Why you should Invest Early

Why you should Invest Early

Starting to save or invest when you’re young doesn’t seem exciting and it’s why a lot of people don’t. It sounds restrictive, why should a young person prioritize the future when they can live for now? YOLO, right?

While this might seem boring or unnecessary, there are a number of reasons to start fine tuning your financial journey early. Here are a few benefits:

  1.  Time to learn and develop discipline

Cultivating the discipline to put away money for your goals is a bit easier when you first start earning money, than when you’re older and stuck in your ways. Don’t get me wrong, we still believe that you can break your habits even at an older age but if you’ve got the chance to build good money practices early, why not? You have more time to take risks and learn from your mistakes if any and develop a financial plan that works for you.

  1. Compound interest

Compound interest combined with time is what we call a life hack. With compound interest, you have the ability to double your money every so often, depending on the return you are getting. The longer you do this, the more returns you get, and so the more your net-worth grows. 

At the beginning, the returns from earning simple interest and compound interest look similar, but once you earn compound interest for some time, you start to see just how big the difference can be. 

So with simple interest you only gain interest on the principal (or initial) amount while with compound interest you gain interest on the principal amount as well as the interest it accumulates every year. If your interest is compounding every single year, that means the more time you give your investments to earn interest, the better. So the earlier you start, the more you make. Our financial management course, Your Roadmap to Wealth breaks this down so simply.

  1. Security and peace of mind

You’d be able to rest easy, go for that  vacay or splurge on yourself comfortably knowing that you’re already doing something to secure ‘future you’. You won’t have to worry about working to sustain yourself at an old age, you won’t have to depend on your children for your upkeep. You’d possibly even not have to worry too much if you lost your job abruptly. Your mind will be at peace when you know you’ve secured yourself.

  1. You get to set goals and work towards a given amount

We constantly advocate for starting with a goal(s) in mind. After that you get to calculate how much each of those goals cost. If you figure you need 1M to achieve a particular goal it might be difficult to acquire it all at once, so you can save bits of a given amount gradually. We have a compound interest calculator which helps you figure out how much:

  • You need to put away

  • Time you need to put away the said amount

  • You get at the end of the period you set for yourself

I once heard someone say, “Starting early might not seem fun, but it’s necessary”. If you want to learn more about how to get started and move beyond that, our course Your Roadmap to Wealth is a great place to start.  Get started today.

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