Why wait to save money or invest when you old, it’s about time you stop sitting on your dreams and start making them happen. Learn to take risks in order to get ahead and reach your goals. It is never too early to start investing, only too late. I’m pretty sure all of us would not like to work all of our lives and never retire. So in order for you to retire one day you need to start investing for that retirement now. However, there are many unfortunate things that can happen in the later years of your life that may not allow you to work forever (i.e. sickness) so investing early will help avoid financial problems that come up.
By starting out with as little as R25 a month, and increasing the amount to greater levels over your lifetime and through the course of your career, you can ensure you come out ahead in the long run. There are many advantages of saving money and investing while you are young.
Reasons to invest and save money while you’re young are:
Slow and Steady Wins the Race- Those who start investing at an earlier age have an easier time reaching their financial goals than those who put off the task. If you are 25 years old and want to retire at the age of 65 you will have to invest less money monthly (although for a longer period of time) than if you are 55 and having to play financial catch up.
Understand money management – Before you can jump into the world of investments you must first have a firm grasp on how to manage your money from day-to-day. Investments should not be looked at as a get-rich-quick plan, rather a long term strategy to grow your money. For this reason you have to be able to spend, save and survive each day of your life. So you need to first practice good money management skills.
Learn about investing – learn as much as possible from reliable sources. Just as your money can work for you, you could also make unwise decisions which could cost you big time in the long run. While it may be tempting to make risky investments it is important to understand exactly how much risk you are willing to take. Find a mentor or ask your parents or other trustworthy adults for advice before you step out on your own.
Invest what you can afford – Avoid early withdrawal penalties or losing growth opportunities by investing only what you can afford. Investments should be considered for the long run, not a place to put your cash for a few months until you need it- that is why you keep cash in short term savings vehicles. If you are putting too much money in investments and don’t have enough to survive each day, consider re-examining your budget to get the most for your money.
Accomplishment- have goals as they will motivate you to achieve the next level in your career, and personal or financial life, they are an excellent motivator and can help. If you make it your goal to be a property owner by 32 and start investing even small amounts at the age of 22, you will amass enough money to fund the down payment of your house and provide yourself with a true sense of accomplishment.
Save Money on Top of the Money you have already saved- Budgeting and living within your means is an essential way to help improve the quality of life as positive behaviours with spending and thrift are often rewarded by increased credit scores. With a higher credit score you will be entitled to the lowest interest rates when you need to finance the purchase of a large ticket item like a car or a home. By investing now, you will be learning those skills that will pay off later.
Expect the Unexpected- The only thing that is predictable about life is that it is unpredictable. By taking the steps now to invest, when the worse does happen (and it will) you will be prepared.
When you are vivacious and young, it is nearly impossible to consider that you will want to slow down one day, but it will happen. By investing when you are young, you will be able to help build your reserves that you will need to live on later. There for if you are in your twenties or even late teens, heed this advice and begin saving and investing as soon as possible.
