If you think that you’re too young to worry about your financial future, then you are sorely mistaken. There are countless advantages to investing early and the best part is, it’s never too soon to start.
Keep reading to find out why you should start investing today.
- Risk and Recovery
The sooner you start investing the longer you have to recover from any poor investment decisions. As you grow older your risks tolerance tends to decrease because you have more to lose and less time to earn it back. Investing early gives you space to go for bigger risks with high return potential.
- The Beauty of Interest
Earning interest on your investments opens doors of opportunity. You can either reinvest the money to increase your earnings or use it as a secondary income stream. Either way, the sooner you invest, the earlier you’ll be reaping the benefits.
- Good Spending Habits
Investments serve as a form of positive reinforcement. As they grow, you experience joy and satisfaction, resulting in a desire to invest more. The only way you can add to your investments is if you have leftover funds after your monthly expenses.
This requires disciplined budgeting. If you don’t have good spending habits, you’ll definitely learn them as a means to increase your investment capital.
- Financial Freedom
Thanks to your early investing and new budgeting skills, eventually you’ll reach a point of financial freedom. You won’t have to worry about living paycheck to paycheck. Instead, you’ll be able to focus on planning your next holiday or investing in a new house.
- Early Retirement
If you invest a dollar a day into an exchange-traded fund, after 50 years you’ll have around $600,000. That’s true regardless of what age you start.
Those who start investing early can reap the benefits sooner than those who wait. This means you could be looking at early retirement, while everyone else you know continues to slave away at their regular nine-to-fives.
- Experience
Similar to developing good spending habits, early investing allows you to familiarize yourself with the intricacies of the investment world. You’ll be able to study different trading platforms and portfolio diversification methods.
For example, investing in gold. Some people buy gold online to use as a hedge against inflation. It’s one commodity that tends to hold its value even during fluctuations in the economy, cost of living, and global affairs.
- Lower Expenses
For most people, the younger you are the less financial obligation you have. There’s no mortgage, no car payment, no 3.5 kids to feed. But as your age increases, so do your financial responsibilities.
Getting in the investing game early allows your funds to continue growing, even when you might be struggling. So when you’re taking out that second mortgage to pay for kid number two’s college tuition, you’ll rest well knowing your investments are still working for you.
The Benefits of Investing Early
There are countless benefits to investing early. Not only does it produce good spending habits and increase your financial knowledge, but it allows for flexibility and security as you move forward in life.
For more information on managing your finances, check out some of our other posts.
