One of the best things you can do for your financial future is to start investing. Unfortunately, too many people put off investing. It’s easy to come up with excuses. You might think you don’t have enough money. Or maybe you want to accomplish other money goals before you get started.
However, the reality is that you are losing precious time when you put off investing. If you plan to reach your goals for long-term wealth, it’s important to start investing ASAP. Here are some of the reasons it makes sense to begin investing as early as possible:
The earlier you start investing, the longer your money has to grow. Investing allows you to put your money to work. The longer it’s earning interest, the more you have in the long run. Start investing early, and you don’t need to side aside as much money each month to reach your long-term goals.
Consider: waiting 10 years to start investing can make the difference between needing to set aside $300 a month and $800 a month. Compound interest works on your behalf, and the longer it’s there to do its job, the easier it will be to save for retirement and other goals.
We all make mistakes. There’s a good chance that, at some point, you will choose the wrong stock or face some other investing setback. When you start investing early on, you have time to make mistakes and recover from them.
There are tools that can help you find good stocks for your portfolio, but not everything is fool-proof. No one can predict the future, and there is no telling when a market or economic event will cause a loss.
Likewise, even if you are indexing, you can still run into rough patches in the market. When your portfolio drops, you can afford to wait for it to recover when you start early. The longer your money is in the market, the greater the chance you have to accumulate gains over time.
Whether you make mistakes with the stocks you choose, or whether a market event leads to a temporary setback, starting early gives you a better chance of recovery, on top of long-term gains.
Believe it or not, you have enough money to start investing. And that’s reason enough to get started, especially since you have time on your side. One of the biggest investing myths is that you need a lot of money to start investing. In reality, there are plenty of online brokers that will allow you to open an account with no minimum. If you can afford to buy one share of a stock or a fund, you can start investing. It’s even possible to set up an automatic account and set aside a small amount of money each week or month until you have enough to buy a share.
Research your choices. From brokers with $4.95 trades to those that will allow you to invest pocket change, there are plenty of options available for any budget. And, if you can afford it, it makes sense to get started.
No, you probably won’t be able to retire if you only set aside a small amount. However, you can get a head start when you begin early. It’s vital, however, to increase the amount you set aside on a regular basis if you want to meet your goals. As your income increases and your financial situation improves, make sure you boost the amount you set aside for long-term investing.
Thanks to the internet, it’s possible to open an investing account in a matter of minutes. Choose an account with no account fees and no minimums, and you can begin investing almost immediately. All you need is basic personal information, and a way to connect your bank account so you can fund your investment account.
If you want to move closer to your long-term wealth goals, it makes sense to start investing as early as possible. You have more time to put your money to work for you, and you have a better chance of recovering from your own mistakes, as well as market events.