The types of companies that make up your portfolio in your 20s will be vastly different from those you seek later in life. In your 20s, you generally have a long-term investment horizon, few commitments and will be able to absorb more risk into your portfolio given you have around 40 years until you wrap up your working career.
Young and adventurous, you may be more comfortable venturing into companies that carry higher risk, but also have big growth potential to multiply your starting capital. Your dad might call them speculative, but here are three companies with big growth potential to consider buying in your 20s.
Silver Lake Resources (ASX: SLR)
Shares in Silver Lake Resources has been savaged since the price of gold started falling late last year. Shares in the company are down 78% on 12 months ago, while the price of gold has dropped just 22%. The company is among the lowest cost producers in Australia and has potential to ramp up production if the gold price starts to rise.
Investors in their 20s have time to ride out gold's counter-cyclical slump and could be well rewarded.
Wotif.com (ASX: WTF)
If you are in your 20s you are the Facebook generation, the tweeters and the hash-taggers. You don't think twice about booking a holiday yourself on your mobile and you probably get a sly laugh at Wotif's ticker code.
Wotif.com has doubled revenue since 2007 and despite seeing a slowdown in the last year is set to refocus on the huge Asian market. It doesn't hurt that the company is a bit of a cash cow, delivering a dividend yield of 5.2% to help you grow your portfolio.
Senex Energy (ASX: SXY)
The fast-growing Cooper Basin oil producer has an ambitious growth plan that involves drilling up to 30 wells this financial year. The company's oil production is a very high-margin earner and will be Senex's means of funding its move into natural gas, which is more capital intensive. Senex has no debt, reducing risk, and trades at a price to earnings ratio of around 15, which I feel heavily understates its growth potential.
Foolish takeaway
Retirement may be a distant thought during your 'roaring 20s', but starting out small with a portfolio that includes prospective growth companies with limited downside could be the beginnings of your future nest egg.
