For many young Australians, the thought of investing can feel overwhelming. With so many options, risks, and financial jargon, it’s easy to delay starting altogether. But here’s the truth: the earlier you start investing, the more powerful your money becomes thanks to compound growth. Even small investments today can grow into a significant sum in the future.
This year offers exciting opportunities for young investors to start building wealth. Whether you’re working your first full-time job, saving from side hustles, or simply looking to grow your money wisely, the following seven investment choices are some of the most practical and promising. Each comes with clear examples, simple calculations, and key takeaways to help you decide what fits your goals best. Let’s check 7 of the best investments young Australians can make this year.
7 of the Best Investments Young Australians Can Make This Year
1. Superannuation – Your Retirement Powerhouse
Superannuation, or “super,” is often overlooked by young Australians, but it’s one of the most powerful long-term investments you can make. By law, employers must contribute 11% of your salary into your super fund, and this money grows tax-effectively until retirement.
Why It’s Great for Young Australians
- Contributions are automatic from your employer.
- Tax on super earnings is lower than personal income tax.
- The earlier you start, the more compounding works for you.
Example Calculation
Imagine you’re 22 years old, earning $60,000 a year. Your employer contributes 11% = $6,600 per year. If your fund grows at 7% annually, here’s what happens if you make no voluntary contributions:
- After 10 years (age 32): ~$91,000
- After 20 years (age 42): ~$266,000
- After 33 years (age 55): ~$750,000
That’s three-quarters of a million dollars without lifting a finger! If you added just $50 a week voluntarily, you could increase your retirement savings by hundreds of thousands more.
2. ETFs (Exchange-Traded Funds) – Diversification Made Easy
ETFs are like a basket of investments (shares, bonds, or commodities) bundled together and traded on the stock market. Instead of betting on one company, you own a slice of many, spreading out risk.
Why It’s Great for Young Australians
- Affordable entry point (some ETFs let you start with as little as $500).
- Diversification across industries and countries.
- Lower fees compared to many managed funds.
Example Calculation
Suppose you invest $1,000 in an ETF tracking the ASX200 index at $50 per unit, meaning you buy 20 units. If the ETF grows by 8% annually, after 10 years your investment would grow to about:
$1,000 × (1.08^10) ≈ $2,159
That’s more than double your money, without having to pick individual stocks.
3. Index Funds – Low Fees, Big Impact
Index funds are similar to ETFs but structured differently (you often buy directly through the fund manager, not the stock market). The major benefit? Very low fees, which makes a huge difference over time.
Why It’s Great for Young Australians
- Passive management keeps costs down.
- Consistent returns by tracking an index (like S&P 500 or ASX200).
- Great for “set and forget” investors.
Example Calculation
Let’s compare fees:
- Index Fund Fee: 0.2%
- Managed Fund Fee: 1%
If you invest $5,000 for 20 years at an average return of 7%:
- With 0.2% fee → final balance = ~$19,580
- With 1% fee → final balance = ~$17,520
That’s a difference of over $2,000, just from fees. Imagine the difference on larger amounts!
4. Equities (Individual Stocks) – Higher Risk, Higher Reward
Buying shares in individual companies gives you direct ownership and potential dividends. It’s riskier than ETFs or index funds, but young investors can afford to take some calculated risks.
Why It’s Great for Young Australians
- Potential for higher returns.
- Dividends can provide regular income.
- Opportunity to learn how markets work.
Example Calculation
Suppose you invest $500 in Company A at $5 per share, giving you 100 shares. If the company grows by 10% annually, after 5 years your shares would be worth:
100 × $8.05 = $805
Plus, if the company pays a 3% dividend each year, you could also earn around $75 in dividends over 5 years.
5. Property (Including Fractional Investment) – Building Wealth Through Real Estate
Real estate is a classic wealth-builder in Australia, but rising house prices make it difficult for young people to enter. Fractional investment platforms like BrickX now let you invest in small shares of property for as little as $1000.
Why It’s Great for Young Australians
- Exposure to the property market without huge capital.
- Rental yields provide passive income.
- Property values generally rise over the long term.
Example Calculation
You invest $1,000 in a fractional property. If the rental yield is 4%, you earn $40 per year. If the property value also rises by 3% annually, your total return is 7% per year, turning $1,000 into ~$1,967 in 10 years.
6. High-Interest Savings Accounts & Term Deposits – Safety First
For those who want low risk, savings accounts and term deposits are great. While returns aren’t huge, they’re guaranteed and provide a safety net.
Why It’s Great for Young Australians
- Guaranteed returns.
- Flexible savings account options or locked-in term deposits.
- Great for short-term goals (e.g., buying a car or holiday).
Example Calculation
Deposit $2,000 in a savings account at 4% interest compounded monthly for 3 years:
Future value ≈ $2,249
If you instead put $2,000 in a 3-year term deposit at 4.2% simple interest, you’d earn:
$2,000 × 0.042 × 3 = $252 → Total = $2,252
Both give similar results, but savings accounts give you access to your money anytime.
7. Cryptocurrency – High Risk, High Reward
Cryptocurrency is one of the most talked-about investments. It’s volatile, but with proper caution and small allocations, young Australians can experiment and learn.
Why It’s Great for Young Australians
- Potential for very high returns.
- Opportunity to learn about blockchain technology.
- Can start with as little as $10–$50.
Example Calculation
If you invest $100 in Bitcoin when its price is $50,000, you buy 0.002 BTC. If Bitcoin rises to $100,000, your investment doubles to $200.
But beware: if it falls to $25,000, your $100 becomes just $50. That’s why it’s best to treat crypto as a small side investment, not your main wealth-builder.
Conclusion
Investing young is one of the smartest financial decisions you can make. From superannuation to cryptocurrency, each option has unique benefits and risks.
- Super grows quietly in the background.
- ETFs and index funds offer long-term stability.
- Stocks and property give bigger growth opportunities.
- Savings accounts protect your money.
- Crypto offers excitement (but with risk).
The golden rule? Diversify. Don’t put all your money into one basket. A mix of safe and growth-oriented investments will give you both security and potential. And remember, the earlier you start, the more your money works for you.
Before making any decisions, consider speaking with a licensed financial adviser to tailor strategies to your goals.