Financially sharp youngsters are venturing into a range of money-spinning activities to source additional cash to supplement their incomes.

While some youth find it hard to manage their finances, others are exploring exciting tech-driven startups, online businesses and other investment opportunities to build a nest egg.

This growing trend, especially among the young urban generation, is certainly a positive sign towards securing financial freedom.

Young people can divert non-essential expenditure towards productive investments that could result in extra income and build a strong and sustainable financial plan.

Among all the investment instruments available, investing in stocks could be a viable option as it can be pursued with little capital.

Here are five reasons why young people should invest in the stock market.

Sustainable passive income

The primary advantage of stock investment is the provision of passive income to investors. Passive income refers to a source of income that does not require active involvement.

Since it is not required to manage the business operations of the companies you own shares in, any income obtained from stock investment is termed passive earning. They can be capital gains or dividends.

As long as you invest in stocks with high potential and growth, you will likely receive sustainable passive income.

By doing so, you may obtain additional sources of income without putting in too much time and energy.

Ease of getting started

Starting a first stock investment is not at all a challenge as it requires very little capital.

People tend to believe a lack of capital is the main barrier to investing.

However, that is not the case when it comes to the stock market. At the Cambodia Securities Exchange, the minimum order quantity is one share and prices range between around 2,000 riel to 15,000 riel per share.

The process of opening a trading account is simple, nor does it require a minimum deposit.

Firstly, an investor ID is needed, which can be obtained through an online application on the Securities and Exchange Regulator of Cambodia’s website.

Next, with the investor ID, you can open a trading account at any of the 11 securities companies that are members of the CSX.

Lastly, you can place your first order by depositing 100 per cent of the order value plus commission.

Technological know-how also facilitates youth investment. At the CSX, investors can trade stocks on their smartphones or tablets with the Mobile Trading System (MTS).

Technology has also made investing more transparent by allowing faster access to disclosures, which aids conducting market research – an important part of investment decision-making.

Youth are quick learners

Youth could turn savings into an extra source of income through prudent investment by using their ability for learning quickly and courage to take risks.

People tend to believe stock investment is a challenge because it demands lots of understanding before coming to a decision.

But young people generally adapt quickly to new knowledge and have a willingness to try new things.

And such abilities can enrich their skills, especially acquiring the key strategies that lead to high returns.

Participating in the stock market can also enable youth to understand more about finance.

By regularly reading the published financial reports of listed companies, they can learn to increasingly manage their financial plan effectively.

Time to succeed

Having time and a willingness to face obstacles is a recipe for success.

Although it requires some time to deeply understand the stock market, young people have plenty of this on their side to gain experience and learn from mistakes.

They will likely eventually formulate strong strategies to earn profits over time.

Youth a catalyst for growth

Young people have a key role in the country’s economic development.

Like other top sectors, securities have been a priority sector in driving the growth of the Cambodian economy.

The current fruitful development of this sector depends largely on the direct and indirect participation of young people, through being investors in the market and sharing stock market-related knowledge with the public.

For instance, the majority of those in attendance at events organised by the CSX are young adults.

However, compared to other countries, the percentage of youths joining the stock market is still limited in Cambodia.

Therefore, in order to make this growing sector develop strongly and sustainably, the participation of young peopleand the strengths they can bring is essential.

Contributed by: The Cambodia Securities Exchange, Market Operations Department

Email: [email protected]

Tel: 023 95 88 88 / 023 95 88 85

Disclaimer: This article has been compiled solely for informative and educational purposes. It is not intended to offer any recommendations or act as investment advice. The Cambodia Securities Exchange is not liable for any losses or damages caused by using it in such a way.