Investing Specialists

An Investing Road Map for Early Career Accumulators

Christine Benz

Because they're just starting out, early career accumulators--loosely defined as people in their 20s and 30s--don't typically have much in the way of financial capital (unless they're technology savants or supermodels, that is). Not only are their earnings often low relative to where they'll be in the future, but new college grads may also be digesting college debt.

But early career accumulators have other assets that their older counterparts can look upon with envy. With a whole lifetime of earnings stretching before them, early career people are long on what investment researchers call human capital: Their ability to earn a living is their greatest asset by a mile. Investors in their 20s and 30s have a valuable asset when it comes to investing, too: With a very long time horizon until they'll need to begin withdrawing their money (for retirement, at least), early career investors can better harness the power of compound interest. They can also tolerate higher volatility investments that, over long periods of time, are apt to generate higher returns than safer investments.