This 23-year-old earns $25,000 a year—here’s why he still invests as much as he can

Between driving for Uber and Lyft and managing a tax preparation office for part of the year, Jerone Gillespie expects to earn about $25,000 in 2020, before taxes.

Still, the 23-year-old has big financial goals: Although he doesn't contribute to savings on a regular basis, Gillespie aims to save and invest around $10,000 a year. He transfers money out of his checking account when he reaches a balance that's higher than he needs to cover his monthly expenses.

This year, he hopes to max out his Roth IRA. In January, he withdrew $8,500 from it to pay down his student loans before putting them in forbearance, leaving $4,500 in the Roth IRA account as of September. He also invests in individual stocks a few times a year and has about $13,200 invested between his Robinhood and Vanguard brokerage accounts. 

Despite keeping a tight budget, Gillespie makes investing a priority because he views it as a path to financial security. By putting money into the market, he's able to grow his income and build wealth for the future, he says. In fact, he's already seen it pay off.

Gillespie first started investing in college (he later ended up dropping out because the cost was too high) and put all of his extra cash into exchange-traded funds. "I wasn't just holding onto that money, but I was growing that money," he says. "And eventually, I used that money that was growing to pay down debt." 

Gillespie has the right idea: The earlier you put money into the market, the more time it has to grow and compound, especially if you're saving for a long-term goal, such as retirement. 

Plus, investing your money can help protect against inflation, which erodes purchasing power over time. Look at it this way: While a $20 bill will always be worth $20, what you're able to buy for that amount dwindles.

Many people think you need to reach a certain income level to be able to start investing. But as Gillespie exemplifies, you don't need to earn six figures to get started. Still, keep in mind that putting money into the market always comes at a risk and you should carefully research which option is best for you first.

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