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Money from selling old clothes could help young people get started investing, according to Lloyds Bank.
Research by the bank suggests its 18-25 year-old customers who use Vinted earn around £25 a month selling on the platform.
However, they also spend £45 on average, as it is tempting to reinvest the money they earn into purchases on the site.
Lloyds has calculated how much young people could earn if they took part of their Vinted earnings and invested them month by month.
Making money off of it: Reselling platforms allow people to make money off of items they don’t want.
A popular way to invest is to deposit a regular amount each month and hopefully watch the money grow over time.
Manuel Pardavila-González, investment director at Lloyds Bank, said: ‘Being able to set aside an affordable amount like £20 a month will help kick-start an important part of investing: creating the habit.
‘We can see from the increase in the number of 18-25 year olds opening trading accounts with us over the last year that there is an appetite to start achieving their financial life goals, such as owning a home or trying to grow their savings.’
“I would consider investing my money in Vinted”
This is certainly the case for one Vinted user, Jay McCondichie, a 23-year-old from Glasgow.
Much of the money she earns from sales is used for purchases on Vinted.
She said: ‘I would probably buy more stuff on Vinted with the balance I would get from clothes, or transfer it to my bank account and probably buy something new with it.’
Ready for the next step: Jay, 23, says she wants to start investing
However, she now looks to the future and sees how investing some money could help her achieve her goals.
Jay said that after launching her own personalized gift business, Mint Bleu Designs, in 2021, much of her money went toward startup costs, which prevented her from investing.
Now that the business is self-sustaining, Jay wants to start investing in the future and says the money he makes from Vinted could be a good place to start.
“Nowadays it’s very easy to make some extra money on Vinted by buying things you don’t use,” said Jay.
“With the money I make from Vinted, I should start saving. The extra money definitely adds up and could go towards something big like a new car, a deposit on a house, travelling or even starting another business in the future. It really seems like a no-brainer.”
“I have a certain shopping habit. I buy a lot of clothes. With all the clothes I have that I don’t wear, selling them on Vinted would make me quite a bit of money.”
A common problem is that young people do not know where to start investing or believe that it involves high costs.
Two-thirds of under-25s believe the costs of investing make it expensive, Lloyds data shows, while 34 per cent said they don’t know enough to get started.
Those interested in investing with an online account can read This is Money’s guide to the best do-it-yourself investing platforms.
Lloyds offers an ‘Invest Wise’ account, which allows regular investments free of charge for people under 26.
“It never crossed my mind at the time,” Jay said. “But now, looking back, I wish I’d done it a lot sooner. When I was younger, I didn’t think about any of it, I just spent my money.
“It’s simply a matter of not knowing what type of account to open or not knowing what savings accounts exist in order to do it correctly.”
Like many others, you keep money in a savings “folder” in your banking app, but you worry that you aren’t getting the benefits you could get elsewhere.
How much could you earn from Vinted earnings?
Based on historical economic data, Lloyds said someone who starts investing £20 a month at age 18 could find themselves with £3,460 by age 28.
This represents a profit of over £1,000 on his total stake of £2,400.
If we increase this to £50 per month or £100 per month, the investments could grow to £8,651 and £17,302 respectively over the 10-year period.
Today’s 18-year-olds could earn £61,892 by investing £100 a month until age 40, which would earn them almost £14,000 more than their initial investment.
It is recommended that investors leave their investments alone for at least five years, to weather the ups and downs of the market, and this may be easier to do for those who start early in life.
Pardavila-González said: ‘It’s wise to think about leaving the cash you invest for at least five to 10 years, so starting earlier gives people more time to make their money work harder, while also building confidence and learning more about investing if they want to make more decisions for themselves.
‘Seeing how small an amount may seem when you reach your twenties could make your goals much more attainable, but remembering that it’s a way to save for the long term is important no matter when you start.’
By investing over a 22-year period, up to age 40 for current 18-year-olds, Lloyds said young people could earn £61,892 by investing £100 a month, earning almost £14,000 more than their initial investment.
Those who invest £50 a month could earn £30,946, while those who save £20 each month would see their investments rise to £12,378.
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