. While older investors closer to retirement need stability, younger Australians can ride out short-term volatility and potentially enjoy higher long-term returns by investing in growth-oriented assets like shares, exchange-traded funds (ETFs), or property.

What Young Australians Are Investing In

Investment habits among young Australians are changing. Gone are the days when buying property was the first and only goal. Instead, young people today are diversifying their wealth-building strategies. Some of the most popular investments include:

• Shares and ETFs – Many young Australians are turning to low-cost trading platforms to buy individual company shares or diversified ETFs that track the broader market.

• Cryptocurrency – While volatile, crypto has attracted younger investors who see it as an opportunity for growth and innovation.

• Property – Despite high housing prices, many young people still aspire to buy an investment property, especially when pooling resources with family or friends.

• Managed Funds and Superannuation – Younger investors are paying closer attention to their super funds and considering ethical or growth-focused options.

• Alternative Investments – This includes everything from peer-to-peer lending to investing in start-ups, fractional property ownership, or even collectibles like rare sneakers or art.

Each of these investment vehicles comes with its own level of risk and return potential, and the right mix will depend on individual goals and tolerance for volatility.

Taking an Aggressive Approach

One of the benefits of being a young investor is the ability to be more aggressive in your strategy. This doesn’t mean gambling your money, but it does mean leaning towards growth rather than safety. An aggressive investment portfolio might include:

• 70–90% shares or growth assets like Australian equities, global shares, and property trusts.

• 10–30% defensive assets like bonds or cash for liquidity and stability.

The idea is to maximise long-term returns by investing primarily in growth assets. Yes, there will be downturns along the way, but history shows that markets tend to recover and grow over decades. Young investors who can resist the urge to panic sell during downturns are often rewarded later.

Different Types of Investment Opportunities

1. Shares and ETFs

Shares allow you to buy into companies directly, giving you ownership and exposure to dividends and capital growth. ETFs, on the other hand, are baskets of stocks that provide instant diversification. For young people, ETFs are a popular entry point because they’re cost-effective and reduce the risk of betting on just one company.

2. Property Investment

Although housing affordability is a challenge, property remains a key investment for Australians. Young people are getting creative, with many choosing:

• Rentvesting – renting where they want to live while buying an investment property in a more affordable location.

• Joint ownership – pooling resources with friends or family to buy property.

• Fractional property investing – buying a portion of a property through investment platforms.

3. Cryptocurrency and Digital Assets

Cryptocurrency continues to be a high-risk, high-reward investment. Some young Australians allocate a small percentage of their portfolio to crypto in the hope of capturing outsized returns. However, due to its volatility, it’s best treated as a speculative investment rather than a core strategy.

4. Managed Funds and Superannuation

For those who prefer a hands-off approach, managed funds and superannuation are reliable options. Many young Australians are switching to growth-focused or ethical super funds, knowing that the money won’t be touched until retirement but will compound significantly over decades.

5. Alternative Investments

With the rise of technology, new investment avenues have opened up. These include:

• Peer-to-peer lending platforms that allow investors to lend money to individuals or businesses for interest.

• Start-ups and crowdfunding investments in innovative businesses.

• Collectibles such as art, rare wines, or even luxury watches. While riskier and less liquid, these can provide both enjoyment and potential financial return.

Investing With Inheritance

For some young Australians, an inheritance can provide the first significant lump sum of money they ever manage. While the temptation might be to spend it on lifestyle upgrades, inheritance money can set up financial stability for decades if invested wisely. Common strategies include:

• Using inheritance as a house deposit to break into the property market.

• Investing in shares or ETFs to create a diversified portfolio.

• Paying off debt first before investing, which can free up future income for more wealth building.

The key is to resist the temptation of spending it all at once and instead treat it as seed money for long-term financial independence.

Investing With Savings

Savings remain the backbone of any investment plan. By consistently putting away a portion of their income, young people can build up a lump sum to start investing. High-interest savings accounts and term deposits are safe but generate modest returns. Instead, many young Australians are:

• Building up an emergency fund in savings, then shifting excess money into shares, ETFs, or property.

• Using micro-investing apps to automatically invest small amounts into diversified portfolios.

• Applying the “pay yourself first” method—directing savings into investments before spending on discretionary items.

Consistency is the most important factor. Even investing as little as $50 a week into growth assets can build substantial wealth over 20–30 years.

Self-Managed Super Funds (SMSFs)

Another strategy that is gaining popularity among younger Australians is establishing a self-managed super fund (SMSF). While more common with older investors, younger people with significant balances—or those pooling resources with family—are beginning to use SMSFs for greater control over their retirement savings.

An SMSF allows you to invest in a broader range of assets than traditional super funds, including direct property, shares, or even alternative investments. However, SMSFs come with higher responsibilities, compliance requirements, and costs, so they’re not suitable for everyone. For young Australians with strong financial discipline, though, an SMSF can be a powerful tool for long-term wealth creation.

Unique and Creative Investment Approaches

Some young Australians are thinking outside the box when it comes to investing. These include:

• Side hustles and small businesses – investing in their own entrepreneurial ventures.

• Education and skills – arguably the best investment of all, since improving earning potential compounds over a lifetime.

• Sustainable and ethical investments – choosing companies and funds that align with personal values, such as clean energy, healthcare, or technology.

• Fractional investing platforms – where investors can buy a portion of high-value assets such as property or even shares in fine art.

By combining creativity with discipline, young people can develop a portfolio that not only grows wealth but also reflects their values and goals.

Managing Risk While Being Aggressive

Taking risks is essential for growth, but reckless investing can backfire. Young investors should balance aggressive strategies with some safeguards, such as:

• Diversification – spreading money across different asset classes to reduce risk.

• Emergency savings – keeping at least three to six months of living expenses in cash.

• Investing only what they can afford to lose when it comes to speculative assets like crypto or start-ups.

• Regular contributions – investing consistently rather than trying to time the market.

This approach ensures that young Australians can benefit from high-growth strategies without being exposed to devastating losses.

The Long Game

Investing isn’t about getting rich quick—it’s about building wealth steadily over time. For young Australians, the focus should be on:

• Starting early – even small amounts compound significantly over decades.

• Staying consistent – regular investing beats sporadic big bets.

• Thinking long-term – ignoring short-term noise and focusing on future goals.

• Adjusting over time – gradually moving to safer investments as retirement approaches.

With discipline and patience, today’s young investors can set themselves up for financial freedom and security in the decades to come.

Final Thoughts

Different investment strategies suit different young Australians, but the most important step is simply to begin. Whether through shares, property, superannuation, or alternative investments, the key is to make money work rather than letting it sit idle. By being aggressive when young, taking calculated risks, and thinking long-term, young people in Australia can create wealth, financial independence, and opportunities for the future.