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Investing, like many things in life, benefits from an early start. The earlier a person starts, the greater their potential return on investment.
Here’s five quick reasons why you should start investing from an early age!
Investors who enter the market at an early age are able to take on a greater level of risk. The phrase speculate to accumulate is important in understanding why taking on risks is key to achieving growth in your portfolio. Riskier assets, namely equities, historically perform with the highest amount of volatility but they also produce the highest longer-term levels of growth.
Investors who enter the market at a later age have less time to ride out periods of volatility and because of this needs to position themselves in a more cautious manner, which will ultimately offer lower potential growth.
Compound interest is growth earned on growth. By continuously reinvesting your investment earnings, you are exponentially increasing your return on investment. Investors who take advantage of compound interest, put themselves in an advantageous position. Below is an example of how compound interest works.
Sometimes life throws us incredible opportunities which require capital. This could be a business idea which requires investment or a bargain property. Opportunities pop up regularly in life and when you have capital on your side, you can take advantage of them and further grow your wealth.
‘Cause you’re free to do what you want to do’.
When you’re young and in the early part of your career, you may not be earning a particularly high salary. But, one advantage many younger people do have, is that they are free from financial responsibility. It’s quite common for young professionals to have no children, no mortgage and no car loan. The chances are, you will at some point have to fund all three of those things, so you should take advantage of the period where you are not financially tied down, by investing.
Improving your financial position can have many benefits on your quality of life. Firstly, financial worry is one of the main causes of stress related illness including anxiety and depression. By building a nest egg as early as possible, people can avoid falling victim to avoidable stress.
Secondly, improving your financial position will allow you to invest more into your health. Without health, your wealth is useless. By improving your financial position you can invest in; fitness activities, your diet and health care.
If you haven’t started investing yet, now is the time.
Don’t make investing more complicated than it needs to be, and don’t be afraid of taking action. Our highly qualified advisors are here to help guide you through every step of the way.
“I wish I saved less when I was younger” — said by no one in retirement.
Don't hesitate to learn all about our recipe for success in easy steps!