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Why You Should Invest Early

Posted by Golden Haven on November 1, 2022
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You may have probably heard that investment is crucial because it has the power to grant one’s financial independence. This is the endgame being sought after by most people since they don’t have the energy to stay in the state of being an employee for the rest of their lives. Business owners, consequently, cannot ensure that they will always be at the top of the game and ace their competitors until their final moment in this world.

Somehow, when you reach that peak of maturity in life, you will come to realize that you have to make money work for you since you are limited by your human capacity to make the most out of your resources and earn cash. This is where investment comes into the picture.

The practice of investing, which comes in different phases, gives you an advantage over others who fail to see its worth. Considering all the technicalities, here are five reasons why you should strive to invest as early as possible.

1. Investing early gives you an extensive learning experience

In terms of investing, just like life in general, you cannot make absolute wins every day. There are times when you have to gain some and incur losses afterward. It is like a wild game with prizes and consequences–every step of the way, your chances of winning fluctuates.

Hence, by starting early, you can acquaint yourself with the entire market structure of different investment products and formulate sound anticipations on how much gain or losses should you expect in each of them.

If you refuse to invest early, you may not fully understand the stakes in each move that you will make. Chances are, your losses can be too huge for you to handle. As they say, experience is the best teacher. As long as you learn from your hardships, you can ensure that you can avoid committing grave mistakes over and over again as time passes by.

2. Investing early allows you to leverage on compounding

One of the most prominent terms in financial parlance is compounding. Commonly associated with interest, this pertains to the scenario when the interest that you gained from the principal amount also earns interest. As the cycle continues, the amount of return that you can gain on the initial investment that you have made gradually increases over time.

This explains the notion of time being of the essence when it comes to investing. If you compare two investors who made the same cash outlay for the same investment product with guaranteed return rates, you will see a huge disparity if one of them starts earlier than the other. This is because he would earn a larger interest income than the other person who decided to invest at a later time.

Having said this, given that there is an opportunity around you and you have the means to grab it, what better way to maximize such than by getting your hands on it instantly?

3. Investing early permits you to start with lower costs

You may have probably heard about the concept of inflation. This socioeconomic factor induces a rise in the price of market commodities. Consequently, this can affect your investment journey in the long run. If you opt to start a real estate investment, you will have to pay a higher price to afford a unit now compared to doing such a big purchase a few years back. Considering that there are more available financing options for this investment product than that for others, this can be a representation of opportunity cost; to avoid incurring a huge cash outlay today, you’ll save enough to spare yourself a margin that can serve as a fallback after expending for the same unit in a few years.

In the same way, you can enjoy lower premiums if you opt to avail of life insurance as young as you are. This can help you save up the supposed cost that you will incur if you will delay investing in such a portfolio and get your hands on it after some time.

The thing is, you can have a longer period to spare if you start early than to invest your money abruptly, which can leave you with no option but to make spot payments that can be burdensome.

4. Investing early grants you the privilege to retire earlier

If you choose to invest early, you can also reap the benefits of all the efforts you poured in at a faster rate. For those who are fortunate and passionate enough, they get to have a house and lot under their name and other personal properties like vehicles and the like in their early 40s. Also, at this point, they get to save enough cash that will serve as capital for their investment portfolios in the long run. This gives them the privilege of retiring early from their work and focusing more on their personal goals.

If you don’t get to make your money work for you, you will end up failing to save enough money to sustain your necessities when you get old. And in life, there is no such thing as a rewind button–once your body cannot be productive enough, you will not have any other choice but to retire. And at this point, you may find it difficult to reach stability and security.

5. Investing early indirectly improves your spending behaviors

By investing as early as possible, you may also observe a change in your mindset toward money. Know that you see the bigger picture, you may find yourself at a crossroads–choosing between affording what you want at this moment and paying for the security of your ideal life in the future. But with the right maturity, you will immediately choose the latter.

Most people call this “delayed gratification.” All you have to do is to sacrifice a little now and enjoy later in life. And from this shift in mindset, you get to grow wiser in spending your cash–you will unconsciously learn how to scrutinize the real worth of an item to you and assess the urgency of buying the same.

Investing early can be intimidating especially if you do not have a generous amount of financial resources. However, there are a variety of investment options suitable for your current socioeconomic conditions that you may choose from. The real deal here is whether you are ready to take on the challenge or not yet. If you wish for a better life ahead of you, act now and make each moment count.

Author

  • Golden Haven is a member of the Villar Group of Companies and a subsidiary of Golden MV Holdings, Inc. The company continues to develop the most beautiful memorial parks in the country and is now the largest chain of memorial parks in the Philippines.

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