Very often, we procrastinate our decision to invest. This procrastination could be driven by the anxiety of financial dependency or waiting for the “right” time to invest. Investing at a young age is essential to attain financial independence. The step to invest at an early age helps one understand the real difference between investing and saving. Age should never be a barrier for you to invest and it’s rather the need to understand the relevance of investing. Starting early with even the minimal amount would give you a head-start and yield a considerable result in the future.
Investing at a young age gives an advantage as younger generation have higher risk appetite. Early investors can nurture the power of compounding and witness an exponential growth in investments. People can diversify their portfolio to mitigate the risks associated with extremely volatile investments. A detailed check list is prerequisite on spending & investments since your actions today are shaping your future.
It is crucial to understand that your decisions today would help you in the future on why it is important to invest early:-
• Enough recovery time
When you start investing at an early age you have enough time to recover from the losses, if any. Would you have enough time and risk appetite if you start investing at later ages?
• More Savings
When you start saving at an early age, you are actually developing the habit to save more and spend less. This is therefore shaping a better future for you since you have started understanding the relevance of sound financial health in future.
• Guarding your future
Investing in your early age helps you meet the contingencies, if any. It is simply planning for a bright future with focus on financial stability.
• Backbone to your retirement goals
What do you think is better: Start investing in your 20s for your retirement or in your 40s?
Investing during your early age helps you to live financially stable without any liability.
In the digital era, learning how to invest is like a cake walk. Your “Will Power” plays a significant role to start your investment.
There are abundant resources available to educate ourselves so that we can succeed in shaping brighter future. Technology has enabled us to acquire any skill with just a few clicks. It is our fear and anxiety which stops us to invest during our early years. With the first step on the ladder, you could soon achieve financial stability. With the appropriate investment decisions, one can reduce financial burden; be it huge medical bills, marriage, loans and what not.
Saving money is not sufficient but important to multiply your savings. The earlier you start the better is your future planning. Start now by investing in equity (direct or through SIP), and diversify your portfolio to hedge risks. Prepare yourself and guide your loved ones to take appropriate investments decisions for their future. It is important that we all guide each other to be future ready.
Even a small amount of investment is a step forward for your planning and would definitely exhibit huge returns during your retirement. With proper planning and timely investments, we can save a huge corpus by the time we retire and overcome any financial distress.
So, today is the right time to overcome procrastination and start investing.
The author, Saurav Basu, is Head – Wealth Management at Tata Capital. The views expressed are personal