Ask any wealth advisor when you should start investing and they will say: yesterday! Investing is a great way to grow your wealth – and it is not only for the wealthy. In the past, investing may have been reserved for the rich, but that barrier to entry is now gone. Companies and services have made investment opportunities available for everyone. start investing
Compound Interest
People love to reminisce about how cheap gas prices were back in the day. Most of us have heard tales of taking a dollar to the movies and coming home with change. These anecdotes highlight how inflation diminishes the value of money over time.
Investing wisely means that you can better combat inflation so that you are able to afford your current lifestyle in the future. It makes your money work for you because of compounding. Compound earnings or compound interest simply means that any returns you gain are reinvested to earn additional returns. This is why the earlier you start investing, the more benefit you gain from compound interest or compound earnings.
It’s Never Been Easier To Invest
Investing early makes a huge difference to the amount you have, especially if you leave your money invested for a long period. Your portfolio’s value adds up over time – more so if you reinvest your profits and dividends. Your money therefore has the chance to grow exponentially. Starting with a relatively small amount at a young age will create a good investment habit and you will reap the rewards later on. Not only will your retirement be more comfortable, but reaching goals such as buying your first car or home will be more attainable.
You Can Take Control Of Your Future
What is the best way to start investing? Starting to invest money at a young age means that your money has a long time in which to grow. Younger investors are also able to consider investing in stocks that would seem too risky for older investors. Money you invest will show faster growth over longer periods than money you hold in the bank. Although money in a bank account is not subject to the same volatility as other investments are, it is highly unlikely that it will keep up with inflation, thereby eroding the purchasing power of your money.
This is an interesting period for many types of investments, as the financial markets and the economy recover gradually. “So, what should I invest in right now? How should I invest my money?” you may be asking.
Start investing in stocks. It has become far more accessible on your own or with a wealth advisor.
Stocks can provide growth to an investment portfolio. It is an asset class that carries a high degree of price volatility, so beginner investors must consider the degree of risk. A general rule of thumb is the greater the potential risk, the greater the potential reward.
Investors must realise that nothing is guaranteed, and they must be willing to run the risk of losing their money. Historically though, stocks have proven to be a reliable asset class for good average returns over time.
If you are ready to start investing in your future, do some research to understand the potential risks of assets you buy. Better yet, consult an investment advisor who will give you the best advice based on your unique situation. A wealth advisor will be able to guide you as to where to invest right now so that your portfolio can grow over time to ensure the future you have always dreamed of.
Our team of investment planning advisors service clients like you across seven Canadian provinces, providing support along the way. Let us work with you to create a path for the future you desire. Get in touch with NPW today before you make any decisions. Let us help you choose the best options about how to start investing.
