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Five Reasons Why You Should Start Investing Early

By Expert Author: Artham Vidya

Most people – at least three-fourths of the population and this is applicable globally – do not start building their wealth when they are young. When I say young, I mean when you are in your early or mid-twenties and when you have just started on your career.

There are some rare individuals who do it and those are the people whom we point out and say that they are successful. You may become an entrepreneur at a late stage in your life and then win world renown but I am talking about building wealth very what you earn.

Here we give you five compelling reasons why you should start speculating and accumulating as early in your life as you can. There is simply no reason for delay other than sheer laziness and lack of income is no excuse!
•The Power of Compounding: The earlier you start the more time your money gets to grow. The power of compounding is a wonderful invention wherein the interest you earn on a certain amount of money also accrues interest. So even if you are getting a 7 percent return on your investment, the compounding factor ensures that over more than three decades you get a sizeable sum of money – assuming you start saving and investing at the age of 25 and 60 is your target date.
•You can take some risks: When you start your investing early, you can afford to take some risk and put some portion of your money in equities. As all research and anecdotal evidence shows, stocks gives the highest returns over the long-term compared to any other asset. You can probably pick a few blue-chips put your money in them and forget about them for the next 20 years.
•You can course-correct: You will have ample time to revise and reassess your goals and your investment methods along the way. With time on your side, if you find that any of your investments are not performing according to your expectations, you can tweak and juggle around your money so that your returns are optimal and in line with what you require. Having limited time to achieve your goals also restricts your options in this respect.
•You can have several goals: If you put off saving and investing until late in your life then you will barely have time to focus on only a few financial goals. But with early investing, you can save for several goals. You can not only store funds for your twilight years but also for any education that you think you may need (for reskilling), any cherished holiday or travel you were planning, taking up some hobby and so on.
•You will get peace of mind: If you start off saving and investing in your early to mid-twenties, you will have accumulated a sufficient amount by the time you are in your mid-thirties. That will give you incredible peace of mind just knowing that there is all this money to fall back on. Even if you decide to leave your job and take a sabbatical, you have the luxury of doing that.

So don’t wait to become middle-aged before you start on your wealth creation. The time for it is NOW!

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