Investing Retirement

There Is No Better Time To Start Investing Than In Your Twenties. Here Are Five Reasons Why

For many young adults, it seems easier to put off any investing decisions until their financial situation becomes, at least theoretically, more stable. Twenty-somethings, however, are actually in a prime position to enter the investing world, even with college debt and low salaries. Dive right in to learn why.

“Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it.”

Albert Einstein

Searching for means to fatten up your pot of savings? Are you having doubts about investing your savings in the stock market? Perhaps investing requires you to go through a steep learning curve, and you do not have the time to make that journey, or perhaps the idea of putting your money in an index fund and not seeing significant returns for a couple of years does not sit well with you.

Whatever the case is, you may want to think again. Yes, there are lots of risks involved when it comes to investing your money, and the return of investment may be less than satisfactory, but when you zoom out and look at the big picture, investing is a sure way to expand your financial portfolio.

1. Towards A Financially Stable Retirement.

If you have graduated without any student debt dragging you down, consider yourself fortunate. There are many graduates out there who have thousands of dollars to repay in student loans. When you have student debt to deal with, retirement is the least important topic in your mind. Although you have more than forty years before you can free yourself from the dreaded world of employment, planning ahead is not harmful in any way. Investing in stocks is one reasonable way for your money to make more money and saving towards the future.

2. You Have The Advantage of Recovery Time.

Let’s be real; investing in stocks and particularly cryptocurrencies is similar to playing a game of Russian roulette. You are placing your money into a business with the hope that as the business heads for the moon, the stock will follow the same trajectory. However, there is always the potential for a loss, which is often what deters most people from investing in the first place.

The best thing about being a twentysomething is that you have ample of time on your side. So, if your investments have taken a heavy beating, you and your assets have plenty of time to recover from it. Always remember that time is your best friend when it comes to investing.

3. It Is Not Rocket Science To Begin With.

If you have ever watched a news report or analyse a chart on stock market trends, your eyes likely crossed several times (unless you have a degree in economics or finance, then studying the charts is a no brainer). However, the Internet holds vast resources that you can look upon if you ever need to find all sorts of info related to investing.

Whether you decide to discuss with an investment analyst, take the time to read books that focuses on how to become a wiser investor or experiment with a virtual portfolio account on eToro. Taking such measures allows you to learn and understand the fundamentals of investing in no time at all.

4. You Do Not Actually Have To Put All Your Eggs Into The Basket.

You do not necessarily have to go all in to see a significant return. So, if you are concerned that you have to invest thousands of dollars on a monthly basis, drop that worry. Look at it this way: if you invested a dollar per day for the next forty years and assuming that the annual rate of return is 3%, you can be sure that you do not have to worry about money by the end of the period. While it would not be sufficient to live on retirement, it will make a fantastic financial addition to your financial portfolio.

Final 2¢: Invest Now, Relax Later

Although you are just getting started with your life and retirement is the last item on your wishlist, saving now for the future means you get to relax in the future. Learning how to invest in the stock should be a skill all twenty-year-olds should be striving for as part of improving one’s overall financial literacy. As with most things, when you start young, you are setting yourself up for a financially solid future.

Never underestimate the exponential power of compound interest. With time and small investments, you could end up with a bigger-than-expected pot of money sitting in your retirement account, which then allows you to enjoy a decent quality of life once you make the move to retire.

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