How early investment can save your financial life?
Good financial health is important for your financial stability and security. In fact, it decides whether or not you get to retire early, buy a house, purchase your dream car, pay for your kid’s education, leave them a hefty inheritance, etc.
And, having a good Equifax credit score can help you achieve everything you have read above. However, it’s not easy to maintain a perfect range as you have to deal with so much financial stuff while earning and saving for present or future times.
What if we say, an early investment can save you from all the troubles of not achieving your financial dreams? Yes! Want to read more? Here’s an easy-to-understand breakdown for you:
Early investment – 4 signs you’re ready
The right timing is the key!
You should know when to invest and only then you can find where to invest. Suppose, you have a little money to spare but instead of investing it for the profit you add it to your emergency or savings account. Of course, the latter is also necessary, but early investment can help you in the long run which the savings or emergency account won’t. The reason is because they are just there. Unlike your investment, they can’t be of much profit.
So, how do you make sure you don’t miss the right timing? By knowing these signs that say “You’re ready for the investment!”:
1. You still have money after filing an emergency fund!
You first have to ensure that your emergency fund is all set so you can add money to your investment, emergency, and savings account as you make more money. Now, the account can have 3-month, 6-month, 12-month emergency funds depending on how much you can afford.
2. Your budget is set to save more every month!
One way to find whether or not you are ready for the investment is by evaluating your monthly budget.
- Calculate how much do you have at the month end compared to the paycheck?
- Your next evaluation should save you more than your last one.
Yes, even if it’s a $50 difference, it’s worth it.
3. You are thinking of an early retirement!
This sign is crucial because an early retirement demands right planning. And, when you start planning your finances, that’s when you know you need to start investing for your present and the future.
4. You know your financial goals!
Now, the last but the most important sign is how educated you are when it comes to achieving financial stability and money goals. You can’t be ready for an investment unless you know how much you need to make out of it. It can be short, medium, or long-term, but there should be something that you are sure of.
One thing to mention here is that the early investment doesn’t imply that you have to have a solid financial background to start making money. Instead, the key is to put upfront whatever you can, even 10 bucks. Well, enough with the signs, the point is why do you need to start early?
Why can’t you think of investment planning once you have reached your prime job era? Let’s read benefits of an early investment to answer all your questions:
Early investment – 4 benefits you can’t ignore
The purpose of investment is usually to increase your income so that you can save more. Now, the savings can be for anything ranging from housing, property market, retirement, education, etc.
So, the earlier you start, the more you save, and the better you plan!
1. Money makes money!
The biggest benefit has to be the money making. Yes, your investment profile is growing and you are building your wealth or property. But, the happiness and achievement you feel when you increase your money using your own money is unbeatable.
There’s no sketchy scheme involved, nothing scammy hidden, but pure bliss of your patience and hard work.
2. Higher chance to grow savings!
When you invest early, your money starts to increase right from the initial earning age, say 23. Although you are young, you have the spirit to take risks and chances to invest your money in stocks, housing, etc.
So, when you have more money, you can put more into your savings or retirement account. Which implies now you have a higher chance and potential to really let your account marinate. :p
3. Time to learn from mistakes!
Life isn’t a bed of roses. Yes, it does contain spikes and thorns but that’s what makes it beautiful and complete. Similarly, not all of your investments will lead you to the sky of increasing money. Instead, you might have to see some failures and struggles.
However, it can work in your favor when you start early as you are still young and earning so you can try again.
Related article: Risk-Proof Investment Planning!
4. You can think big!
Early investment gives you the time and funding to plan for something big. When you know, there’s a constant stream of income, you can think like a millionaire before becoming one.
Moreover, you can increase the return of investment by reinvesting the profit you earned. Now, saying again, all that is only possible when you have the time to start everything from scratch if things go south. So, yes, that’s why you need to start investing early!
That’s the only way you can save your financial life and save for your financial life. Didn’t understand it? Read that again! 🙂
Bottom line
When you are young, you have more energy to really act rationally. And, honestly, it’s fine as you still have the adrenaline to take risks and do something about your life. In short, you can afford to take risks when you are young.
The reason why it’s important to start your investment journey as early as possible. However, going all out in the industry without any homework isn’t what you should do! Then what?
Well, read the full guide to know the answers. You won’t regret it!
