You might have heard people saying that one should start investing early in life to maximize your returns. A common question that usually arises here is, what is the best time to start with your investment journey?
Amongst people of all different ages, it is usually the young adults in their 20s who may feel unsure about the need for financial planning. While the 20s are the time when most of us have a carefree lifestyle and an apparent lack of responsibilities, it is also the right time for you to investment planning. If you are in your 20s, here’s how you can set yourself up for the future.
If you are ready to pave the foundation of the lifestyle you wish for, now is the right time to start investing. Here are a few crucial pointers you should keep in mind:
1. Invest Early to Utilize the Power of Compounding
When people are in their 20’s, they think they have much time to plan for their financial life, believing they would live for the next fifty-sixty years at least. They feel it would make no difference if they start putting off some money and invest it in the right way. Waiting for the right time; however, it can make a massive difference in the investment returns one would get.
Consider this example –
You start investing a few thousand rupees per month at the age of 24 and continue until you are at the age of 60. If you manage to get a five or six percent return during that period, you will have a few crore rupees waiting to welcome you in the retirement age. Now, let’s say you wait till you become 30 to start investing. By the age of 60, you will receive only half the returns as compared to the other choice. The first ten years of your investment can make wonders happen in your life with the power of compounding.
It is no wonder why the great Albert Einstein remarked about compound interest as the eighth wonder of the world.
2. Think of Investing as a Part of Bigger Goals in Life
People are not wrong when they think that investing is not the answer to all their problems. However, investing early does help in beginning the wealth creation journey. One of the best ways to look at investment planning is to associate it with broader financial plans in life. You are advised to consider diverse aspects of your life while starting to invest your money in different assets.
For instance – after you get married and have children, you will need more money to cater to the related expenses. You will have to think about your children’s future, your retirement, and much else. If you are not financially secure in any phase of life, you will be most likely to regret not investing in the earlier time. To be at the safe side, you can invest in Max Life Savings Advantage Plan to achieve both the short-term and long-term goals in life.
So, it would help if you start to think about bigger goals in life and plan investing your money accordingly. At this age, you need not worry about the next rising stock, but focus on building fundamental investing habits to meet the basic investment objectives at least.
3. Consider Smart Investing a Resource for a Good Life
Most of the people in their 20’s think of investment plans as just a solution to their problems. However, they are much more than that. Smart investments are resources you can use to create the life of your dreams. Keep in mind that your choices of spending, saving, and investing your money matters a lot.
So, learn to become a careful money-saver and a smart investor. Start investing early in some of the best investment plans to save tax while also creating wealth to do more of the things that you want in life.
Investing works best when you start doing it early in life. There is an upper limit to everyone’s income. It is how you manage to save money and invest it smartly that will let your money grow well, thus giving you a better future to live and enjoy.