The fundamentals of Investment

This is an adage most of us have grown up listening to. Success in all aspects of life, including investments, is usually attributed to the early starters.

• Riskier or volatile investments usually offer the higher returns. Starting early allows investors to take more risks and have an opportunity to earn better returns since they can recover from wrong decisions without affecting the long-term financial goals.
• Compounding or interest earned on interest is a powerful tool for investors. If you start early, then you give your money enough time to generate wealth. Even a small amount saved every month, when you are young, can snowball into a large sum by the time you retire.
• Investing early helps you build a healthy spending-saving balance. Since you have a financial commitment to your investments, you will have lesser disposable income on hand and will not make unnecessary expenses.
• Having the security of a saved up fund will help you during emergencies. Marriage, children’s education and retirement are few of the big-ticket expenses that most people try to prepare themselves for and starting early will help you to have the funds when you need them. It will also keep you away from impulsive financial decisions.