aIn the mid-20s, when people start with their first job, the salary is not something extraordinary. With that salary, people have to manage their rent, living cost, daily expenses, etc. However, it is always said that in terms of investment, the earlier, the better. So, it is said that the responsibility of the parents is to initiate the investment process in the minds of the youngsters as soon as they reach their 20s.
Many might wonder why investing early is advised. One of the many reasons one should start investing early is at a young age; the last thing that youngsters of that age consider is investing and saving. That is where they go wrong. Given below are some solid reasons why everyone should start the investment process early.
- Be able to take higher risks
One of the most significant advantages of being young is taking more risks at a younger age. Further, at a young age, familial and financial responsibilities are less. Therefore, one gets to invest a good share of the money. Even if there is a mistake in the investment process generated at a young age, people get ample time and opportunity to rectify it.
- Early investment improves spending habit
At the young age of 20s, youngsters tend to spend more on the fancy items they have been eyeing since childhood. It is okay to fulfill dreams but not at the cost of one’s future financial security. Starting to invest early means a person does not get the scope to turn into a spendthrift.
- Enjoy the benefit of compounding
The advantage of enjoying compound interest on an invested amount of money is undeniable. Undoubtedly, money invested in compound interest is much more than the one that calculates simple interest. For example, a person saves Rs. 4 crores for his retirement. If a person starts investing Rs. 6000/- each month from the time he is 25 years old, he will get Rs 25 lakhs at the end of 35 years. But, if he delays the process and starts investing when he is 40 years old, his per month investment value will increase to Rs. 40,000/-.
- Gather a larger share of money for more prolonged investment
Since the money invested at a young age is calculated in the compound interest for a longer tenure, one gets accumulated over the years. Let us discuss an example to understand this point better. If a person starts investing Rs. 6000/- each month when he is 25 years old, after the end of 35 years, he can expect to get a lump sum amount of Rs. 4 crores.
- With longer investment tenure, the amount can be small
As has already been mentioned, the earlier one starts, the lesser amount one will have to invest every month. A youngster aged 20 to 27 years can’t invest a chunk of money from his salary. Start with small amounts and eventually increase the investment value with the salary increase.
Conclusion
Therefore, it is undeniable that investment is a significant process of human living that can produce better results if initiated early. Do not delay much. Start investing today.
