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Why Should You Start Investing Early?

Why Should You Start Investing Early?
Why Should You Start Investing Early?

It can be easy to focus on the short term and ignore the long term, especially when you’re young and trying to have fun with your money. But it’s important to remember that time is your friend when it comes to investing – if you start early, investing your money will reap far greater rewards than if you invest later in life. Here are three reasons why you should start investing early.

Starting Financial Freedom earlier

If you’re able to start investing early, you might be able to hit your financial goals earlier in life—and have more time to enjoy them. If you are able to build up enough wealth in your 20s or 30s, you can be financially independent by your 40s or 50s. Not only will you have all of that extra time on your hands, but if you’ve managed to save enough, no one can take away what you worked so hard for. What a relief!

Don’t miss out: The sooner you get started with a savings plan and a diversified investment portfolio, the more opportunities you’ll have to make money over time through compounding. This means interest on interest. The longer you hold investments and make contributions each month, investors get wealthier faster than ever before.

Accumulating Wealth Early as Possible

Some people say that they don’t have enough money to invest—and even if they did, they wouldn’t want to risk it on stocks and bonds. But here’s something to consider: If you put off investing until you have a substantial amount of capital—say, RM50,000 or more—you will miss out on years of potentially substantial returns. That can have a serious effect on your long-term net worth. The sooner you start saving and investing, even with just a small monthly contribution, the sooner you build up equity in your portfolio. And remember: Saving isn’t everything—investing is key!

Early Retirement earlier and with ease

It’s a common misconception that you need to be rich in order to start investing. That couldn’t be further from the truth—you don’t even need to have an income in order to invest. In fact, there are plenty of ways to begin investing early and begin accumulating wealth so that when you do enter retirement you can leave behind a nest egg big enough for you and your family.

Here are just a few tips on how to get started. First off, make saving automatic. This means having some sort of scheduled contribution into an investment account taken directly out of your monthly salary. Even RM50 per month makes a difference over time—and you won’t even miss it when it’s gone!

Next, be patient. Yes, your future self will thank you later—but in today’s world of instant gratification and quick results it can be hard to remember that little investments done over time add up to big returns. Finally, don’t put all your eggs in one basket.

Contributors
Don Chew
A CFP holder with an engineer's mind with interest in technology, design, innovation and of course, personal finance. Believes design and automation would solve most challenges in our everyday lives. A hobbyist videographer but still far from being even a beginner. Life principles - Joy.