Investing strategies for 22yr old analyst in NYC

I'm a 22-year-old analyst just starting my career in NYC, and I'm looking for some advice on investing strategies that can help me grow as an individual. I understand that it's expensive to live in NYC as an analyst, and I may be a little too optimistic to even believe that I can save money, but I'm comfortable living an extremely frugal life. I've never really had money before, so I don't see "lifestyle inflation" coming into play.

I'm not interested in the typical 7% annualized returns that many people my age might settle for. Not yet at least. I'm willing to take risks as long as they can provide me with valuable experiences and help me learn more about the business world.

One idea I've been considering is investing in startups while simultaneously providing advisory services for those companies. I understand that this is a risky strategy and that I could potentially lose thousands of dollars, but I believe the experience I would gain from helping these companies would be invaluable. I also think that this could potentially lead to more lucrative opportunities down the line.

I'm curious if anyone has tried a similar approach, and if so, what guidelines you would recommend following to ensure that I don't screw myself over in my 30s and beyond. Are there any key factors I should consider when evaluating startup opportunities? How can I balance risk and reward in my investment portfolio? I'm open to hearing what you all have done when you were in my shoes and how that panned out. Is there anything you wish you did differently?

I appreciate any insights or advice you can offer. Thanks in advance!

 

Index and defined-benefit pension plans lol. Don't ever underestimate compounding the shit outta market returns starting from 22 years old to your retirement. You can set aside a portion of your portfolio that you can afford to lose on active management, but the literature heavily suggests otherwise lol

 

I totally understand the benefits of what you're suggesting, and it is definitely near proven to be the surefire approach to building wealth. However, at this stage in my career, I'm looking to explore different strategies that offer unique learning experiences. In essence, I want to invest in myself. Of course, I will ensure that I have a diversified portfolio and only allocate a portion of my investments towards riskier ventures. I appreciate your perspective.

 

Sorry, my phrasing was misleading. When I mentioned providing advisory services, I meant more along the lines of offering my assistance to startups on a voluntary basis, without any professional or official advisory role. In essence, I would spend a good chunk of my time a week adding whatever value I can. Once again, the end goal is to just be a little more knowledgeable within that vertical and to build experiences and a network to help me in my future.

 

One idea I've been considering is investing in startups while simultaneously providing advisory services for those companies. I understand that this is a risky strategy and that I could potentially lose thousands of dollars, but I believe the experience I would gain from helping these companies would be invaluable. I also think that this could potentially lead to more lucrative opportunities down the line.

This idea isn't bad because it's risky (which it is but that's not even the main problem). This idea is bad because you believe a startup founder would want to give up equity in exchange for advisory services from some dude who has literally no experience running a business or otherwise. The arrogance underwritten in this proposition is absolutely laughable.

 

I didn't mean for my post to come off as arrogant. Sorry for that. I fully acknowledge that my experience is limited. I don't know how to run a business yet. My intention was not to imply that startup founders would eagerly give up equity in exchange for my advisory services. I apologize for miswording it. Rather, I was interested in exploring the potential to offer my assistance and support to startups on a voluntary basis, without any formal or professional advisory role, while simultaneously investing a percentage of my savings into said company.

 
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I don't think the post as a whole came off as arrogant, and maybe that was the wrong word, but rather the propositions implications are arrogant for the reasons I explained.

I mean what you've said here is basically the same thing but I'll indulge you.

Have you considered 1. Assuming your new job is at a bank, this is an outside business interest, voluntary or not. You're basically taking a second job and that would need approval which may or may not be given. 2. Your goal here, as I understand it, ultimately is to increase your savings but nothing you've said here really indicates any movement towards a time/risk adjusted way to increase your savings. The thing with an index etf or whatever is there is no time opportunity cost. They cost can probably be assigned a $ value. Would you be better investing that time in simply increasing the earnings at your job?

3. If you're working an intense job in finance, how are you going to have time to invest in supporting a startup? Let alone presumably multiple startups, since statistically most startups fail and without diversification you may as well just go full on long NVDA calls and hope for the best. Then we could talk about time spent sourcing startups too...

I'm not saying you'll have no answer to these questions but have you considered them? This is a lot of effort to get someone to offer you what seems like an unpaid internship on the side of your job.

 

Above comments already flame you plenty for the silly stuff in the post.

It depends on how risky we're talking. Single equities is fairly risky. You could buy a bag in something and hold it. Could be a 5+year low like PYPL, could be a pre-COVID level low like RUN. It could be a quasi-thematic approach, e.g. "I think sports gambling will become even more popular". I don't think I'd dabble with options, but you could buy ~2 year LEAPs with a specific hypothesis (still for single equities) - buying longer-dated would offer less leverage, but protects better against theta decay. And if all that is still too low risk, there's always the bucket of longing s**tcoins. 

 

I appreciate your suggestions. While I understand that investing in the suggest options can offer potential returns, my interest in investing in startups and providing voluntary assistance stems from the desire to learn and grow in the business world. I see these opportunities as a way to immerse myself in the challenges and successes of early-stage companies, gain hands-on experience, and build connections within the industry. I understand that there are varying levels of risks in investments and that high risk tends to equal high rewards, however I'm not learning anything by investing in the latest crypto with no intrinsic value behind it.

 

Don't do anything you described in your post.

Best, actual advice:

Put between 80-100% of your money into 1 or 2 cheap index funds that track the market.

You can then consider the remaining 0-20% your "fun money" to invest, but I still wouldn't suggest doing anything too crazy with it.  You could use this money to invest in some individual stocks you like, or a specific sector you want to concentrate in i.e. an ETF focused on AI technology or Mexican manufacturing or whatever.  You can then track the performance of your fun money vs the market and learn what lead to over/underperformance, and you can chalk up any underperformance to the "learning experience" of making calls yourself. 

When you're actually rich and experienced you can get into more exotic things like VC/Angel investing but its not necessary, you can just keep the majority of your money in boring broad market index funds forever and you're set.

 

I’m a bit older than you but I’ve done something similar to this. While working decent hours and needing OBA approval. It’s doable.

I found 3 other like minded friends. We all chip in and invest together on various opportunities we see that we think (1) may make us some money, (2) help us learn, and (3) build our network.

We’ve bought multiple real estate properties, invested in financing a movie, invested in a few start ups, bought a whisky cask at its infancy from a distillery, etc. We even started a DAO during the NFT craze which was fun but not profitable in the end (but it opened super interesting doors)! In the start ups we invested in, we weren’t providing regular strategic advice but I definitely had multiple calls where I learned a ton from the founder and where he had questions he wanted to bounce off me given my background.

By doing the investing with friend, you can extract just as much learning and build your network but without having to contribute all the money yourself. You also will see more deal flow because you tap into your business partners’ networks as well. 

You won’t have amazing investment opportunities at first but as your friends (and friends of friends) grow in their professional career, you’ll be interacting with people who are starting a business or know somebody who is and they will make introductions if they know you are actively investing. You will hit a tipping point where cool opportunities are literally flowing in. Hopping on a phone call with your buddies to vet new deals while drinking a few beers is a blast for me.

Another cool aspect: we set up LLCs for our investments so we take group trips regularly for our “board meetings” and it’s a tax write off. The board meeting in a Vegas pool side cabana just hits different.

Don’t do it for this reason but the ppl I work with that know about my side hustles (in many cases, very senior buy side folks) are often super impressed.

Start slow and manage your expectations but you should definitely pursue this. But yes, as others are saying, also put a majority of your savings in boring index funds.
 

 

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