Life is too short to wait because it is the early bird who catches the worm. If you start something early you have a better chance of succeeding. If you are late, you will lose. The secret formula for success is rising early, working hard & striking the bull’s eye strategically. There is no reason why you should delay investing, except, of course, if do not have any money to invest.
The simple thumb rule for investing is, the earlier you start, the greater are the chances of achieving your financial goals although it’s never too late to start.
So what should be the appropriate age to start investing? Well, the best age to start investing is in your 20s just after you start earning. Who wouldn’t love to retire at the 40s? However, if you are in your 30s, 40s or even 50s than you should not worry about starting your SIPs because irrespective of your age you can start investing today! It should be noted that there is no minimum or maximum age to start investing, so even kids can open a mutual fund account.
Albert Einstein famously stated: “Compound interest is the eighth wonder of the world. He, who understands it, earns it… he who doesn’t… pays it.”
The momentous advantage of investing early is compounding. Succinctly explaining, an investment along with returns on it reinvested together to deliver more over a longer period than what a simple interest would do. Apart from compounding, early investing inculcates a disciplined approach and helps to achieve near and long-term goals.
Now you must be wondering how and where to invest?
You may be sitting on a pile of cash or your money must be kept idle in a bank account. You must be pretty unsure over how to put your money appropriately.
You should start with Planning. Planning includes identifying your challenges and Future Goals. Once you have identified challenges and goals, you can prioritize them and finally create a proper plan that can help you achieve your goals and fight off your challenges and fears. The goal-based approach of investing is all about achieving specific financial goals at different stages of your life by allocating money to different asset classes, based on your risk appetite and time horizon. So that there is no over-exposure or under-exposure to any specific asset class and your portfolio is diversified.
Like, if you have Loans to pay off than do not buy costly appliances. You should rather pay off your existing old loans. If you haven’t created an Emergency Fund yet, create one. Creating Emergency Fund will give you peace of mind and will protect you against any exigencies in the future. If you have already created an emergency fund then you should invest your money and allow it to appreciate. You should not keep money idle in Savings Account because it won’t help you counter the Inflation Bug and therefore your money has to be deployed in productive avenues as early as possible so that it multiplies and wins over inflation.
A Financial Investment comes up with a promise of a bright future. The amount which you will invest today will get you closer to financial success. So, opt for a wealthier state of mind today and start investing in Mutual Funds via SIPs.
Financial Planners and Gurus have always insisted on investing early to get higher returns and that it should be done in a timely manner so that it gets more time to appreciate. This will also ensure building a financial corpus which could be used in multiple ways like a Retirement fund or Fund for Daughter’s marriage etc. So, it will be good to start early for the majority of the folks but for few who have low income and higher spending power, it would appropriate start investing in later stages of life. Lastly, considering the rising health care costs and inflation apart from just starting early you should diversify your portfolio and allocate some money to equity investments because this will ensure proper growth of your money & will ensure a comfortable retirement.