One of those things that we put off till "someday" is investing; perhaps you'll discover the ideal time in life to make the investment, or perhaps you won't have enough money to invest now. Perhaps you're delaying investing until after you've paid off your school debts or make your first home purchase. (Photo : by Mathieu Stern / Unsplash)
One of those things that we put off till "someday" is investing; perhaps you'll discover the ideal time in life to make the investment, or perhaps you won't have enough money to invest now. Perhaps you're delaying investing until after you've paid off your school debts or make your first home purchase.
In actuality, this is the finest moment of your life to begin investing. Rather than viewing investing as an ideal destination you could reach in the future, it's preferable to approach it as a financial habit, similar to paying your bills.
You will earn more the longer you keep your money invested. Therefore, investing now is preferable to waiting. You are losing money by delaying it. The phenomenon known as compounding returns is to blame for this. In short, compounding returns allow your money to increase more quickly over time by allowing you to get income on your initial investment and any further profits it makes.
In short, compounding returns allow your money to increase more quickly over time by allowing you to get income on both your initial investment and any further profits it makes. Assuming an 8% interest rate, investing $1,000 and making $100 monthly contributions for 30 years, for instance, would yield about $160,000.
Let's now examine the identical situation, except this time we wait five years to begin. That identical investment is just slightly more than $102,000 after 25 years. The just five years that we did not invest make a significant effect.
Investing today extends the growth and compounding period of your money. Use a basic investing calculator to determine the exact influence that time might have on your financial success. Seeing what you can do may be inspiring and enjoyable.
Another proven strategy to outpace inflation is to invest. Every time we shop at the grocery store, we all experience the diminishing value of our money. This particularly applies to money that is kept in our savings or checking accounts. Your money will increase faster than inflation if you make it work for you by investing it. Over time, your purchasing power increases with the earlier you begin investing.
Start seeing investing as a "right now" financial habit rather than as a goal for "someday." When the time comes for you to retire, even a small monthly contribution of $50 to your assets can add up.
Consider treating your investments the same as you would your insurance, phone, and energy bills: as something you budget for and pay for first, you should also save for your other financial objectives. Establishing this beneficial practice now will pay you handsomely in the future.
The content provided on MoneyTimes.com is for informational purposes only and is not intended as financial advice. Please consult with a professional financial advisor before making any investment decisions.
