Many people don’t plan out their investments unless they have financial stability or a secured job (theoretically). In this article, we are going to discuss the benefits of an early investment even if the salary is low or the job is not the desired one. You should not wait till you get your desired job. Many young adults think that they will make up for the lost time and money when they get a secured job but on the contrary, they end up saving less than planned as the spending goes up.
Early investment will put you in a cycle of financial planning and slowly and steadily it leads to a habit of saving and not spending the entire amount. It teaches you the difference between investment and savings.
Let us understand this with the help of an example- Mr. A has 1000rs in college while Mr. B has the same amount. Mr. A invests the money in mutual funds or for that matter in long-term stocks but Mr. B puts the money in his locker. When Mr. A will come out of college that money might have become more than the principal amount while the savings of Mr. B remains stagnant. This is financial planning and a careful and safe investment.
With an early investment, you can avoid losses too. Suppose, you invested somewhere and you incurred a loss, you will be able to make up for it. But when you start investing late, chances of a setback are enhanced.
Early investment leads to more savings as you will cut on unnecessary expenditure for investment money as it reaps benefits in the long run. A bird whose load is light can fly higher and farther. Tons of individuals skip investing or saving due to commitments or responsibilities they have.
As you get older, your responsibilities will increase, so do your expenses. On the opposite hand, a younger person is free from such burdens. This may allow one to save more and invest more. You’ll also possess the power to take higher risks, which can ultimately fetch you a far better return.
The power of compound interest can be experienced only when you re-invest the interest without spending it. In early age investments, you have that means to re-invest the interest but in older age investment you often withdraw the interest to fulfill your financial demands.
To conclude, saving and investing at an early age will give you the lifestyle you want to have. It will enhance financial stability and responsibility. Start early for a secured future and a secured retirement.