5 Smart Reasons To Start Investing When You’re Young – 2020 Guide

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Most people, including myself, and I assume you too have dreamt of becoming rich, especially when young. There are so many things we would like to own but are simply too expensive. Sports cars, big houses, luxurious clothing, expensive furniture, and many more things. Unfortunately, finding a job that can support this kind of living is very difficult. Especially if you do not have a college degree or other diplomas that might show your experience and education. That is why it is best that you start investing your money as best as you can while you are still young.

You probably have heard thousands of different stories about people who have invested their money and have made millions or even billions. Sometimes, it can be just pure luck, and sometimes it can be on purpose.

Keep in mind, making an investment does not necessarily mean that you are going to get rich. But, it could mean that you could make some serious money that could help you in your future. Turning $1000 into $10,000 is still a lot of money that could help you buy a vehicle or a home.

I understand that the fact that there is a big risk when investing money anywhere and it can be scary for some. It is especially understandable during this coronavirus pandemic. But, every endeavor in your life will require a little bit of risk, I do not think that this kind of move will change your life by a whole lot.

If you cannot seem to make a decision and make the move, here are some smart reasons why you should consider making investments while you are still young.

1. Low-cost lifestyle

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For most young adults, life is pretty inexpensive. This means that the money coming from your paycheck can be put on the side most of the time. If you start saving, you will realize just exactly how much money you can make in a short period of time if you live a more frugal life. You could even make more money if you invested in the right place.

This is why it is so important to take this path while you are still young. When you are still leading a low-cost lifestyle. Otherwise, in a few years, you might find yourself a wife or husband and you might even make some children. Children are very expensive and can cost hundreds of thousands of dollars every year. During that period of your life, it can be very difficult to put some cash on the side. Obviously, that depends on what kind of paychecks you are getting.

Of course, I also acknowledge the fact that there are some cases in which young adults have certain debts to deal with. Those with debts will not have the freedom of making investments.

2. Time is your friend

Time is one of those things that we cannot get back and we cannot buy. Once it passes, there is no taking it back. This is why it is vital that you utilize time in your life as best as possible. If you miss your opportunities today, you will not be able to get those same opportunities tomorrow. Your opportunities and your chances are lower as time passes. As the years go by, is much more difficult to find the right opportunity.

Time is also important because it has a huge influence on investments. For example, if you put your money into a certain property, the property’s value could rise in the next few years or even in the next decade. The difference in value can be anywhere between hundreds of dollars and tens of thousands of dollars.

So, the more time your money is invested into stocks, properties or whatever else it is, the larger the profits. This is why loved.com recommends making custodial accounts for your children. Or, talking to your parents and convince them to make you a custodial account. The sooner the better.

3. Compound interest

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In my previous point, I talked about how you can utilize time to make even more money. Of course, I was talking about compound interest. The earlier you make your move, the bigger the return over time. Even if you start slow, making $100 investments a month in some mutual fund, in a few years, the monthly profit that you were getting from the 5-10% return could even be larger than your paycheck.

That is the power of compound interest. It is essential that you start understanding how it works and why you should care.

4. No regrets

Life is full of decisions that we make and do not make. And when we do not make those decisions on time, we regret it. Whether it is failing to ask a boy or girl out, making the wrong order at a restaurant, using the wrong words during a conversation with your boss, or whatever else it is, you will regret it. Of course, different people handle guilds in a different way. Some just simply do not care while others care a lot.

However, if you want to avoid regrets entirely, it is best that you make your investment now instead of later. The sooner you start, the more money you be able to make. If you start too late, you will regret making that decision.

5. You could retire early

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As I said previously, making an investment does not necessarily mean that you will become rich out of nowhere. But, the possibility is always there. The value of stocks can sometimes rise by a whole lot and so does the value of properties.

If something like that happens, something very positive, you might end up with enough money that could support your early retirement. Early retirement means that you can enjoy life properly without having to worry about cash or stress about your job. You finally have the free time to enjoy it with your close friends and family members.

I think that these five reasons are good enough to convince you to start investing while you are young.

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