Early moves, big gains: why 25 is a financial sweet spot

IF you're 25 in 2025, you're in iconic company. The Sims, the Nokia 3310, and South Africa's original ETF provider, Satrix, all made their debut in 2000. One changed mobile phones forever. One taught us how to build virtual lives. The other? It changed how South Africans invest. Now, it’s your turn to pick your path and lay the financial foundation for the rest of your life. 25 is your golden gap to ‘get it right’ and start investing with intention.

- FIKILE MBHOKOTA

Why 25 is your golden age for investing

Twenty-five is a golden age to choose compound interest in assets, not in liabilities. It's that point where you're probably starting to work, so you'll have your own income, and you can make fundamental decisions that'll stand you in good stead for the rest of your life.

Don't “get a quick head start” by buying the most expensive car or house you can finance. If you get yourself into more debt at 25, you're going to be paying compound interest on that debt for most of your life.

But if you buy less expensive assets and keep your expenses lower, you can start growing your compound interest on investments instead - and reap the benefits.

Here's the math: If you invest R500 a month from age 25 at 10% a year (monthly compounding), youd have about R1.90 million by 60. Start at 35, and youd have about RO0.69 million by age 60.

To mark its 25th anniversary, Satrix pulled its data on 25-year-old SatrixNOW investors to see how they're approaching money - and where the gaps and benefits are. The picture shows both promising trends and missed opportunities: