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.

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), you’d have about R1.90 million by 60. Start at 35, and you’d have about R0.69 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:

• RAs are rare: Just 0,87% of 25-year-old Satrix investors have Retirement Annuities. These account for only 0.45% of total net asset value (total value of all investments held by 25-year-olds).
• TFSAs are popular but underused: 33% of these 25-year-old investors have Tax-Free Savings Accounts, but of those, more than half (53%) only hold a TFSA and no other investment accounts on the platform. TFSAs make up 20.6% of total NAV on the SatrixNOW platform.
• Flexibility dominates: the bulk – 78.93% of NAV – is in SatrixNOW accounts, showing a strong preference for liquidity over locked-in retirement products.
• Top investment choices: Their top choices include Satrix Top 40 ETF, Satrix S&P 500 ETF, Satrix MSCI World ETF, Satrix Nasdaq 100 ETF, and the Satrix Money Market Unit Trust, across both SatrixNOW and TFSA accounts. This shows an interest in local and global investing, and mostly aggressive risk profiles.

The numbers reveal a clear trend: They know about efficient investment vehicles, but they’re not yet comfortable with the inflexibility of RAs. It’s critical that 25-year-olds start shifting into long-term thinking – that means balancing flexible investments with products like RAs for retirement, avoiding high-interest debt, and making consistent contributions to assets that will grow over decades.

Top moves for making the long-term shift

1. Pick purpose over impulse.  If you don’t have a goal for your money, it’s easy to just consume it. Decide upfront what you’re working towards – whether that’s a home, early retirement, building wealth, or financial freedom – and make every rand work for that purpose.
2. Start an RA early. An RA has very good tax benefits. You can take that tax money you get back and reinvest it. That’s how you grow your money faster. And the earlier you start, the more powerful compounding becomes.

1. Use ETFs as your starter pack.  ETFs are transparent, simple, and they give you diversification in one investment vehicle – locally or offshore. They’re also affordable. Costs can eat into your returns, so this matters.
2. Automate your investing. Set up a debit order so your investing happens before you can spend the money. Once you start seeing your money grow, you’re hooked.
3. Join or start an investment club. You don’t have to do this alone. Learn with other people. Empower each other.

Find A Money Mentor

We need to normalise financial guidance in the same way we do career advice. Everybody’s looking for career mentors, but if you’re not investing and saving, you’re not progressing from a wealth perspective. We should have money mentoring as much as career mentoring. Ask someone senior in your company who has grown wealth whether they’ll share their investment strategy and how they implemented it. When you see their results, it clicks.

Why 25 is the age to set yourself up for life

At 25, you have the rare advantage of time – and time is the single most powerful driver of wealth. Start early, and you give compound interest decades to work in your favour.

Avoid the trap of high-interest debt. Keep your living costs manageable. Invest consistently. And learn from others who’ve done it before.

* Mbhokota is the CEO of Satrix.

PERSONAL FINANCE