Investing in your 20’s may sound incredibly dull; after all, you’ve waited so long to finally have money you control and the freedom to enjoy it. Besides, you still have the rest of your life ahead of you.
But, since you’re reading this, a part of you knows that you need to build a proper foundation for the lifestyle you want to live in the future – starting now is the best way to get ahead.
Over the next week, we will be sharing some pertinent actions you should be taking to enrich your future:
Invest Early – Harness The Power Of Compound Interest
Even though you have your whole life ahead of you, your 20s through to your 70s is the best time to get yourself together and lock down your financial life. Why wait a few more years – when you can start now. Afterall, time is money.
Financial advisor Mitchell Bloom of Bloom Financial, LLC shared this example with Forbes to illustrate what you stand to lose by waiting a few more years:
“Imagine you start to invest $300 per month when you’re 20 and don’t stop until you’re 60. If you earned an 8 per cent return during this period, you would have more than $1 million dollars in that account alone.
Now let’s say you wait until you’re 30 to get started. By the time you’re 60, you would only have $440,445 in your account. Those first ten years you missed out on would cost you more than $550,000 in returns – even though you only skipped $36,000 and ten years of deposits!”
Say hello to “Compound Interest”, a magical force once hailed by Albert Einstein as the eighth wonder of the world. This is the type of interest you accumulate when the interest you earn on your savings or investments begins to compound on itself.
However, the power of compound interest comes with time – time you’ll lose when you don’t start investing in your youth.