Many people put off investing because it seems too daunting or complex. However, there are some valuable benefits to getting into the market while you’re young.
It’s true – the investment market can be intimidating. Maybe you don’t know where to start or are afraid of losing money. The good news is that you can start investing now. There are options that are simple, with manageable risk and you can build up gradually, taking advantage of the time value of money.
Starting an investment portfolio early has some key benefits:
The power of growth investments
The earlier you invest, the more time your investment has the chance to grow. This is the idea behind growth investments, such as shares, property and alternative investments like private equity or commodities. They may generally be higher risk over the short term but their aim is to give you better capital growth (and maybe dividends) over the long-term.
Holding out through market fluctuations
The Australian Securities Exchange’s S&P/ASX 20011 Index has grown from around 5,500 points to around 8,500 points in the last 10 years. Starting to invest early gives your investments more time to ride out market fluctuations, allowing you to benefit from long-term upward trends in the market.
Less money pressure
Investing small amounts consistently over time can be more manageable than trying to invest large sums later in life to catch up. When you’re younger, you might be able to take on more risk, potentially leading to higher returns. Over time, you can adjust your portfolio to be more diversified as you take on more responsibilities, such as having children or getting a mortgage.
Improved financial discipline and time to learn
Developing good financial habits early on, like budgeting and regular investing, sets the foundation for lifelong financial health. Starting early gives you time to learn about different investment strategies, market behaviours, and how to manage risk effectively.
Starting to invest early can maximise your wealth-building potential. I can help you set financial goals and make informed decisions about investing early. Remember, protecting your wealth is just as important as growing it. I can also help you put financial securities, such as income protection and life insurance, in place so both your present and future are set up for success.
For more information about your investing options, book a time to chat, and we’ll discuss what is best for you.
Reference:
1 https://www.spglobal.com/spdji/en/indices/equity/sp-asx-200/#overview
Any advice is general in nature only and has been prepared without considering your needs, objectives or financial situation. Before acting on it, consider its appropriateness for you, taking into account those factors. Before making any decision about whether to acquire a financial product, you should obtain the Product Disclosure Statement.
