Start Investing in Experiences During Your Youth

Economists and psychologists alike agree: the earlier you invest in experiences, the greater your lifetime payoff. Known as the time-value of experiences, this principle parallels our financial understanding of compound interest. In youth, when your horizons are wide and your health is prime, even modest outings—like a Friday night jam session or a weekend festival—seed high returns in lasting happiness. A Stanford study once observed young adults who tried four new activities in a month reported higher life satisfaction years later than peers who saved their adventures for retirement.

Those compound benefits accrue as memory dividends and social capital. When you’re 20, a $50 camping trip shared with friends can become a cherished story retold at weddings and reunions. By contrast, the same trip at 70 may be physically daunting and memorable only for its discomfort. Researchers call this phenomenon front-loaded utility: experiences deliver maximum enjoyment and personal growth when taken early.

Realizing this, savvy young people set aside time (and modest funds) to explore. They don’t wait for a windfall—they capitalize on the abundant free time and flexibility youth affords. In doing so, they build a robust repository of vivid, joy-packed moments that will continue paying emotional dividends for decades.

You have more time and fewer strings on it right now, so pick two budget-friendly adventures—maybe a night hike or an art stroll—and plant them firmly in your calendar for the next month. Invite a friend to join, and treat the outing like a seed you’re planting for your future happiness. Book those slots and watch your memories compound.