Investing for retirement and well-being in the future is something that all workers need to be thinking about. While a lot of people put the conversation and planning off for later, the benefits of starting planning and saving for retirement at an early age are greatly beneficial. Following are some of the ways that investing at a young age can benefit those entering the workforce today.
Compounding interest – by investing at an early age, compounding interest allows the money that is invested to grow larger by the time an investor reaches retirement age. The numbers are staggering when looking at an investor that starts at the age of 20 versus the age of 30. When a person gets older than that, potential retirement savings can drop significantly. Investment guru Chris Linkas stresses the importance of investing at a young age for the investor to put compound interest to work for them.
Taking a risk – investing at a young age allows the investor an opportunity to put their money in riskier markets to gain a higher potential return on their dollars. At an older age, investors are less likely to put their money at risk and stay very conservative which doesn’t give their funds the chance to grow exponentially. Chris Linkas also lists the opportunity to learn markets and trends at a young age can pay off over a career of investing.
Becoming smarter with Monday – investing early allows people to start thinking about their financial well-being at an earlier age (https://www.discogs.com/artist/2617983-Chris-Linkas). Investing helps people develop better spending habits in helping them realize that saving money is actually earning money in their bank accounts.
Gaining a leg up – investing at an early age allows investors to be in a comfortable place as they near retirement. They won’t be scrambling to take risks at an older age to secure their financial future when retiring. Chris Linkas highlights that by starting investing early, a person can secure their financial future and be in a happy place at retirement. Nobody works their entire career to be stressed out about finances when they hit their golden year.