I disagree strongly with this article.

  > Even if the market roars, an investor can only make
  > so much with only $20,000. Even in a strong bull market,
  > they can make 20% to 30% a year, which is insignificant
  > to a young person.

Insignificant? I would be out-of-my-mind ecstatic at 20% returns. 20% of $20000 is $4000, which is (for most young adults) equivalent to several months of wages.

However, it's also dishonest to imply that 20% is at all realistic. 3-4% per year is more likely over the long term, and most young adults will see better returns from using the $20000 to pay off credit cards or student loans. Remember: $100 to pay off a 15% credit card is guaranteed 15% returns!

  > Putting money in the market means living with uncertainty.
  > Young people do not want to deal with that kind of stress.

What uncertainty? I don't care how much my stocks are worth today or tomorrow, because I don't plan to sell them for years (or decades). Some prudence is wise (such as not buying at the top of a bubble), but the only people I've seen get stressed out about the market are usually 1) invested in some dodgy get-rich-quick scheme or 2) planning to retire in a year or two.

  > Someone in their twenties should focus on their education
  > and other investments that will advance their career.
  > Altucher suggests taking classes, brainstorming ideas,
  > starting a website and attending networking events.

None of these require $20000, unless "taking classes" means "attending Harvard" or "networking events" means "week-long drug-fueled orgies".

  > It is also not a bad idea to have $20,000 cash in the
  > bank. It can provide a safety net and peace of mind
  > during a time when many are losing their jobs.

$1000? Definitely. $2000? OK, if you live in an expensive area. $20000? Waste of capital. Savings accounts have very low interest rates right now -- better to have your money working for you than being slowly eroded via inflation.

The best time to buy into a market is when the crazies are out in force. With all the goldbugs panting into their paper bags, and old white folks on medicare demonstrating against "socialism", there's probably no better time to buy high-quality stocks. Conversely, anything looking "bubbly" (gold, Apple, salesforce) is not worth touching with a 10-foot pole.