A lot of people interested in the idea of investing can find themselves putting it off because they are daunted by the process or simply don’t know when or how to get started. Considered by many to be a great way of building up an alternative pension, some also think it’s something they don’t need to sort out yet, with plenty of time to get to it later down the line. The fact of the matter, however, is that in the majority of cases, the earlier you get started the better, and there are a number of reasons as to why.
Getting ahead of the game
When you’re young, you’re a lot less likely to already be burdened with existing debts, and this is an important factor when it comes to investing. You should only ever be using surplus, disposable income on investments so that you ensure you always have enough kept back to meet your day-to-day living costs and prior monetary commitments. If you get started before you have many of said commitments, the profits you make can essentially act like an extra income, perhaps even sparing you from future debts in the first place.
Time is on your side
If you start younger, you have the benefit of being able to play the long game, dipping your toe into the waters of investment so to speak. This gives you the chance to learn how the various markets work and what assets are best suited to you and your budget, gradually building up a portfolio that you know inside-out and trust implicitly. Also, the earlier you invest in slow-burn, long-term opportunities (with vintage cars and antiques being famous examples), the higher percentage return you stand to accrue, as these assets mature in value as the years go by, with little to no effort required on your part; just sit back and watch your money grow!
Generally speaking, we tend to be bigger risk takers when we’re young, and this trait naturally lends itself to investing, which by its very nature always includes at least some degree of risk-taking. It makes sense to capitalise on this by moving your money around and trying out different investments while you feel willing and able (and theoretically have time to learn from any mistakes and earn back losses), so that you can slow down with age, reducing your level or risk-taking and thus enjoying a more relaxed retirement; a healthy nest egg hopefully already well established by that point.