Ask HN: How can I use money to make money?

By far the best investment you can make is to upgrade your earning potential. I run a software consultancy and I could easily employ someone who specialized in writing software tests or a release engineer at 7x your current wage (these are unglamorous but ultimately not had things). Making 7x per hour changes the income and wealth equation dramatically. You could literally self teach both of those areas in 6 months. Two books from the library, free gitlab account, fork 2 open source projects, implement test suite, begin writing tests. Start submitting pull requests upstream when you get good.

80% of software companies can benefit from work in those two areas and they provide more value than they cost so there’s effectively infinite work.

If that field doesn’t appeal to you I’d suggest starting a business. A recent study of people who earn more than a million a year (maybe posted here two weeks ago?) has shown that it’s primarily business owners. Typically in boring, but very established value areas, typically with a local monopoly. Things like car dealerships, auto repair. The article (which I can’t find right now) also mentioned “marketing research”? which baffles me.

A clever person could learn a lot in the library over a weekend about starting and operating a business, about choosing a good business to start (businesses without a lot of competition, but a solid customer base are good. I’d choose one that will still work in an economic downturn)

Beware the taste for the expensive lifestyle. It’s easy to creep by degrees to a lifestyle beyond your means. If your expenses exceed your income it doesn’t matter how much money you make, you’ll be in debt to you reverse it. I’ve lived both ways and can tell you low expense is the only way to go.

I agree with your comment from top to bottom and I am actually in the process of learning some sort of marketable CS based skill set… cybersecurity seems right up my alley and it’s only getting more important to secure infra against cyber attacks, so those people will paid very well I reckon!

At 20 years old, you don't need to invest, you need to level up.

Yea that feels like a stretch tbh

I recommend the book "The Wealthy Barber." It breaks down the basics of personal investing - it's a great place to get started.

There's a rule of thumb that says if you have a compounding interest rate, you can divide 72 by your interest rate to get the number of years before your investment doubles. (So if you're getting 7.2%, your investment doubles in 10 years.) Also, financial planners often use 7% as a rough estimate of the average returns you'll get from a well-balanced portfolio of mutual funds.

So, again: that's roughly doubling every 10 years. So run a few scenarios in your head, and you'll see how that can pay off big time. $2,000 a year now means $20,000 when you're 30, doubling to $40,000 (at 40), $80,000 (at 50), $160,000 (at 60), and $320,000 at 70. All that from $2,000 a year for 10 years. [Which, actually was also compounding even higher between ages 20 and 30.]

And there's two obvious ways to kick that up. If you do the investment in a retirement account, it's pre-tax dollars. (So the $1,000 you're investing only means giving up about $750 of your post-tax income.) Best of all, you can withdraw it early without penalty for tuition, a first home purchase or medical emergencies.

And if your employer ever offers a match to your retirement contributions, take it. It's free money they're offering you.