Investing in your 20's and its benefits
The 20s are some of the best years of anyone's life. These are the years with few financial responsibilities, maybe the first job, and lots of adventures. Most young people don't start thinking of investing during this age and yet these are also the best years for one to start investing. There are plenty of benefits as to why someone should start investing this early and we will highlight them here.
BENEFITS.
· You can start small.
When investing in your 20s you have time on your side. This could be years of investing. A young person can invest a little amount of their salary and watch it grow over the years. At 25 years you can invest half of what you'll invest say in your 40s in order to achieve the same goal once you retire. This makes it less strenuous and stressful as your monthly contributions will be very comfortable to make.
· You have high risk-taking ability.
In your 20s you have many years of investing ahead of you and time is luckily on your side. Because you have fewer financial responsibilities unlike say a 45-year-old you can take more risks when investing and not be too scared to suffer losses because you can always recover and the impact won't be so bad. The higher the risk the higher the reward.
· Improves your skills.
As is with any trade, all the time put into it gets you to acquire valuable skills. Once you start to invest early your investing skills improve over the months and years that you keep at it. If you start investing in your 20s you will have many years of experience by the time you are 40 than if you start to invest at that 40. This will improve your success rate and your ability to actually achieve your goals.
· Get to your retirement or early retirement.
In order to enjoy your old age and not be a burden to society you need to save and plan for that old age. If you start to invest in your 20s for your retirement the goal will be much easier to achieve and you might even end up getting an early retirement. The amount you start to save in your 20s will be much lower than the amount you save in your 40s. In order to achieve the same goal you could have to double or even triple your monthly contributions in your 40s to achieve the same goal as in your 20s.
· Improves your spending habit.
After getting their first job, most people are not keen on investing and therefore tend to waste any extra cash they are left with after paying their bills. This will lead to you being wasteful and a spendthrift. Once you start investing you get to understand that any little extra cash can be invested and compound interest which is very helpful.
· The impact of compounding.
This is perhaps the greatest benefit of investing in your 20s. Compounding is when you invest your money and the interest earned from that money is reinvested thereby earning you more money. If investments are done early, the interest gotten from it will keep you earning and that investment will never dry out. If you invest in your 20s the amount will be significantly lower and earn you a good interest rather than waiting til your 30s or 40s where you'll have to maybe triple your initial investments to get the same amount of interest.
· Tech advantages.
In your 20s, you have the advantage of knowing all the technology trends that are modern and up to date with the times. Technology will help you learn and monitor the best trends of the time which will boost your investment chances. Being tech-savvy and understanding how they help with your investments will improve your strategies and help you make the best investments.
As is with any age, investing should be done with thorough research and calculated risks. This will improve your chances of enjoying and benefiting from the said investments. Stating easily is the best way to go and build wealth and secure your future. Good luck!
Kim Maina
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