5 Benefits of Investing at a Young Age


When you start to pay attention to your money and finances, the rewards are very clear — you begin to build up significant assets and personal wealth.

[font family=”georgia,palatino” size=”22″ color=”350BDE” textshadow=”0″ alignment=”center” weight=”bold” style=”normal” lineheight=”110″]Just think about it, when successful investors are asked about any regrets they have in their finances, many reply that they wish they had started sooner.[/font]

And there are a number of great reasons why you as a young professional should concentrate on your personal wealth creation by investing early.

Here are five clear benefits of starting at a young age on the solid path of investing.

1) The Power of Growth, Dividends, and Compounding

Early investing is logical to most people in terms of compounding interest.

The longer you have for your investments to work, the better you’ll do with investment growth, dividend reinvestments, stock splits, and the overall possibilities for value appreciation.

For example, if a company’s stock pays a quarterly dividend, it’s possible to get significant return on your capital simply paid back to you as company profits.

The longer you own that stock, the more dividends you will receive over the years.

2) You Have a Lifetime of Earnings Ahead of You

As a young working professional, small business owner, or entrepreneur, you have another great benefit to investing early.

You have your entire working lifetime’s earnings to invest. Even with graduate or professional school, most young professionals start their career earnings in their mid-20’s and have a possible forty-year working lifetime of earnings to put aside.

Not only does this amass greater wealth, but it also means that those investments earmarked for retirement won’t be drawn down for living expenses for a long time.

As you get closer to retirement, not only will your contributions stop, but it’s possible that the inevitable withdrawals will begin.

Early and mid-career earners don’t have these concerns resulting in the possibility of accumulating substantial assets.

3) You Can Recover from Mistakes or Down Markets

An often overlooked benefit of starting your investment plan early is that you can actually take more risk, and with time recover from any setbacks or extended bear markets.

There are countless examples of investors withstanding serious downturns only to come back stronger because they had more time to wait.

During the height of the recession, many investors who started investing late and were hoping the market would provide a tailwind are now resigned to the fact that they will work longer and retire later.

Your investments should eventually provide freedom, choices, and possibilities.

Why work until age 75 to maintain your lifestyle, when an earlier start might give you an option to retire early — or on your terms — enjoying life, travel, family, and more?

4) Your Investing Education and Experience is Maximized

The sooner you start investing, the earlier your financial education, investment literacy, and market experience begins. As many delay investing, they also delay exposure to the stock market and its concepts, terminology, cycles, and more.

Seasoned investors often make wiser choices long-term simply based on their own personal experiences.

Any budget, no matter how tight, can likely afford some planned savings and long-term investments.

And in future when you think back to the present, you might feel a serious debt of gratitude for the planning you did for yourself, your family, and your future.

You can change so much by starting now, so don’t wait any further!

 

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How Young Do You Think It’s Suitable to Start Investing?

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