Have you seen that news about the 28-year-old millionaire who wasn’t born into wealth but has managed to amass so much wealth? Was he or she as impressive as the 25-year-old millionaire?
It seems everywhere you look someone is defying the odds and cracking the millionaire egg quickly.
If that has got you wondering whether you should start investing and why. Read my reasons to know why!
The early bird gets the worm.
1. The Earlier You Invest The Richer You Get
Thanks to the power of compound interest, surveys have shown that the earlier you invest the richer you get.
Compound interest in simple terms is ‘money making money’. Compound interest is when the interest you earn on your investment is reinvested and earns you more interest.
For this to happen first you need to invest and secondly, you need to invest early so your money has enough time to make more money. The earlier you invest, the earlier your money can start making money, and the longer that money can make more money.
The longer your money can utilise the power of compound interest, the bigger your gains will be as time goes on.
Money grows with time!
2.You Develop a ‘Wealth Habit’
It takes as much as 254 days to form a new habit and an average of 66 days for the new behaviour to become automatic.
The earlier you start saving, the sooner you develop a habit of saving and investing more.
While in the beginning, it will hurt to save, it will soon start to become second nature and, you will be surprised at how well you get at cutting down unnecessary expenses over time.
According to Psychology Today, habits that develop early in life can be very difficult to change which is good news for investing as this is a habit to maintain.
3.You Get Time to Ride Out the Waves
Firstly, at an early age, you are better able to take on high-risk investments which provide higher chances of return.
Secondly, investing at an early age provides you with better peace of mind should a loss occur, as you have more time to make up for the loss of investment.
Most investment funds suggest you invest for a long time not only so you can take emotions out of the equation and sleep better but to allow market volatility to iron out in your favour.
If you invest at a later age, close to retirement and, the stock market was to take a downward turn close to your retirement age you might still be forced to take out your money at a loss since you need it for retirement. Whereas if you were in your 20s or 30s you will feel more comfortable leaving the money in and waiting for the market to recover.
This brings us to the next reason to retire early….
4. You Get to Retire Early or Choose To Work Rather Than Have To Work
Imagine having to work well into your 60s because you need the money.
Now, imagine working in your 60s on your hobby because you choose to rather than have to. Imagine having the opportunity to retire early. What could you do with your time?
Saving and investing at an early age can make this dream a reality.
If you start to invest early, you secure your future well into retirement.
5. You Feel Empowered
The decision on where to invest is one of the most empowering decisions ever. It puts you in control of your future.
Investing at an early age empowers you now and at a later stage in life. You are better able to get through the tough times without having to worry about where you can urgently borrow money to meet unexpected expenses.
A creditor (i.e., someone who has money to lend to others) feels more empowered than a debtor (someone who borrows and is in debt).
Don’t wait until you make more money to invest. Don’t get around to investing someday’ start now, start early, and grow your wealth.
When I think back to why I started investing, the opportunity to get richer, retire early, and feel empowered stick out for me. What’s your reason to start investing now?
*This is not financial advice. Do not consider this blog to be a substitute for obtaining advice from a qualified investment advisor. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional*
