First question that clicks to our mind about investment is “when to start our investment?”. It is being often advised by our elders to save money today to use it in future to meet up any financial crisis. But most of us fail to do so. However, expert says that the minimum age we should start investing is approximately 20-23 years when most of us start our career life. We all generally consider 60 years of age as our retirement age and if we start investing at the age of 20 years, we get an enormous time period to enhance our wealth.
Let us discuss about some of the important motives of investing early.
Organizing our Desire: When we earn we become independent and we have no bound to spend on branded cloths, gadgets, and other things. But this to keep in mind that whatever amount we are earning as our salary per month is a standalone figure within which we have to manage all of our expenditures including expenditures for daily needs, for medication, for family etc. alongwith the expenditures for our luxurious items. At the end of the day, we often loose control on our expenditures and we run into deficits. However, if we Control Our Desire.
Let’s assume that you start your job with monthly salary of Rs 50000/-. You are independent now and this is not bad thing to spend money on branded clothes and other things. But just think this, there are more expensive brands available, more gadgets available, you can through parties every night and you can travel with luxury packages. You cannot buy everything. If you are buying an expensive watch, than there is another much expensive watch also there. With Rs 50000 per month you cannot spend Rs 60000 per month. But if you invest Rs 20000 per month than in some time you can spend additional amount with the interest Income.
Compounding Effect: Mr A and Mr B of same age started their career in 25 year age. Mr A started to save Rs 1 lakh every year for his retirement and save it up to 35 year age. Mr B started Rs 1 lakh saving at 35 year age and saved it for up to 60 year age. Let us assure that they got 10 percent return on their investment every year. At the end of 60 year Mr A will have Rs 1.92 crore in return of his 10 lakh investment whereas Mr B will have Rs 1.10 crore in return of his Rs 25 lakh investment. This is the effect of compounding. As early you will start you will get most Benefit.
Money Management: When you start investing early, you will be able to manage your income and expenses perfectly. It is saying that if you spend money on the things you don’t need today you will have to sell the things you need tomorrow. Investing in early life will teach about.
Improvement in Risk taking ability: When you start investment in your early age, you will come to know about the various price and interest movements. You can take decision according to situation based on your previous experience with market.
Secured Future: As you seen above, saving for only 10 years of early life will give you a big amount at your retirement age. Even you can use this amount in case of need during difficult Times.
DISCLAIMER: Views mentioned in this article are based upon personal experience of author. Please consult your financial advisor before any investments & decisions.